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news.Swiss pharma giant Novartis has said that it is considering options including an IPO or spin-off of its eye care division.
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The options range from retaining the business to separation through a capital markets transaction in order to identify how to best maximize value for the company’s shareholders.
Alcon is engaged in the discovery and manufacturing of ophthalmic pharmaceutical, surgical, and vision care products.
Novartis’ profit for the fourth quarter ended 31 December 2016 dropped 11% to $936m, or $1.12 a share, from $1.05bn, $1.14 a share, for the same period in 2015.
Net sales dropped 2% to $12.32bn and operating income fell 5% to $1.45bn for the quarter.
At Alcon, sales declined 3% to $5.81bn in 2016 as revenue from surgical equipment fell, while core operating income plummeted 31% to $850m.
Vision care sales were flat, with growth in contact lenses offsetting a drop in contact lens care.
Novartis said sales may remain mostly flat or grow by a low single digit percent this year. The company said it will also buy back up to $5bn worth of shares over the next 12 months
The company said it will carry out the review during the course of this year in a way such that Alcon division associates can fully focus on the unit's return to growth.
The Alcon division, has over 25,000 associates in 75 countries, comprises surgical and vision care businesses.
Novartis is identifying whether there are additional value-maximizing opportunities for the Alcon division as an independent company or otherwise.
Image: View of the Forum, Novartis HQ. Photo: courtesy of Novartis AG.