Novartis plans to create a leading eye care device company with Alcon spinoff
Acquiring Alcon in 2011, encompassing surgical, vision care and ophthalmic pharmaceuticals, Novartis has revealed its aim for the 100% spinoff of the division.
With a long-term aim to create a leading eye care device company, the move will enable Novartis and Alcon to focus fully on their respective growth strategies.
Additionally, the business announced its plans to initiate a share buyback of up to $5bn, to be finalised at the end of 2019. This will be largely funded through the proceeds of the divestment to GlaxoSmithKline of the consumer health joint venture stake, net of the AveXis acquisition payments.
Joerg Reinhardt, Chairman of Novartis, said: "Our strategic review examined all options for Alcon ranging from retention, sale, IPO to spinoff. The review concluded that a spinoff would be in the best interests of Novartis shareholders and the Board of Directors intends to seek shareholder approval for a spinoff at the 2019 AGM.
“This transaction would allow our shareholders to benefit from potential future successes of a more focused Novartis and a standalone Alcon, which would become a publicly traded global medtech leader based here in Switzerland."
In January 2016, Novartis transferred Alcon's ophthalmic pharmaceuticals to the its Innovative Medicines Division. The leading ophthalmology pharmaceuticals business will continue to develop as part of Novartis, with 2017 sales of $4.6bn and the potential blockbuster medicine RTH258 (brolucizumab) in development for neovascular AMD and diabetic macular edema.
The Alcon Division is now fully focused on surgical and vision care and continues to be the global leader in eye care devices. The company made $6bn in sales last year, Bloomberg reports.
Vas Narasimhan M.D., CEO of Novartis, said: "Alcon has returned to a position of strength and it is time to give the business more flexibility to pursue its own growth strategy as the world's leading eye care devices company. We will work to ensure a smooth transition for Alcon and Novartis associates while preparing for the launch of RTH258 and building our leading ophthalmology pharmaceuticals business."
Mike Ball will become Chairman-designate of Alcon and will step down from the Executive Committee of Novartis (ECN) on July 1, 2018. David Endicott, Chief Operating Officer of Alcon, will be promoted to CEO of Alcon.
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"The planned spinoff will be key to strengthening our leadership in the large, attractive and growing global eye care devices market,” said Ball.
“I look forward to working closely with David Endicott and the entire team at Alcon to deliver continued innovation for our customers and patients, while creating shareholder value through long-term, sustainable growth."
If the spinoff is completed, it would create a new Switzerland-based company with global scale and reach comprising more than 20,000 employees, with around $7bn in 2017 sales.
In addition to being incorporated in Switzerland, the intention would be to list shares of Alcon on the SIX Swiss Exchange and the New York Stock Exchange.
This year, the company has also launched its FocalView app, an ophthalmic digital research platform, which has been developed with Apple’s ResearchKit.
The app aims to allow researchers to track disease progression by collecting real-time, self-reported data directly from consenting patients, leading to a more nuanced understanding of ophthalmic diseases and accelerating the development of novel treatments.
"FocalView has the potential to offer tremendous benefit for the ophthalmic community and for researchers looking to develop better treatments for these patients," Dr Mark Bullimore, Medical Advisor for the creation of FocalView and Dean of the Southern California College of Optometry, Marshall B. Ketchum University explained.
"This kind of data is fast becoming a critical element of research and development, because it offers a better reflection of real-world patient experiences, fosters better patient compliance and provides researchers with richer and more accurate data points."
"Optimising digital technology in research and development, particularly in ophthalmic disease, could have a marked impact on the quality of the data we capture," added Bertrand Bodson, Novartis Chief Digital Officer.
5 mins with... Johannes Bhakdi, Quantgene
Quantgene is a US biotech company that uses AI and the cloud to do genomic testing. It was founded in 2015 to focus on cancer - integrating advanced genomics and molecular diagnostics systems with the cloud and AI systems.
CEO Johannes Bhakdi tells us Quantgene is the first COVID-19 testing company to fully integrate variant identification - we find out more.
Given the new Delta and Lambda variants, is the coronavirus mutating at a faster rate than most viruses?
The reason SARS-COV2 is mutating on a perceived higher rate is not that the individual viruses mutate at a higher rate, but that the base population infected with the virus is vastly higher. The absolute rate of global mutations is a direct function of how many people have the virus at any given point in time. Since this is a global pandemic, and tens of millions have been infected, we see more mutations.
That makes it more unpredictable, because any single mutation that has an evolutionary advantage - like the Delta variant - can then take over and spread even faster.
What is the usual process for testing and analysing viral mutations?
The most effective tool for analysing mutations is Whole Viral Genome sequencing. It allows you to read out the entire genome of the virus. Once the wet-lab sequencing is complete, we use this information to map it against what is called a "reference genome", meaning the classic SARS-COV2 genome. This allows us to then see any differences between the investigated sample and the baseline genome of SARS COV2.
We then use these differences to map them against a database of known mutations, like the Delta variant. That way we can see if we are dealing with any known variant, and if we have a new variant at our hands, as well as determine what this new variant does to the spike protein and how likely it is to be a problem with antigens and vaccines, based on the changed protein structure. This last step is not easy and not clear-cut, and there is some speculation into the determination of how problematic the mutated proteins are.
What does Quantgene do differently?
At Quantgene, we are focusing on solving problems for our clients - may it be employers, movie productions or governments. That means we ensure that our client gets the COVID protection they need in the fastest possible time frame and at the highest precision possible - mostly at or below market prices.
We are bringing together technologies like RT-PCR testing and mutation profiling/sequencing, as well as advanced bioinformatics and computational resources to ensure high-quality results are being delivered seamlessly.
We are also adding important components such as real-time cloud software and medical services to it. Simply put, we turn the COVID problem into a one-click seamless solution that works better than others, so companies and government clients don't have to deal with laboratories, medical or software providers who point fingers at each other and fail to deliver in time and with high precision. COVID is too dangerous and important to risk falling short.