Novartis spins off Alcon as CEO focuses drug search

Novartis has announced a plan to spinoff Alcon – its eye care division – into a separately-traded standalone company.

The planned spinoff will enable Novartis and Alcon to focus on their respective growth strategies, with completion subject to market conditions, tax rulings, final Board of Directors endorsement and shareholder approval at the 2019 AGM.

Novartis also announced it will initiate a share buyback of up to $5 billion to be executed by the end of 2019. Joerg Reinhardt, Chairman of Novartis, said: "Our strategic review examined all options for Alcon ranging from retention, sale, IPO to spinoff. The review concluded that a spinoff would be in the best interests of Novartis shareholders and the Board of Directors intends to seek shareholder approval for a spinoff at the 2019 AGM. This transaction would allow our shareholders to benefit from potential future successes of a more focused Novartis and a standalone Alcon, which would become a publicly traded global medtech leader based here in Switzerland."

Novartis acquired Alcon in 2011 when the business included surgical, vision care and ophthalmic pharmaceuticals. In January 2016, Novartis began the process of creating two best-in-class businesses with the transfer of Alcon's ophthalmic pharmaceuticals to the Novartis Innovative Medicines Division.

The leading ophthalmology pharmaceuticals business will continue to develop as part of Novartis, with 2017 sales of $4.6 billion and the potential blockbuster medicine RTH258 (brolucizumab) in development for neovascular AMD and diabetic macular edema. The Alcon Division is now focused on surgical and vision care.

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