Novartis increases growth potential through integration of Alcon
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Novartis International AG /
Novartis increases growth potential through integration of Alcon
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* Alcon is innovative new growth platform with leading position in eye care
segment
* Alcon to accelerate growth through Novartis strength in market access,
reimbursement, and research capability
* Company raises cost synergy target to USD 350 million per year by 2013
* Novartis growth in new product portfolio and productivity to enable company
to absorb the impact of patent losses and maintain robust margins
* Diversified portfolio and geographic spread provide access to growth
opportunities while creating natural protection against macroeconomic trends
Basel, September 13, 2011 - Novartis presented an update on its long-term
strategy, performance and vision for continued sustainable growth and gave an
in-depth overview on the unique position and business model of the new Alcon
Division. The company's diversified healthcare portfolio across high growth
segments in healthcare as well as geographic distribution provides Novartis with
strength and advantages to benefit from current trends in healthcare as well as
protection from macroeconomic effects.
The company is on track to deliver against the strategic priorities set out in
2010. Over the last 18 months the company achieved:
* Double-digit sales growth through growth of new products that are
rejuvenating the portfolio and integration of Alcon
* Double-digit core operating income growth increasing its operating leverage
* Improved productivity and profitability resulting in margin improvement
* Double-digit sales growth in emerging markets
* Increasing leadership in innovation, resulting in 17 regulatory approvals in
the US and Europe in the Pharmaceuticals Division
* Returning over USD 15 billion to shareholders via dividends and share
buyback
Further, the acquisition of Alcon offers Novartis a solid growth platform in the
eye care segment.
"Alcon is enhancing future prospects for Novartis - it brings to us a fast
growing business in the eye care segment. This transaction was about long-term
growth and not just cost synergies," said Joseph Jimenez, CEO of Novartis. "We
believe that Alcon has significant growth potential by leveraging the Novartis
expertise in research, market access, and reimbursement, among others."
Alcon - a new growth platform in eye care
* Aspiration for high-single to low-double-digit sales growth
* Annual cost synergies of USD 350 million by 2013 expected
* Operating leverage and synergies to drive margin expansion to best in class
levels
* Largest commitment in industry on ophthalmology R&D to continue to develop
new technologies and therapies
Alcon is the world leader in eye care with leading businesses in surgical,
pharmaceutical, and vision care products including contact lenses and care
products.
By delivering against the Novartis strategic priorities, Alcon expects to create
further value by continuing to outgrow its market segments through market
development, market share increases, and introduction of innovative new
treatments and surgical options. Including revenue synergies achieved over time,
the new division aspires to achieve growth in the high-single to low-double-
digit range, mainly driven by delivering against the following priorities:
* Growth of cataract procedures globally
* Increase in the value of cataract procedures through the conversion to
phacoemulsification
* Penetration of advanced technology intra-ocular lenses (IOLs) and the
introduction of LenSx, a novel refractive laser surgical platform
* Share increase across the pharmaceutical portfolio, especially dry eye and
glaucoma outside the US
* Building of Vision Care global commercial capability
* Successful launch of Dailies Total 1, a new technology for daily disposable
contact lenses
* Market and brand development in key emerging markets
Alcon is leading innovation in eye care, with 15 key regulatory approvals in
2010, 11 key approvals so far in 2011 and continued regulatory filings over the
next three years, including new technology platforms in the surgical field. The
company will explore novel pharmaceutical treatments for glaucoma and macular
degeneration in an effort to expand its leadership in the ophthalmic
pharmaceutical market. In spite of competitive glaucoma product patent
expirations, Alcon expects that its glaucoma portfolio including benzalkonium
chloride free (BAK-free) formulations of Travatan and DuoTrav along with Azarga
and a new combination product, will continue to grow over the next five years in
the low-single-digit range, baring unforeseen events.
The company plans to expand its leadership in the pharmaceutical treatment of
glaucoma and macular degeneration, through the research and development of novel
treatments. With the largest research and development (R&D) investment in
ophthalmology, Alcon's commitment is further enhanced by the Novartis Institutes
for BioMedical Research (NIBR) capabilities. Investments in eye care R&D are
planned to increase to the low double digit range as a percent of sales, while
leveraging the know-how and resources of NIBR by following the pathways
philosophy to identify new targets and treatments. Through a balanced pipeline,
the launch of new products and emerging high potential research projects, Alcon
is expected to further grow while continuing to expand margins despite higher
R&D investments.
Additionally, margins are expected to be bolstered through the capture of USD
350 million in annual cost synergies by 2013 and leverage of Novartis
infrastructure for market access and in emerging markets. Alcon expects that by
leveraging Novartis' scale, it will increase its savings from procurement from
currently 1- 2 percent to 5-6 percent, thus significantly reducing its cost base
and contributing to margin improvements.
Delivering on the Novartis strategic priorities
"As shown by our achievements over the past 18 months, we are executing well
against a sound strategy," said Joseph Jimenez, CEO of Novartis. "Our continued
focus on execution against our strategic priorities of innovation, growth and
productivity enables us to deliver operating and cash leverage, creating
attractive financial returns to shareholders."
Extending the lead in innovation
Novartis continued to lead the industry with the most innovative pharmaceutical
pipeline in Pharmaceuticals with 11 approvals in 2010, as well as six approvals
and eight new regulatory filings in the first half of 2011. The company is
committed to sustained investment in research to develop targeted therapies that
could change the practice of medicine and deliver the highest benefit for
patients.
Accelerating growth
The ongoing transformation of the Novartis Pharmaceuticals portfolio continues
to build momentum in sales growth with recently launched products growing 47
percent for the first half of 2011 versus the same period in 2010. The company
expects growth in these products, together with the continuing drive for
productivity, to enable the company to absorb the impact of patent losses and
maintain robust margins, baring any unforeseen events. Furthermore, the company
is well positioned to take advantage of the growing healthcare needs in emerging
markets, with the top six emerging markets showing 12 percent growth in 2010
compared to 2009.
Driving productivity
Efforts in productivity across the Group have contributed to more than USD 1.2
billion in savings in the first half of 2011 and are expected to exceed the USD
1.9 billion in savings from 2010. Over the last 18 months more than USD 1.6
billion of savings has been achieved from procurement measures. Novartis has
also progressed reducing excess manufacturing sites, with 10 locations having
been or being either divested, exited or operations being reduced.
In addition, the company continuously looks at simplifying its structures,
especially in G&A to speed up decision making and free up resources. The
streamlining of core processes across the Group and the implementation of core
service centers for functions such as Human Resources and Finance will further
provide leverage and resources for reinvestment.
In summary, the company's diversified healthcare portfolio across high growth
segments in healthcare as well as geographic distribution and the continued
execution on our strategic priorities provides Novartis strength and advantages
to benefit from current trends in healthcare as well as protection from
macroeconomic effects.
Changes in Novartis Pharmaceuticals Management
Trevor Mundel, Global Head of Development, Novartis Pharmaceuticals Division,
has informed the company of his intention to leave Novartis, and to join The
Bill & Melinda Gates Foundation as Executive Director of its Global Health
Program. Mr. Mundel will remain with Novartis until December 1, 2011 and his
successor will be named shortly.
All product names appearing in italics are trademarks owned by or licensed to
Novartis Group Companies.
Disclaimer
The foregoing release contains forward-looking statements that can be identified
by terminology such as "potential," "estimate," "growth platform," "to
accelerate," "growth opportunities", "strategy," "vision," "on track,"
"strategic," "future prospects," "plans", "planned", "long-term," "aspiration,"
"expected," "to drive," "commitment," "to continue," "expects," "aspires,"
"will," "expected," "pipeline," "anticipated," "expect," "committed," "could,"
"momentum," or similar expressions, or by express or implied discussions
regarding potential new products, potential new indications for existing
products, or regarding potential future revenues from any such products; or
regarding potential growth opportunities from the merger of Alcon and Novartis,
or the potential impact on Alcon or Novartis of the merger; or any potential
synergies, strategic benefits or opportunities as a result of the merger; or
regarding potential future sales or earnings of the Novartis Group or any of its
divisions, including Alcon, as a result of the merger or otherwise; or by
discussions of strategy, plans, expectations or intentions. You should not place
undue reliance on these statements. Such forward-looking statements reflect the
current views of the Group regarding future events, and involve known and
unknown risks, uncertainties and other factors that may cause actual results to
be materially different from any future results, performance or achievements
expressed or implied by such statements. There can be no guarantee that any new
products will be approved for sale in any market, or that any new indications
will be approved for existing products in any market, or that such products will
achieve any particular revenue levels. Nor can there be any guarantee that
either Novartis or Alcon will be able to realize any of the potential synergies,
strategic benefits or opportunities as a result of their merger. Nor can there
be any guarantee that the Novartis Group, or any of its divisions, including
Alcon, will achieve any particular financial results, whether as a result of the
merger or otherwise. In particular, management's expectations could be affected
by, among other things, unexpected regulatory actions or delays or government
regulation generally; unexpected clinical trial results, including additional
analyses of existing clinical data or unexpected new clinical data; the Group's
ability to obtain or maintain patent or other proprietary intellectual property
protection; disruptions from the merger and integration with Alcon making it
more difficult to maintain business and operational relationships, and
relationships with key employees; unexpected product manufacturing issues;
uncertainties regarding actual or potential legal proceedings, including, among
others, product liability litigation, litigation regarding sales and marketing
practices, government investigations and intellectual property disputes;
competition in general; government, industry, and general public pricing and
other political pressures; uncertainties regarding the after-effects of the
recent global financial and economic crisis; uncertainties regarding future
global exchange rates and uncertainties regarding future demand for our
products; uncertainties involved in the development of new healthcare products;
the impact that the foregoing factors could have on the values attributed to the
Group's assets and liabilities as recorded in the Group's consolidated balance
sheet; and other risks and factors referred to in Novartis AG's current Form 20-
F on file with the US Securities and Exchange Commission. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated or expected. Novartis is providing the
information in this release as of this date and does not undertake any
obligation to update any forward-looking statements as a result of new
information, future events or otherwise.
About Novartis
Novartis provides healthcare solutions that address the evolving needs of
patients and societies. Focused solely on healthcare, Novartis offers a
diversified portfolio to best meet these needs: innovative medicines, eye care,
cost-saving generic pharmaceuticals, consumer health products, preventive
vaccines and diagnostic tools. Novartis is the only company with leading
positions in these areas. In 2010, the Group's continuing operations achieved
net sales of USD 50.6 billion, while approximately USD 9.1 billion (USD 8.1
billion excluding impairment and amortization charges) was invested in R&D
throughout the Group. Headquartered in Basel, Switzerland, Novartis Group
companies employ approximately 121,000 full-time-equivalent associates and
operate in more than 140 countries around the world. For more information,
please visithttp://www.novartis.com.
Novartis is on Twitter. Sign up to follow (at)Novartis at
http://twitter.com/novartis.
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Novartis International AG
Postfach Basel
WKN: 904278;ISIN: CH0012005267;
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Unternehmensinformation / Kurzprofil:
Datum: 13.09.2011 - 12:00 Uhr
Sprache: Deutsch
News-ID 64379
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contact information:
Town:
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