ZURICH (Reuters) – The chairman of Swiss drugmaker Novartis (NOVN.S) expects Alcon to be valued at between $20 billion and $30 billion when the opthalmic devices unit is spun off to shareholders next year, he said in an interview with Finanz und Wirtschaft.
“Just how much it’s ultimately going to be will be determined when we know how debt and other things will be quantified,” Joerg Reinhardt told the Swiss financial newspaper.
Novartis announced on Friday it is spinning off the eye care surgical equipment and contact lens unit, with $7 billion in annual revenue. The business no longer fits the drugmaker’s strategy of focusing on prescription medicines, Novartis concluded.
The Basel-based company will also repurchase up to $5 billion in shares through the end of next year.
Reinhardt said it was hard to determine whether Alcon, bought over time for $52 billion from Nestle in a deal concluded in 2011, ever really earned money for Novartis.
“Tough to say, since Alcon had to be revamped multiple times,” he said. “But I would say, all things considered, we didn’t lose money on Alcon.”
Reinhardt also said there were no changes to Novartis’s roughly $13 billion stake in Roche (ROG.S). His company has, for now, abandoned active plans to unload the package, and Reinhardt has returned to calling it “a financial investment with a certain strategic component.”
Novartis AG (NVS)
41 61 324 1111
Industry: Drug Manufacturers – Major
Full Time Employees: 124,000
Novartis AG researches, develops, manufactures, and markets a range of healthcare products worldwide. The company’s Innovative Medicines segment offers patented prescription medicines to enhance health outcomes for patients and health-care providers. This segment also commercializes products in the areas of oncology and rare diseases, ophthalmology, immunology and dermatology, neuroscience, respiratory, cardio-metabolic, and established medicines. The Sandoz segment provides active ingredients and finished dosage forms of pharmaceuticals in the areas of cardiovascular, central nervous system, dermatology, gastrointestinal and hormonal therapies, metabolism, oncology, ophthalmic, pain, and respiratory; active pharmaceutical ingredients and intermediates primarily antibiotics; protein or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services. The Alcon segment offers eye care products, such as eye care devices for cataract, retinal, glaucoma, and refractive surgery, as well as intraocular lenses to treat cataracts and refractive errors; viscoelastics, surgical solutions, surgical packs, and other disposable products for cataract and vitreoretinal surgery; and contact lenses, as well as contact lens care products, including multi-purpose and hydrogen-peroxide based solutions, rewetting drops, and daily protein removers. Novartis AG has collaboration agreements with Xencor; Surface Oncology; Intellia Therapeutics; Caribou Biosciences; Bristol-Myers Squibb; IBM Watson Health; Amgen; Allergan plc; Science 37, Inc.; Bill & Melinda Gates Foundation; and PEAR Therapeutics. Novartis AG was founded in 1895 and is headquartered in Basel, Switzerland.