Swiss pharmaceutical giant Novartis AG (NYSE: NVS) is reportedly considering the sale of certain ‘non-core’ business units, according to unnamed insider sources cited by Bloomberg. The move aims to raise funds to support further innovation in core areas. The company is said to be evaluating its options for its respiratory and ophthalmology businesses.
Spin-Off of Sandoz
The news comes as Novartis is preparing to spin off its generics arm Sandoz as a standalone company, scheduled for the second half of 2023. According to the sources, any further divestment of business units is unlikely to occur until after the Sandoz restructuring is completed.
History of Restructuring
Novartis has a history of restructuring and spinning out non-core units. In 2019, the company allowed its specialist ophthalmic subsidiary Alcon to spin out independently. The remaining ophthalmic business, focused on diseases such as glaucoma and age-related macular degeneration, could be worth up to USD 5 billion, according to the sources. Novartis’s respiratory unit, meanwhile, focuses on diseases such as chronic obstructive pulmonary disorder (COPD) and asthma.
Future Implications
The potential sale of these non-core units underscores Novartis’s strategy to streamline its operations and concentrate resources on core therapeutic areas. This move is expected to support the company’s ongoing efforts to drive innovation and enhance its competitive position in the global pharmaceutical market. As of yet, there has been no official response from Novartis regarding the recent reports.-Fineline Info & Tech
