BASEL, Switzerland, April 22 (UPI) -- Novartis announced a major overhaul of its operations, including buying Glaxo's cancer drugs and a joint venture in the consumer health care sector.
The deals announced Tuesday come as the pharmaceutical industry is seeing an eye-opening number of transactions in the last few months, with more expected.
Novartis will buy its British rival GlaxoSmithKline's cancer drug business for $16 billion and will trade its vaccine business for $7.1 billion. The big announcement was the combining of Novartis' over-the-counter pharmaceutical business with GlaxoSmithKline’s consumer drug business.
The new joint venture would be the largest companies in in the consumer health care sector. Products would include Novartis' Excedrin pain reliever and Maalox antacid, and GlaxoSmithKline’s Aquafresh toothpaste and Nicorette chewing gum.
Novartis will also sell its animal-health unit to Eli Lilly and Company for $5.4 billion, and said that it was putting its flu vaccine business up for sale.
Novartis has faced increasing pressure from investors to reduce strain on the company by exiting its less profitable businesses. This is the biggest shakeup since CEO Joe Jimenez took over in February 2010.
“This is about getting us into fighting shape for the next 10 years,” Jimenez told the New York Times.
Jimenez said that in the coming years healthcare systems will be under tremendous pressure, as the number of elderly grows and those who cannot pay for healthcare also grow.
Pharmaceutical companies across the globe “are looking at their portfolios,” he said, “and they’re asking, ‘How can I be a winner in this industry?’ The winners will be the ones who can innovate, who have global scale.”
[The New York Times]