Stronger together: Novartis and Alcon creating the global leader in eye care
April 08, 2011
Following approval by Alcon and Novartis shareholders at meetings on April 7 and 8, respectively, the final conditions for the merger have been satisfied.
On Day One, Monday, April 11, Novartis and Alcon will shift gears – from months of meticulous planning to building the global leader in eye care and fifth strategic growth platform for Novartis.
The new division, to be called Alcon, will be the second biggest within Novartis, after Pharmaceuticals. Kevin Buehler, former chief executive officer of Alcon, will head the new division, reporting to Novartis Chief Executive Joseph Jimenez.
“Novartis strategy is based on high-growth, science-based segments of healthcare, and Alcon is a great fit with our portfolio,” Mr. Jimenez says.
“Together, Novartis and Alcon will hold competitive positions in highly complementary product areas and create an even stronger global leader in the dynamic eye care sector. And in eye care, just as in other Novartis growth platforms, innovation is fundamental to success. Access to ophthalmology research programs at the Novartis Institutes for BioMedical Research will provide a powerful drug discovery engine for the new division.”
“Novartis strategy is based on high-growth, science-based segments of healthcare, and Alcon is a great fit with our portfolio.”
- Joseph Jimenez, Chief Executive Officer of Novartis
When the division’s new commercial model is implemented in the second half of 2011, Alcon will comprise three businesses:
- The Surgical business accounts for USD 3.2 billion of the new division’s pro forma annual sales, based on Alcon’s global leadership in ophthalmic surgery and implanted intraocular lenses.
- The Pharmaceuticals business represents about USD 3.5 billion of pro forma sales. A broad portfolio of ophthalmic medicines from Alcon will be augmented by the addition of Novartis drugs used to treat eye diseases and vision conditions and the Pharmaceuticals business will also oversee the line of professionally driven
over-the-counter brands in artificial tears and ocular vitamins.
- Finally, Vision Care provides USD 2.7 billion of the division’s pro forma annual sales. Contact lenses come from CIBA Vision, a Novartis business unit that has been the world’s second-biggest manufacturer of contact lenses, while Alcon’s consumer eye care products include OPTI-FREE, the leading global lens care brand.
In 2010, Alcon sales rose 9.2% in constant currency, driven by dynamic growth of medicines for treatment of glaucoma as well as advanced technology intraocular lenses used in cataract surgery. Alcon offers eye care professionals the most comprehensive portfolio of treatments to lower intraocular pressure stemming from glaucoma; worldwide sales of Alcon’s glaucoma franchise climbed 13.1% in 2010.
“Through this merger, we are forging the strengths of Alcon, CIBA Vision and Novartis Ophthalmics into one eye care business that is poised to serve our customers with an unparalleled product portfolio,” Mr. Buehler says. “Alcon now benefits from increased scale, resources and growth opportunities to achieve its vision of being the most trusted leader in eye care.”
Alcon also is recognized as the world leader in ophthalmic surgery and the latest advancements in this platform are intraocular lenses that simultaneously correct for presbyopia, which affects all cataract patients, and astigmatism, which affects about one-third of these patients. Alcon has established the leading market position in each category, enabling surgeons to deliver greater visual function and improve lifestyle freedom for patients. Global sales of AcrySof advanced technology intraocular lenses surged 19.7% in 2010.
The CIBA Vision business unit posted 6.4% sales growth in constant currencies in 2010, double the overall market segment growth for the year. That robust performance reflected the strength of the AirOptix and DAILIES brands. ClearCare, CIBA Vision’s leading lens disinfectant solution, experienced its third year of double-digit growth.
The diversified portfolio will allow the new Alcon Division to respond to changes occurring within eye care. “We have a blend of differentiated pharmaceutical products, which contrasts with surgical devices and intraocular lenses that have a different reimbursement structure – as well as a lower risk profile in research and development. Vision Care in many countries is a patient-pay segment, yet one that is heavily driven by eye care practitioners,” Mr. Buehler adds.
“While the mix of our products in Pharmaceuticals and Surgical tends to tilt toward the aging patient, contact lenses and lens care cover the full spectrum from kids to teens to adult presbyopes in middle age. Overall, it’s a very nice offset: one business might be challenged by market conditions at any given time but another might do quite well. It gives us diversity and balance for long-term growth.”