Novartis more and more likely to create a spin-off of Alcon worth $25bn to $35bn

Novartis today reported its third trimester financial results, and on the occasion it announced it plans to create a spin-off of its asset Alcon, worth over $25bn. The value is far below the price Sanofi paid in 2010, as it acquired Alcon from Nestle for $50bn. Indeed, the company has reportedly analyzed all the viable options for Alcon and found that creating a new company is the best option, since it ensures shareholders the best financial return. The final decision, however, will be taken in 2019. In the third quarter Novartis delivered sales of $12.4bn (+2%), slightly exceeding analysts’ expectations, also thanks to the good performances by Cosentyx (psoriasis) and Entresto. The Alcon asset reported sales of $1.5bn, that is 7% better than Q3 2016, yet it also generated $50m in losses. The same Sandoz, producing and commercializing generics, reported losses, due to the hard market conditions that all generic drugs manufacturers are experiencing. Novartis’ shares lost almost 3% (Zurich). (Source: Novartis)