Novartis Announces "Brutal" Alcon Restructuring

Jan 27, 2016

Financial Times

Novartis released its annual report announcing strong sales growth in 2015 despite a 13 percent decrease in sales from its eyecare business. The company announced its plans to accelerate growth at Alcon and streamline group operations.

Alcon ophthalmic pharmaceuticals business will move to the Pharmaceuticals Division, combining Alcon's brand with Pharmaceuticals strengths in development and marketing. Novartis also announced some leadership changes including a new division head and CEO of Alcon, Mike Ball, as of Feb. 1, 2016. Ball was formerly CEO of Hospira.

According to a Financial Times article, Novartis has set a deadline to grow its eyecare business by the end of 2016. “We are focused on executing that turnaround plan,” said Joe Jimenez, Novartis CEO. “We haven’t thought what happens if it fails because we believe we can do this. If we get to the end of the year [without a return to growth] then we have to ask a harder question.”

The Financial Times article also quoted Andrew Baum, analyst at Citigroup, who described this as a “brutal” reorganization but welcomed it as good news for investors, along with a group-wide cost-cutting plan aimed at saving $1bn a year by 2020.

Read the full Financial Times article (subscription required)

Read the Novartis annual report

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