(24th Apr, 2014); Now Novartis will focus more on oncology business, GlaxoSmithKline will focus on vaccines business and Lilly to concentrate more on Animal Health Division, concluded from portfolio transformation deals between said companies.
Novartis announced on last Tuesday that they went for definitive agreement with GlaxoSmithKline to exchange certain strength, constructing global leadership in major segments. Novartis would nourish its innovative pharma business by earning oncology products from GlaxoSmithKline for 14.5 billion USD and up to 1.5 billion USD contingent on a development milestone and GlaxoSmithKline will acquire Novartis’ global Vaccines business (excluding influenza vaccines) for USD 7.1 billion plus royalties which includes initial cash consideration of $5.25 billion with subsequent potential milestone payments of up to $1.8 billion and ongoing royalties.
In a separate transaction, Lilly acquire Novartis Animal Health for approximately 5.4 billion USD which will strengthen and diversify Lilly's own animal health business, Elanco. Upon completion of the acquisition, Elanco will be the second-largest animal health company in terms of global revenue, will solidify its number two ranking in the U.S., and improve its position in Europe and the rest of the world.
Joseph Jimenez, CEO of Novartis said, "The transactions mark a transformational moment for Novartis. They focus the company on leading businesses with innovation power and global scale. They also improve our financial strength, and are expected to add to our growth rates and margins immediately. We have also created a world-leading consumer healthcare business in our joint venture with GlaxoSmithKline. We believe the divestment of our smaller Vaccines and Animal Health Divisions will enable us to realize immediate value from these businesses for our shareholders, and those divisions will benefit from being part of large, global businesses that are also leaders in their segments. Patients will benefit from even higher levels of innovation that this focus may afford. Looking ahead, this positions Novartis well for future healthcare industry dynamics."
On this ocassion, Sir Andrew Witty, Chief Executive Officer, GlaxoSmithKline said, "The acquisition of Novartis’ Vaccines business will significantly enhance the breadth of our vaccines portfolio and pipeline, notably in meningitis, with the addition of Bexsero, an exciting new vaccine for prevention of meningitis B. The acquisition will also strengthen our manufacturing network and reduce supply costs."
Experts are saying that these deals may not have hard impact on Indian pharmaceutical business. But these deals will surely change market proposition and clarify research as well as business oriented targeting of above companies.
