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Novartis Unveils Legal Leadership Change as Biotech Hiring Booms

March 5, 2021, 10:34 PM

Novartis AG announced Friday that its global head of litigation, Thomas Kendris, will on an interim basis succeed its outgoing chief legal officer Shannon Thyme Klinger.

Novartis said in a statement that Klinger will depart the Swiss drug giant March 15 to return to the U.S. and take a job at “a biotechnology company.” Novartis didn’t identify the company and declined to discuss Klinger’s new role. Klinger didn’t respond to a request for comment on the matter.

Her move is the latest in a series of comings-and-goings by law department leaders working for biotechnology startups, drug developers, and medical equipment manufacturers. The health care, life sciences, and pharmaceutical sectors have been busy hiring lawyers within the past year, in part due to the increased demands on some companies stemming from the coronavirus pandemic.

Novartis promoted Klinger nearly three years ago to its top legal role upon the resignation of former group general counsel Felix Ehrat, who stepped down following the disclosure of a consulting agreement he approved with Michael Cohen, the former personal lawyer to President Donald Trump.

Cohen received $1.2 million in payments from Novartis, which in late 2018 appointed Klaus Moosmayer to be its head of ethics, risk, and compliance as part of a legal and compliance overhaul by the Basel, Switzerland-based pharmaceutical company.

Klinger had served as chief ethics, risk, and compliance officer and head of litigation at Novartis, roles she assumed in May 2016 after working as global head of legal and general counsel for the company’s Sandoz generic drug division.

During her time as Novartis’ top lawyer, Klinger, a former partner at Alston & Bird and Mayer Brown, implemented a program requiring the company’s 22 “preferred” outside law firms to commit themselves to diverse staffing goals.

Novartis announced in February 2020 that it would hold back 15% of total billings from its group of outside vendors unless those firms devoted 30% of billable associate time and 20% of partner time to women, racially and ethnically diverse individuals, or members of the LGBTQ community.

In an interview last month with Legal Week, a trade publication in the U.K., Klinger said that within the past year 49% of partners and 68% of associates working on Novartis matters have met its diverse criteria. She noted that Novartis has not yet had to hold back fees from any firm.

Novartis CEO Vasant Narasimhan in a statement praised Klinger for her “leadership, counsel, and impact on our businesses over 10 years.” He said Klinger “created one of the most respected legal departments within the industry, including for its commitment to diversity and inclusion.”

Legal Needs

Novartis is not the only major pharmaceutical company poised to lose its top lawyer amid a robust market for the development and marketing of new drugs, products, and treatments.

Moderna Inc., which has been busy hiring legal, compliance, and regulatory experts in recent months as it rolls out a popular—and lucrative—vaccine for Covid-19, has confirmed that its general counsel Lori Henderson is preparing to retire this year.

Ray Jordan, chief corporate affairs officer at Cambridge, Mass.-based Moderna, declined to discuss whether Klinger would be an ideal candidate to fill its soon-to-be-vacant legal chief position.

At least one former Novartis in-house lawyer has recently jumped to Moderna. Novartis senior legal counsel Lisa Kinsella joined Moderna’s European headquarters as an associate general counsel in Basel last fall.

Novartis’ new interim legal chief, Kendris, who currently serves as the company’s U.S. country president, global head of litigation, and president of Novartis Corp., didn’t respond to a request for comment when asked about Klinger’s future plans.

He’s spent more than two decades at Novartis in a variety of legal and executive positions. In 2016, Kendris publicly supported the merger of Arnold & Porter and Kaye Scholer. The combined Arnold & Porter Kaye Scholer is one of the 22 firms that comprise Novartis’ preferred legal advisory panel.

Novartis said in a statement Friday that it’s “started an executive search process to evaluate internal and external candidates for the role of its chief legal officer.”

The company touted Kendris’ 25 years of experience across its various businesses, noting that he’s been responsible for “material litigations and investigations globally.”

That portfolio would include a $195 million Sandoz settlement last year of U.S. drug price-fixing charges, a $347 million settlement of an overseas U.S. bribery investigation, and the $678 million resolution of a U.S. bribery case involving doctors that resulted in a $109.4 million whistleblower award.

In September, Novartis and Swiss rival Roche Holding AG were fined a combined $524 million by French regulators who accused both companies of restricting competition for eye treatments.

Novartis, which in December agreed to pay $770 million to acquire privately held U.S. drug developer Cadent Therapeutics Inc., has recently moved to further the production of therapies to treat the coronavirus.

The company agreed in January to help Pfizer Inc. and German joint venture partner BioNTech SE ramp up production of their Covid-19 vaccine. Novartis reached a separate deal this month with German drug company CureVac NV to mass produce a Covid-19 vaccine expected this summer.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com
Rebekah Mintzer at rmintzer@bloomberglaw.com

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