The fast-track story of STI571

Robert Langreth and Howard Banks
Forbes Magazine

At a frenetic factory outside the village of Ringaskiddy, Ireland, workers have spent the past year laboring in 12-hour shifts around the clock, seven days a week, turning out 10 tons of a plainlooking white powder with extraordinary qualities.

The complex molecule is unusually difficult to synthesize. It started with 30 tons of raw materials and 500 tons of solvent. The process requires a dozen separate chemical steps and usually would take more than two years.

The factory has done it in half that time and is about to start the next huge batch.

There's good reason to rush: The white powder is an experimental drug called Glivec, and it may be the most potent weapon ever aimed at a common form of leukemia. Novartis is spending $100 million on this 10-ton rush job, yielding enough powder to treat 30,000 patients for a year.

Daniel Vasella, chairman and chief executive of Novartis, is credited for putting the considerable weight of the huge drug company behind Glivec. He took that gamble somewhat brashly, after seeing astonishing early results in only 31 patients. Glivec was given to patients who weren't helped by existing therapy or couldn't tolerate it; remarkably, the new drug worked in all of them.

With patients clamoring for the drug, he told managers to ignore costs and crank up production fast. Clinical trials executives met with factory managers to explain the task's urgency.

Taking a huge risk as additional trials ensued, Novartis boosted production a hundredfold, going from making merely kilograms to producing metric tons.

"If it didn't work, we'd have had to go back to square zero," says Andreas Rummelt, Novartis' manufacturing chief.

The typical drug takes five years or more of clinical testing to win regulatory approval. Novartis hopes to apply for approval in March, barely two and a half years after trials began. It would be one of the fastest tracks any drug has ever taken.

"The pace this has gone is nothing short of spectacular," says Oregon Health Sciences University oncologist Dr. Brian Druker, who led the first trial.

In current trials the drug is going to people with a less advanced form of the disease, too. It is testing the new drug against gastrointestinal stromal tumors, lung cancer and prostate cancer, as well. Novartis now has 3,500 patients trying Glivec. Some patients may be cured.

Such blazing speed is testimony to the big changes that Chairman and Chief Executive Daniel Vasella has put in place at Novartis. Born in Fribourg, Switzerland, Vasella had experience with medicine all too early. When he was 8, he had tuberculosis and spent a year convalescing in an Alpine sanatorium. When he was 13 his father died of complications from routine surgery. An older sister died of lymphoma, and his other sister died in a car crash. Vasella grew up to become a doctor, taking a hospital post in Bern, but by his mid-30s he was restless.

Vasella came to realize that he enjoyed his management responsibilities more than his medical duties. When Sandoz, the big Swiss pharmaceutical outfit, offered him a job as a technical salesperson, he grabbed it.

"I loved medicine, helping patients and working in a team. But I was also fascinated by business and wanted to try something new," he explains.

He joined Sandoz in 1987. Eight years later he was chief executive officer. A meteoric rise, even by U.S. standards.

Vasella helped create Novartis in the 1996, merging Sandoz with another huge Swiss company, Ciba-Geigy. He even suggested the new company's name; novae artis in Latin means "new skills."

Working quietly but urgently, Vasella has injected a distinctly American style of capitalism into Novartis. He expanded the bonus pool, created a stockoption plan and goaded Swiss unions into accepting performance-based incentives even for entry-level workers. Vasella also replaced complacent managers (15 of the top 21 posts turned over) and cut 12,500 jobs in two years, lifting the operating profit margin five points to 24 percent.

Today, Novartis has 10 other drugs in human trials involving cancers of the breast, colon, brain, ovaries and pancreas. In the next two years Novartis will unleash a flood of new drugs for an array of other deadly or debilitating illnesses—asthma, diabetes, schizophrenia, organ failure, arthritis, skin disorders and eye disease.

It's enough, Vasella vows, to produce double-digit growth in coming years. "We have 24 drugs in late stages of testing,” he says. “By all standards it is an extraordinarily high number."

Yet Vasella is still very much at home in the science of medicine. In 1999, the Wall Street Journal reported that Vasella spends evenings poring over research reports and meeting summaries, and he peppers his scientists with e-mails. He once caused the entire company network to crash because he copied too many people on a single file.

— Editor’s note: A much longer version of this story is available on Forbes’ Web site, http://www.forbes.com/ forbes/2001/0205/022.html