Novartis Completes Spinoff of Alcon Eye Care Business

GALWAY, IRELAND--April 24, 2019--Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Swiss pharmaceutical major Novartis International AG (NYSE:NVS) (Basel, Switzerland) has completed the planned spinoff of its Alcon eye-care business.

The successful execution of the Alcon spinoff will allow Novartis to focus its spending and resources on medicines, claiming the change gives it a "a financial profile closer to its pharmaceutical industry peers, including higher group margins." The spinoff of the Alcon eye care devices business was achieved through a dividend-in-kind distribution to holders of Novartis shares and American Depositary Receipts (ADRs), with each holder receiving one Alcon share for every five Novartis shares or ADRs held. Industrial Info reported on the planned spinoff in November. For additional information, see November 28, 2018, article - Novartis Accelerates Alcon Spinoff.

"This is an incredibly exciting day for both Novartis and Alcon," said Vas Narasimhan, the chief executive officer of Novartis. "Alcon has demonstrated consistent growth, and is coming to market from a position of strength. We wish them the very best for the future. At Novartis, we continue to reimagine ourselves as a leading medicines company powered by breakthrough medicines, data science and advanced therapy platforms. We are well-positioned for the future, and I am excited for our associates, our investors, and most importantly for patients."

The company cited a "an industry-leading, catalyst-rich pipeline" with 10 potential blockbuster launches expected in the next two years and an additional 20 potential blockbusters on the horizon. Of these potential blockbuster launches, four are planned in 2019, including brolucizumab (RTH258). RTH258 is part of the ophthalmology pharmaceuticals business retained by Novartis, which recorded sales of $4.6 billion last year and has a pipeline of treatments for presbyopia, dry eye and genetic diseases. Last year, Novartis announced plans to cut 2,550 jobs from its 13,000-strong workforce in Switzerland and the U.K. as part of its plans to shift to higher-margin drugs. For additional information, see October 8, 2018, article - Novartis Axing 2,550 Jobs in Switzerland and the U.K..

Alcon, which is now a publicly traded company, is the largest eye care device company in the world, with complementary businesses in surgical and vision care. It estimates that eye care is a $23 billion-a-year market, growing at roughly 4% annually. Last year, Alcon had sales of $7.1 billion, including $4 billion in surgical and $3.1 billion in vision care.

David Endicott, the chief executive officer of Alcon, commented on the split: "For more than 70 years, Alcon has been dedicated to helping people see brilliantly and now, as an independent company, we are pursuing even more opportunities to further that mission. We are poised to achieve sustainable growth and create long-term shareholder value as a standalone company. We have a long history of industry firsts and, as a nimble medical device company, we are sharply focused on providing innovative products that meet the needs of our customers, patients and consumers."

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