Novartis has decided not to sell its roughly $14 billion (10.61 billion pounds), 33 percent voting stake in Roche following a review, Chairman Joerg Reinhardt said in an interview published on Wednesday in Swiss newspaper HandelsZeitung.
“We said we would review whether it makes sense to sell the stake,” Reinhardt told the newspaper.
“We came to the conclusion that that’s not the case. We have made no decision to actively move ahead with the sale.”
In May 2016, Chief Executive Officer Joe Jimenez said he was ready to sell the Roche stake without demanding a premium and that Novartis has been discussing options with banks.
Novartis amassed the Roche holding, which produced $464 million in income for Novartis in 2016, under former Chairman Daniel Vasella more than a decade ago, part of unrequited advances for a merger of the Basel drug giants.
Reinhardt, who re-joined Novartis as chairman in 2013 after a stint at Germany’s Bayer, also said in the interview that sales are now recovering at the Swiss drugmaker’s troubled Alcon eye care unit.
Although Novartis has said all options are on the table for Alcon, Reinhardt said intense interest over a final decision on a review of the business is disproportionately high, especially given it now makes up little more than 10 percent of Novartis’ $48 billion annual sales.
Jimenez has suggested Alcon could be worth $25-35 billion.
Despite U.S. price pressure on generics unit Sandoz, Reinhardt said he believes synergies between its difficult-to-make generic drugs and the division’s growing portfolio of biosimilar copies of name-brand biological drugs like Roche’s Mabthera have not yet been exhausted.
“When you take that into consideration, Sandoz belongs to our core business,” Reinhardt told the newspaper.
By John Miller
Source: Reuters
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
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