Novartis is “actively” managing its existing relationships with Chinese service providers to mitigate risks if the Biosecure Act passes.
CFO Harry Kirsch told media on Tuesday morning that Novartis currently has “a little bit of connections” to Chinese providers such as CROs, although he did not specify which ones.
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Harry Kirsch“All of this is very manageable and is already actively managed,” Kirsch said. “So, by the time this comes into effect, we will have no exposure from our planning. Very limited at the moment and that will be mitigated in a very reasonable timeframe.”
WuXi AppTec — a Chinese contract giant that’s become a critical partner to the global biopharma industry — is one of the companies named in the Biosecure Act, which would crack down on certain “biotechnology companies of concern” from doing business in the US. The bill could also expand to target other Chinese contractors.
A number of companies have flagged risks of delays, disruptions and increased costs if the bill becomes law. While the heightened tensions have reportedly led other companies like Eli Lilly, Vertex and BeiGene to seek alternatives — and smaller companies have told investors they’re exploring backups — Novartis’ comments represent some of the first public discussions by a major drugmaker about coping with Biosecure.
When asked whether that means changes to relationships with the service providers, Kirsch said Novartis will seek to “fully” align with any regulations and it won’t be a problem for the company.
“We will be changing over time and make good mitigation plans there, so that we are fully aligned with the to-come or already implemented US regulations,” he said.
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Giovanni CaforioSwiss-headquartered Novartis also reiterated its ambitions to become a major player in the US, jumping from top 10 to top 5. In its quarterly update, it announced that former Bristol Myers Squibb CEO Giovanni Caforio — who has extensive experience both internationally and in the US — will be put forward as the next chair of the board at Novartis’ AGM next year.
