Chiron at the Crossroads

Three years into a new CEO's regime, Chiron is trying to forge a unique compromise between research and commercial focus and the stability which comes from a diversified business. But Chiron is at a crossroads: its earnings growth, boosted significantly by a now complete cost-reduction program, doesn't look sustainable without major new products. And those Chiron does not appear to have. Moreover, its major shareholder, Novartis, has an option to buy the company and top management fears they will should the stock show significant signs of weakness, brought on, perhaps, by investments (and consequent earnings reductions) in potential high-growth areas. In effect, Chiron managers are afraid to invest significantly for fear of what Novartis will do should the stock price fall. Moreover, to some degree, Chiron is caught by its business diversity: it can't focus its spending on any one area, particularly biopharmaceuticals, without starving its other businesses--but without a significant increase in R&D spending, particularly in the drug unit, observers don't see how Chiron, which has been uniquely unsuccessful with its pipeline projects, can drive the long-term earnings growth it needs.

by Roger Longman

Last October 2000, Sean Lance, the chairman and CEO of Chiron Corp. , crossed paths with Daniel Vasella, chairman...

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on In Vivo for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required

More from Business Strategy

Late-Stage GLP-1 Drug Trials Outside The Cardiometabolic Space

 
• By 

A look at Novo Nordisk, Eli Lilly and other companies' late-stage clinical studies of GLP-1 drugs in indications ranging from neurodegeneration to oncology, and alcoholic liver disease to autoimmune conditions.

Rising Leaders 2025: Metsera’s Whit Bernard’s Musical Path To Biotech Leadership

 
• By 

Metsera CEO Whit Bernard applies an unconventional leadership philosophy to develop next-generation obesity therapeutics, including monthly GLP-1 injections and oral peptides.

AI In Drug Discovery: The Patent Implications

 
• By 

A Q&A with DeAnn Smith, partner and co-chair of the Patent Trial and Appeal Board Proceedings Practice Group at law firm Foley Hoag.

Is Advanced AI Revolutionizing Sales Enablement In Pharma?

 
• By 

Advanced AI is revolutionizing sales enablement by addressing training gaps and performance challenges. Used correctly, it can help to bridge the sales-marketing divide, accelerate ramp-up times and provide managers with data-driven insights.

More from In Vivo

Crisis Or Opportunity? US MFN Policy Could Test Japan’s Appetite For Reforms

 
• By 

While the adoption of most favored nation drug pricing in the US stands to affect Japanese biopharma firms now heavily reliant on this market, it might also present an opportunity for pricing and policy reforms at home.

Rising Leaders 2025: Ovid’s Meg Alexander On Neurology’s Next Frontier

 
• By 

Ovid Therapeutics' president and COO Meg Alexander is leading the company’s strategic pivot toward innovative neurological treatments, potentially creating a new class of medicines for rare neurological disorders.

The Goldilocks Isotope: Perspective Therapeutics’ ‘Just Right’ Alpha Radiotherapeutic

 
• By 

Thijs Spoor's bet on lead-212 is paying off as Perspective Therapeutics advances three clinical programs with promising early efficacy signals and a comprehensive manufacturing strategy.