• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • Subscribe

Drug Delivery Business

  • Clinical Trials
  • Research & Development
  • Drug-Device Combinations
  • FDA
  • Pharmaceuticals
  • Policy

UPDATE: Potential Alcon sale worries Novartis investors

May 31, 2017 By Brad Perriello

Novartis eyes Alcon sale

Updated to include new details of Novartis’ M&A strategy.

Novartis (NYSE:NVS) CEO Joe Jimenez’s consideration of the sale of the Alcon subsidiary has investors worried that the influx of cash – Alcon’s surgical devices and contact lens business could fetch as much as $35 billion – will result in another misguided acquisition.

The Swiss drugmaker paid $52 million for Alcon in 2011, but the division’s sales and earnings have been on the schneid for the past 2 years, prompting Jimenez to mull a sale. Also in play is a $ 14 billion stake in pharma rival Roche (PINK:RHHBY) and a $10 billion over-the-counter drug joint venture with GlaxoSmithKline (NYSE:GSK). Novartis faces a March 2018 deadline to exercise its put option for its 36.5%, with GSK said to be a willing buyer.

But the Alcon fiasco has investors chary of another big buyout.

“We would applaud selling those stakes, generally, but what do you do with that money?” Invesco Perpetual analyst Stephen Anness said. “I would be very cautious about selling stakes … in things to raise a war-chest to go and do a massive deal, only for that deal to go and be another poor deal.”

A fund manager Reuters said is among Novartis’s top-60 investors told the wire service that the Alcon stumble raises red flags about management’s ability to handle a blockbuster integration.

“A big deal might solve some of their issues, but personally I would prefer to see them doing smaller acquisitions,” the investor said. “A cash mountain of $50 billion would definitely make me nervous.”

Part of the problem for Novartis is a dearth of market-approved immuno-oncology drugs compared with rivals Roche, Merck (NYSE:MRK) and Bristol-Myers Squibb.

Jimenez has previously said that the focus is on smaller transactions of up to $5 billion, including lower-risk drug licensing deals, and on Wednesday, Jimenez reaffirmed his position.

“Obviously, there’s been a lot of speculation because that would be a lot of capital,” Jimenez said, referring to a possible sale of Alcon.

“We don’t need a big deal,” he added. “Our strategy in M&A is to do bolt-on acquisitions.”

Jimenez also said he would provide an update regarding the division by the end of this year.

Material from Reuters was used in this report.

Filed Under: Featured, Mergers & Acquisitions, Optical/Ophthalmic Tagged With: Alcon, Novartis

IN CASE YOU MISSED IT

  • Elixir Medical reports sustained durability with bioadaptor compared to Medtronic stent
  • Senseonics closes public offering, private placement with Abbott
  • Embecta eyes shift from insulin delivery to broader medical supplies focus
  • Medtronic earns expanded CE mark for Prevail paclitaxel-coated balloon
  • Sequel Med Tech to pair automated insulin delivery system with Abbott’s future dual glucose-ketone sensor

Primary Sidebar

“ddb
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest news and trends happening now in drug delivery.

MEDTECH 100 INDEX

Medtech 100 logo
Market Summary > Current Price
The MedTech 100 is a financial index calculated using the BIG100 companies covered in Medical Design and Outsourcing.

Footer

Drug Delivery Business News Logo

MassDevice Medical NETWORK

MassDevice
DeviceTalks
Medical Tubing + Extrusion
Medical Design & Outsourcing
MedTech100 Index
Drug Discovery & Development
Pharmaceutical Processing World
Medical Design Sourcing
R&D World

DRUG DELIVERY BUSINESS NEWS

Subscribe to Drug Delivery’s E-Newsletter
Advertise with us
About
Contact us
Privacy
Listen to our Weekly Podcasts

Copyright © 2025 · WTWH Media LLC and its licensors. All rights reserved.
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media.

Privacy Policy | RSS