Novartis will spin off the eye care business to shareholders and buy back up to $5 billion in stock.
The Alcon business will be spun off to shareholders after which time Novartis plans to buy back up to $5 billion in stock. The entity will be listed and have its headquarters in Switzerland. Assuming Novartis gains shareholder approval, the spin-off will be completed in the first half of 2019, with the stock buyback finished by the end of that year.
The move is part of the company’s shift to a focus on prescription drugs driven by its current CEO Vas Narasimhan. The company exited the vaccines, animal health and consumer health businesses over the last several years. "A company like ours needs to focus our capital in our area of strength which I believe is innovating world class medicines and I'd like to build our strength in digital and data technologies," said Narasimhan.
To that end, Novartis recently acquired U.S.-based gene therapy company Avexis for $8.7 billion and French-based radio-pharmaceutical maker Advanced Accelerator Applications (AAA) for $3.9 billion and invested in digital technology, including a mobile app for the collection of eye disease data. Narasimhan plans to make further bolt-on acquisitions in similar areas.