Issue Date: September 19, 2011
Novartis Unveils Growth Strategy
Novartis has joined the ranks of other large pharmaceutical firms, such as Sanofi, in recently announcing growth and cost-saving plans. The Swiss drug firm also is integrating the eye care business of Alcon, which it acquired in April. Although CEO Joseph Jimenez says the Alcon purchase targeted long-term growth and not just cost synergies, Novartis anticipates seeing an extra $350 million in savings by 2013. In the first half of 2011, productivity improvements have already yielded more than $1.2 billion in savings, and the year-end total is expected to exceed the $1.9 billion achieved in 2010. Novartis has or will divest, halt, or reduce operations at 10 manufacturing sites. Growth is expected to come from new product sales that will help offset sales lost when patents expire. So far this year, Novartis has gotten six drugs approved and has filed for another eight, while Alcon has had 11 key approvals. According to Novartis, its diversified portfolio and geographic reach should protect against macroeconomic factors and contribute to high-single- to low-double-digit sales growth.
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