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Novartis' nomination of recent Bristol Myers Squibb CEO Giovanni Caforio, M.D., as its new chair of the board raises the question of whether the Swiss pharma will be changing his M&A strategy. Giovanni Caforio, M.D., is lining up a new gig soon after handing all his Bristol Myers Squibb leadership roles over in March. The recent Big Pharma CEO has been proposed as the new chair at Novartis. Caforio, 59, will stand for election as chair of Novartis’ board of directors at the Swiss pharma’s next annual general meeting in 2025, when current Chair Joerg Reinhardt ends his 12-year tenure, Novartis said Tuesday during its first-quarter financial results.  Caforio was CEO of BMS from May 2015 to November 2023 and continued his service as the executive chair before handing the new helmsman Chris Boerner, Ph.D., the top board job as well at the beginning of this month. It’s unconventional—to say the least—for a Big Pharma CEO to become a rival drugmaker’s chair. In a Tuesday release, Novartis credited Caforio for transforming BMS into “a global medicines company with strong capabilities across R&D and commercialization.” Novartis’ board went through a thorough search process before choosing Caforio, Chief Financial Officer Harry Kirsch told reporters during a press call on Tuesday. “The board was looking for candidates with strong industry experience and expertise, and leading also a pure-play pharma company, given our strategy and focus. And the key focus was on finding a candidate with a deep understanding of the strategic trajectory of Novartis,” Kirsch said. “And priority was also given to candidates with global experience, including extensive knowledge of the U.S. market, where we also aspire to become a top player.” Novartis recently became a pure-play innovative medicines company after separating the generics maker Sandoz. The company also adopted a “U.S.-first” mindset, putting the U.S. market center in its decision-making on R&D, business development, commercialization and patient services. Caforio’s nomination also raises the question of whether Novartis will be changing its dealmaking strategy. The former BMS chief executive was known for striking some of the industry’s largest M&As, including the $74 billion acquisition of Celgene in 2019 and the $13.1 billion deal for MyoKardia in 2020. The New Jersey pharma jumped on an M&A spree toward the end of 2023, while Caforio was still executive chair. By contrast, Novartis is historically not an aggressive buyer in the pharma space. Some of its largest deals in the past two decades include the $39 billion deal for Alcon, which Novartis has later spun off into a separate eye care business. In terms of drugs, the $9.7 billion buyout of The Medicines Company was among Novartis’ largest in recent years. Since then, CEO Vas Narasimhan has been pointing to bolt-on deals of the size around or below $5 billion as Novartis’ dealmaking strategy. According to Kirsch, those bolt-on deals remain Novartis’ sweet spot—at least for now. “This absolutely does not change anything of our strategy,” Kirsch said of Caforio’s nomination during a press call Tuesday. “Our focus is on strong internal R&D, and continuous to increase our already good R&D productivity further, and then bolt-on M&A to strengthen our four [therapeutic areas].” But the CFO also added that since Caforio’s nomination is about a year from now, “I’m sure until then there will be other discussions,” although there’s currently no change of strategy. Novartis is currently in the process of acquiring MorphoSys for 2.7 billion euros ($2.9 billion) with eyes on the German biotech’s BET inhibitor candidate pelabresib. In answering a separate question about M&A appetite, Kirsch again highlighted that $5 billion is “more likely” to be Novartis’ targets in the future, while conceding that “it’s never a formula.”

Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year.Reinhardt has served as Novartis chair since 2013 and plans to retire when his 12-year term ends in 2025. The appointment of Caforio will be put to Novartis shareholders at the companys annual general meeting. Announcement of the planned succession Tuesday came alongside first quarter earnings that beat Wall Street forecasts.Caforio spent two decades at Bristol Myers, rising through the ranks to become the companys CEO in 2015. Under his eight-year tenure as chief, Caforio oversaw a number of major acquisitions, most notably the $74 billion buyout of Celgene that greatly expanded Bristol Myers cancer drug business. More recently, the company agreed to pay $14 billion to acquire brain drug developer Karuna Therapeutics and its closely watched treatment for schizophrenia.He was replaced as Bristol Myers CEO by Chris Boerner in November.Reinhardt, meanwhile, started at Sandoz in 1982, joining Novartis via the 1996 merger of Sandoz and Ciba-Geigy. He held several executive positions, including chief operating officer and head of Novartis then vaccines and diagnostics division, before he was appointed board chair.During his time as chair, Novartis switched CEOsand underwent a significant transformation. The drugmaker sold its consumer business to GSK for $13 billion in 2018 and spun out its eye business Alcon.The company shed its long-held stake in Roche in 2021 and later restructured its workforce and drug pipeline. Last year the company spun out Sandoz, completing the last major step in current CEO Vas Narasimhans plan to focus Novartis on high-margin prescription pharmaceuticals. '

Giovanni Caforio, who stepped down as CEO at Bristol Myers Squibb, took a small pay cut to $19.7 million in 2023. In his final year as CEO at Bristol Myers Squibb, Giovanni Caforio took a slight dip in pay to $19.7 million, down from the $20.1 million he collected in 2022, according to the company’s proxy filing (PDF). Compared with most of the other CEOs in his Big Pharma orbit, Caforio, 60, saw remarkably little change in his compensation over his eight-year tenure as BMS' helmsman. In each of his final seven years in charge of the New Jersey company, he received between $18.7 million and $20.1 million. Meanwhile, the company's revenue increased from $16.6 billion in 2015 to $45 billion last year. Sales, however, have fallen the last two years. A large chunk of the revenue increase over Caforio’s tenure can be attributed to BMS' $74 billion buyout of Celgene in 2019. Caforio’s stock awards—which are tabulated as performance share units in the company’s lexicon—increased from $14.29 million in 2022 to $14.47 million last year. His salary increased from $1.7 million to $1.75 million, along with his other compensation from $613,000 to $735,000.  His cash bonus, meanwhile, dropped from $3.45 million to $2.71 million. Caforio, who will head up the board of directors during a transition period, has handed the keys to the CEO office over to Chris Boerner, 53, who received $8.5 million last year, which was up from his 2022 pay of $6.9 million when he served as chief commercial officer. A large chunk of his pay increase came from a stock awards increase. Boerner, who came to BMS in 2015 after five years at Seagen, faces a daunting patent cliff with the recent loss of exclusivity of blood cancer drug Revlimid and the oncoming loss of patent protection for blood thinner Eliquis in 2026 and versatile cancer med Opdivo in 2028. Caforio has helped set up BMS for success in the transition, however, overseeing 12 product launches during his tenure. These include newly approved plaque psoriasis drug Sotyktu, obstructive hypertrophic cardiomyopathy treatment Camzyos and melanoma therapy Opdualag. The company also has taken a leading role in launching cancer cell therapies with Abecma and Breyanzi.