JUN 29, 2018
By Keng Jin Lee
Novartis has announced plans to spin off Alcon into a separately traded, stand-alone company.
If shareholders approve the move, Novartis will continue to operate the ophthalmic drug business while Alcon will focus on surgical and vision care. The move, expected to close in early 2019, will leave Novartis entirely as a prescription-medicine company.
The split will enable both companies to “focus fully on their respective growth strategies,” according to a Novartis press release.
In a call with reporters, Novartis’ CEO Vas Narasimhan, MD, explained his decision to spinoff Alcon. In a rapidly-evolving technological landscape, Narasimhan said, Novartis needs to concentrate its capital on the use of digital technology.
After struggling with flat sales for several years, Alcon was reorganized in January 2016 and put under strategic review a year later. The division has recently shown signs of a turnaround, however.
“Alcon has returned to a position of strength and it is time to give the business more flexibility to pursue its own growth strategy,” said Narasimhan, a Harvard-trained doctor who assumed the role of Novartis’ CEO earlier this year.
Mike Ball will become chairman-designate of Alcon, tasked with prepping the company for the split. Alcon COO David Endicott will be promoted to Alcon CEO. Both appointments are effective July 1.