The deal will strengthen Novartis’s world No.2 position in cancer cure
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Zurich: Novartis and GlaxoSmithKline traded over $20 billion worth of assets on Tuesday, aiming to bolster their best businesses and exit weaker ones as the drugs industry reshapes to cope with healthcare spending cuts and generic competition.
The deals, which include Novartis buying GSK’s cancer drugs unit and GSK acquiring Novartis’ vaccines business, came hot on the heels of a newspaper report that AstraZeneca had turned down a $101 billion approach from Pfizer a story that sent shares across the sector surging. The global pharmaceuticals industry has seen a flurry of deal making recently as most large companies seek to focus on a small number of leading businesses, while smaller specialty and generic producers seek greater scale.
Deal values have almost doubled since the start of the year to $77.9 billion compared with the same period in 2013, according to available data.The overhaul at Novartis marks the end of a year-long review of its sprawling portfolio after the departure of long time CEO and chairman Daniel Vasella, the architect of the merger of Ciba-Geigy and Sandoz which led to Novartis’ formation in 1996. The Swiss firm said it had agreed to buy GSK’s oncology products for $14.5 billion plus another $1.5 billion that depends on the results of a trial in melanoma.
The deal will strengthen Novartis’s world No.2 position in cancer behind cross town rival Roche.Novartis said it was also selling to GSK its vaccines, excluding flu, for $5.25 billion plus potential milestone payments of up to $1.8 billion and ongoing royalties, as well as creating a joint venture with GSK in consumer healthcare. In addition, it is selling its animal health arm to Eli Lilly for approximately $5.4 billion
( Source : reuters )
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