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Novartis becomes global eye health leader as Alcon deal finalised

Published on 15/12/10 at 10:57am
Novartis' Swiss HQ
The end of Novartis' standoff with a minority of Alcon shareholders gives it a comanding position in ophthalmology

Novartis’ 11-month standoff with Alcon shareholders has ended, allowing it to acquire all the remaining shares in the ophthalmology firm.

In gaining the last 23% of shares, and control of Alcon, the pharma company becomes the world’s number one in eye health at a total care of $51.6 billion.

Novartis spent $12.9 billion - $1 billion more than it originally planned – to win over the minority of stockholders who had been holding out on releasing their shares since January.

Novartis chief executive Joseph Jimenez said: “The growth synergies here are significant, as Alcon will be the eye care development engine for our best-in-class research organisation, and will leverage the Novartis market access capabilities outside the US.”

The merger is expected to be gain regulatory approval during the first half of 2011 and following its completion Alcon will form Novartis’ new eye care division by the end of 2011. 

Kevin Buehler, current president and chief executive of Alcon, will lead the new division.

Buehler said: “This merger will create a stronger eye care business with broader commercial reach and enhanced capabilities to develop innovative eye care products that fulfil unmet clinical needs in eye care.

“The combination of Alcon's deep understanding of the eye care specialty and the broad expertise and scale of Novartis will address virtually all key areas of eye care and position the Alcon business unit for faster growth.”

The global eye care sector has become a growing element within the health services’ industry given the increase in an ageing population and an unmet need in visual care.

Alcon is the world’s largest and most profitable pharmaceutical ophthalmology company with 2009 annual sales reaching $6.5 billion.

Novartis aims to put the company to work on a number of collaborations including the launch of Lucentis, its treatment for the eye condition diabetic macular edema.

Novartis took the first steps toward acquiring the Swiss-based eye care specialist in July 2008 when it purchased a 25% stake from its former owner Nestle, followed in August of this year with a further purchase of 52% of the remaining shares.

Dr Daniel Vasella, chairman of Novartis, said: “The full merger is the logical conclusion of our initial strategic investment in Alcon.

“With this step Novartis takes full ownership, becoming the global leader in eye care, a rapidly expanding, innovative platform based on the growing needs of an aging population.”

This move fits into Novartis’ new diversification model outlined in November as it begins to wean itself from the sharp-end of pharma patent cycles and de-risk in new areas such as generics and ophthalmology.

Ben Adams

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