Novartis shares are lower Wednesday after the Swiss pharma firm announced its top lawyer is stepping down. Group General Council Felix R. Ehrat, has also apologised for co-signing a consulting contract with US President Trump’s personal attorney in 2017.
By 1330 BST, Novartis shares were 0.26% lower at CHF77.78. The stock has experienced some volatility during the first few months of 2018.
Novartis attempts to draw line under episode
In 2017, Novartis signed an agreement with Essential Consulting, a firm owned by Michael Cohen, US President Trump’s personal lawyer. Novartis said the contract was agreed between the two to help Novartis better understand the new President’s approach to the US healthcare system
After paying Essential Consultants a monthly fee of $100,000, the contract is now at an end. However, the US Senate Finance Committee is set to investigate the agreement, along with one between AT&T and Cohen’s firm.
Novartis said Ehrat “has decided to retire from his position in the context of discussions surrounding Novartis' former agreement with Essential Consultants, owned by Michael Cohen.”
Ehrat said: “Although the contract was legally in order, it was an error. As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”
Ehrat will leave Novartis on June 1, 2018. Former Novartis CEO Joe Jimenez resigned from the pharma firm in February.
Novartis also announced Shannon Thyme Klinger will replace Ehrat on June 1. Klinger is currently Chief Ethics, Risk and Compliance Officer at the Swiss firm.
“Shannon has a proven track record as a strong thought leader with a commitment to ethics and integrity,” said Novartis CEO Vas Narasimhan.
“She is an experienced and gifted lawyer who's already made tremendous contributions to the company. She brings the combination of private practice and industry experience in Europe and the US that we need, and I have no doubt that the company will benefit from her judgment and expertise,” Narasimhan added.