Novartis Considers Spinning Off Alcon Unit

Source: Eyewiretoday.com

Novartis said it is considering several options for its Alcon unit, including the possibility of separating from the eye care division. The announcement comes after Novartis reported that Alcon’s fourth quarter earnings were flat.

In a statement, Novartis said the Alcon division is continuing to make progress toward a turnaround, but all options to maximize shareholder value were under consideration, including a spinoff or an initial public offering. Novartis expects to a full review of Alcon to take place “during the course of 2017.”

Also on Wednesday, Basel, Switzerland-based Novartis proposed buying back $5 billion of shares, and announced that earnings will probably remain flat or decline by a “low single digit” percent in 2017 as its top-selling medicine Gleevec faces generic competition.

Novartis net sales were $12.3 billion (-2%) in the fourth quarter, as volume growth of 6 percentage points was offset by the negative impact of generic competition (-4 percentage points) and pricing (-2 percentage points). At Alcon, sales declined 3 percent to $5.81 billion in 2016 as revenue from surgical equipment fell, mainly due to lower sales of cataract and refractive equipment, as well as competitive pressures in IOLs. Vision Care sales returned to growth, driven by strong performance of the daily contact lens portfolio, including continued double-digit growth of Dailies Total 1 globally.

Related Content