Novartis Suspended Top Scientists Before FDA Disclosure

(Bloomberg) -- Novartis AG placed a pair of top scientists on administrative leave weeks before informing the U.S. Food and Drug Administration about problematic data concerning a drug the two men had helped develop, a person familiar with the matter said.

The drug, a cutting-edge gene therapy called Zolgensma, was being reviewed by the agency at the time and was eventually approved. Novartis told the FDA in June that it had discovered the potential manipulation of animal-testing data related to the medication, weeks after the $2.1 million-a-dose treatment had hit the U.S. market.

Novartis is under fire from U.S. lawmakers who say that the company should have told regulators about the data irregularities before the drug’s approval in May, rather than waiting to conclude an internal investigation. The FDA is continuing to assess the situation, and has said that civil or criminal penalties are possible.

Brian Kaspar, a founder of AveXis who had remained the business’s chief scientific officer after Novartis bought the company last year, hasn’t been involved in the unit’s operations since early May, the Swiss drugmaker said in a statement posted on its website on Wednesday. His role, along with that of his brother Allan Kaspar, who led research and development for AveXis, was taken over on Aug. 5 by Page Bouchard, a 10-year Novartis veteran, according to the statement.

Zolgensma is used to treat a rare and acutely debilitating disease known as spinal muscular atrophy in very young children. Despite the the animal-testing data issue, the FDA said the safety and effectiveness of Zolgensma isn’t in question, and the therapy remains on the market.

Novartis has said that it learned of the data manipulation on March 14 and alerted the FDA about a month after the drug gained U.S. approval. That timeline has created an outcry among doctors and ethicists and in Washington, where a recent focus on soaring drug costs has put the actions of pharmaceutical companies and regulators under intense scrutiny.

Last week, in the wake of the data-manipulation disclosure, Novartis Chief Executive Officer Vas Narasimhan said a small number of AveXis scientists were departing the company, though he didn’t identify any of them by name.

Renewed Fury

The episode has stirred up renewed fury over pharmaceutical-industry business practices and raised questions about the accelerated approval of genetic therapies by U.S. regulators. It has also returned questions about Novartis’s culture to the fore after the drugmaker had faced scrutiny last year over payments to Michael Cohen, the former lawyer for President Donald J. Trump.

Since taking the helm two years ago, Narasimhan has taken steps to raise standards and manage risk at Novartis and named a new ethics head.

Narasimhan has also sought to refashion Novartis as an agile maker of breakthrough drugs. The company unloaded its stake in a consumer-health joint venture with the U.K.’s GlaxoSmithKline Plc in March 2018 and then bought AveXis for $8.7 billion just weeks later. At the time, Narasimhan said that Novartis was building “a medicines company powered by data and digital.”

Brian Kaspar led the development of the gene-therapy program at Nationwide Children’s Hospital in Columbus, Ohio, where he ran a basic and translational neuroscience laboratory with a focus on neuromuscular disease. AveXis, then known as BioLife, licensed the program from Nationwide and The Ohio State University in 2013. Kaspar was the scientific founder, while co-founder John Carbona served as the chief executive officer.

Brian Kaspar didn’t immediately respond to an email seeking comment. Attempts to reach Allan Kaspar were unsuccessful.

Washington Backlash

Senate Finance Committee Chairman Chuck Grassley, a Republican from Iowa, has demanded records related to Novartis’s testing data, while Democratic presidential contenders Bernie Sanders and Elizabeth Warren have asked for an investigation.

Senator Dick Durbin, the Illinois Democrat, wrote a letter to FDA Commissioner Ned Sharpless last week asking that the agency explain why it decided to withdraw a rule that would have required clinical-trial sponsors to promptly report suspected data falsification to the FDA.

“This scandal smacks of the pharmaceutical industry’s privilege and greed, and Americans are sick of it,” Durbin wrote in the Aug. 9 letter.

Novartis shares were little changed Thursday morning in Zurich. The stock has gained 18% this year.

--With assistance from Anna Edney.

To contact the reporters on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net;John Lauerman in London at jlauerman@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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