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Novartis CEO Joseph Jimenez discusses Alcon merger

How will the merger with Alcon make Novartis stronger?

Today marks a transformational moment for Novartis. Completion of the merger with Alcon makes us the global leader in eye care and increases the breadth of our healthcare portfolio.

Joseph Jimenez

Joseph Jimenez, Chief Executive Officer of Novartis

The aging of the world’s population is linked to an increase in eye disease – currently, more than 160 million people are affected by blindness and preventable eye disease around the world. We have a great opportunity to redefine and shape the eye care industry, with the ultimate goal of preventing blindness and treating diseases and disorders of the eye. As the second-largest business in the Novartis portfolio, the new Alcon Division has significant scale, and it also has the resources to take advantage of these growth opportunities.

As previously announced, Alcon will be led by Kevin Buehler and will include the current Alcon business, CIBA Vision, and selected ophthalmic medicines from the Novartis Pharmaceuticals Division. Since December, the integration planning teams have been working diligently and with the merger complete, we will now move quickly to fully integrate Alcon into Novartis in the coming months.

With the completion of the merger, we will also move forward to implement our new divisional structure based on high-growth segments of healthcare: Pharmaceuticals, Alcon, Sandoz, OTC, Vaccines and Diagnostics, and Animal Health. The OTC and Animal Health businesses will now report directly to me, which will help us speed and simplify decision making.

You have said that Novartis will continue to grow in the next five years, in spite of loss of patent protection on major prescription medicines. How will Alcon help Novartis achieve that objective?

Alcon holds strong global positions in fast-growing areas of eye care – from treatments for glaucoma, the largest single category in eye care, to advanced technology intraocular lenses that enable surgeons to correct for disorders such as presbyopia and astigmatism simultaneously with cataract surgery. Sales of glaucoma medicines and advanced technology intraocular lenses increased at double-digit rates in 2010 and Alcon also achieved double-digit sales growth in 2010 for laser-based technologies for refractory surgery. We expect dynamic growth in each of these market segments to continue in coming years.

I believe strongly in our division structure because, in the history of Novartis, whenever we have put a great management team in charge of a focused business and turned them loose, growth has materialized.

Each of our divisions has a strategic plan that challenges management to improve performance and create greater value. You can see from Alcon’s current position that its financial performance is already impressive. We plan to grow the business aggressively in international markets outside the United States and increase overall asset efficiency to increase its return. It will be challenge – but a challenge I welcome.