Novartis Accelerates Digital Transformation with Increased Investment in Digital Technologies and Innovation Ecosystem

Recently, VCBeat (WeChat Official Account: vcbeat) learned from foreign media reports that following Novartis’s announcement last month to lay off 2,200 employees, the company has been steadily increasing its investment in digital technologies.

Novartis CEO Vas Narasimhan stated last month when the company announced layoffs: “Our overall strategy is to position Novartis as a leading pharmaceutical company powered by digital technology. This means we will exit certain healthcare sectors or segments. After deliberation, our plan is to withdraw from the eye care devices and contact lenses businesses. Furthermore, we are also seeking to exit certain traditional oral care and small-molecule generic drug areas, while shifting the company’s focus toward new drug development based on technological platforms. This will represent a major strategic pivot for Novartis.”

Image from the Novartis official website

Novartis recognizes that emerging digital technology platforms, such as artificial intelligence and the Internet of Things (IoT), will have a significant impact on the healthcare industry. Indeed, the pharmaceutical sector currently has substantial opportunities to leverage these technologies to transform its business models and ultimately develop more effective new drugs. It is widely acknowledged within the industry that this will be a critical driver of digital transformation, bringing about comprehensive changes across the sector.

Novartis is also investing in digital innovation. In addition to its high-profile partnership with Pear Therapeutics, the company launched “Novartis Biome,” a digital health startup accelerator, last October. Furthermore, Novartis recently announced that its collaboration with commercial partner reSET has reached a milestone stage.

At Biome, Novartis will provide guidance to digital health companies and grant them access to its databases. However, Novartis has stated that it will not take equity stakes in these companies. Biome will also launch corporate challenges, offering winning startups a 12-month innovation program to help them conduct clinical trials, with decisions on technology investment based on the final trial outcomes.

Jacob LaPorte, Global Head of Digital Development at Novartis, stated, “Digitalization represents a significant and critical opportunity. We require an ecosystem to help advance our agenda. To this end, we must further develop this ecosystem and identify which partners can truly help us move forward in the most effective manner. Biome serves as an excellent bridge for Novartis to engage in more effective collaborations with other digital health companies.”

In addition, Novartis has integrated numerous digital technologies internally to strengthen its drug research and development, clinical trials, and operations. One of these is Nerve, which the company is using to optimize the operational performance of its data analytics engine. Another is an application called FocalView, which Novartis has incorporated into a series of clinical trials involving eye care.

Furthermore, Jacob LaPorte also mentioned Novartis’ collaborations with Medidata and Shyft Analytics, as well as its partnership with PathAI to leverage artificial intelligence for improving breast cancer detection.

Apart from its collaboration with Pear Therapeutics, Novartis does not position digital products as core offerings. However, Jacob LaPorte stated that the company is seeking to integrate digital tools and artificial intelligence as extensively as possible across its operations.