The Novartis Apprentice: You're Hired!

Novartis Headquarters
Novartis Headquarters

What does it say when a drugmaker hires a Goldman Sachsinvestment banker as its next Chief Financial Officer?

That's the question I'm asking after Novartis announcedthat it's tapped a managing director of investment banking at Goldman Sachs, Jonathan Symonds, as its CFO apprentice.

Okay, that's what I'm calling him. Novartis refers to the 50-year-old Symonds as "deputy CFO and as CFO designate." So, starting September 1st Symonds is going to shadow the current CFO Raymond Breu until he retires on March 31st next year. Breu, who is turning 65, has been with NVS for 35 years. That kind of longevity at a single company is almost unheard of these days.

Before working at Goldman, Symonds was CFO at AstraZeneca for eight years where, according to Novartis' press release, his duties included strategy and mergers and acquisitions. Of course, M&A is the name of the game in big pharma right now. So far this year, Pfizer's buying Wyeth, Merck's buying Schering-Ploughand Roche bought Genentech. So, who's next?

In an exclusive interview with NVS Chairman and CEO Dr. Daniel Vasellalast week I asked him about the current consolidation wave and whether he'd get caught up in it. Beyond the Nestle/Alcon deal, Dr. Vasella would only say, "The future will tell." Well, one week into the future, he's gone out and hired an investment banker as his CFO.

Coincidentally, JPMorgan pharma analyst Chris Schott is out with a research note for clients today titled, "Perspective On The Next Pharma Deal." He thinks the two major American drug companies that haven't done a mega deal (yet), Bristol-Myers Squibband Eli Lilly, will probably do "small/mid-sized transactions." Some analysts and investors have speculated the two might hook up, but it's just rumor and speculation at this point. Schott points out that BMY has around $9 billion in "gross cash" and LLY has nearly $5 billion.

They're not the only ones sitting on a bunch of cash. Pretty much all of the big pharmas have a significant amount of spending money. And soon NVS will have an investment banker at the helm, with a pharma background to boot, to help the company figure out where to put its capital to work.


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