No­var­tis to spin off Al­con eye care unit, buy back $5B in stock; Ri­val CAR-Ts from No­var­tis and Gilead get thumbs up in Eu­rope

→ Hav­ing mulled over it for more than a year, No­var­tis $NVS is fi­nal­ly spin­ning off Al­con, the eye care unit that for­mer CEO Daniel Vasel­la pur­chased for a to­tal of $51.6 bil­lion. His tenure marked an era when phar­ma­ceu­ti­cal com­pa­nies were try­ing to di­ver­si­fy their busi­ness in face of gener­ic com­pe­ti­tion to brand­ed drugs. But No­var­tis is a dif­fer­ent com­pa­ny now, led by for­mer R&D chief Vas Narasimhan, who told Bloomberg of the de­ci­sion: “We want to be able to fo­cus our cap­i­tal al­lo­ca­tion to our core, and we be­lieve our core is go­ing to be nov­el plat­forms to de­vel­op in­no­v­a­tive med­i­cines and to in­vest in da­ta and dig­i­tal tech­nolo­gies.” The move, which fol­lows Narasimhan’s de­ci­sion to sell No­var­tis’ stake in a con­sumer health­care joint ven­ture to part­ner GSK for $13 bil­lion, comes at a time Al­con — long con­sid­ered an un­der­per­former — is bounc­ing back on rev­enue. That might help with the val­u­a­tion, which ex-CEO Joe Jimenez said could range from $25 bil­lion to $35 bil­lion. Cur­rent Al­con CEO Mike Ball will be­come chair­man af­ter the spin­off, with COO David En­di­cott slat­ed to be­come the new chief — as­sum­ing the mo­tion goes through at No­var­tis’ an­nu­al gen­er­al meet­ing next year. Af­ter the spin-off wraps up in the first half of 2019, No­var­tis is plan­ning to buy back up to $5 bil­lion in stock.

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