Maintenance. We are currently updating the site. Please check back shortly

Thomson Reuters Foundation

Inform - Connect - Empower

Novartis transforms drug business via deals with GSK and Lilly

Source: Reuters - Tue, 22 Apr 2014 06:20 GMT
Author: Reuters
hum-dis
Tweet Recommend Google + LinkedIn Email Print
Leave us a comment

(Adds details, background)

ZURICH, April 22 (Reuters) - Swiss drugmaker Novartis is transforming its business by exchanging certain assets with GlaxoSmithKline and divesting its animal health business to Eli Lilly in deals worth billions of dollars.

The revamp, announced on Tuesday, is the result of a keenly awaited strategic review at the company.

Chief Executive Joe Jimenez said the changes would focus the company on innovative businesses with global scale. "They also improve our financial strength, and are expected to add to our growth rates and margins immediately," he said.

Novartis said it had agreed to acquire GSK's oncology products for a $14.5 billion payment. The Swiss drugmaker will also divest its vaccines business, excluding flu, to GSK for $7.1 billion plus royalties.

In a separate transaction, Novartis said it had agreed to divest its animal health division to Eli Lilly for approximately $5.4 billion.

The deals mark a major reorganisation for GSK too, which is to return 4 billion pounds to shareholders following the changes. GSK will take the lead in running a future consumer health business with Novartis but will effectively give up its ambitions to be a global leader in oncology.

GSK said the company would in future have a balanced business centered around consumer health, vaccines, respiratory and HIV medicines, which together would account for about 70 percent of revenues. (Reporting by Alice Baghdjian and Ben Hirschler; Editing by Erica Billingham)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of the Thomson Reuters Foundation. For more information see our Acceptable Use Policy.

comments powered by Disqus
Most Popular
TOPICAL CONTENT
Topical content
LATEST SLIDESHOW

Latest slideshow

See allSee all
FEATURED JOBS
Featured jobs