Novartis moves toward sale of $14 billion stake in Roche
- Novartis CEO Joe Jimenez appears willing to sell the company's $14 billion stake in Roche without demanding a premium on the shares' value, Reuters reports.
- Under former Chairman Daniel Vasella, Novartis bought around one-third of Roche's voting stock between 2001 and 2003, with an eye toward a possible merger.
- Now, Novartis is facing several challenges, including a weak launch of its heart-failure drug Entresto and struggling performance at its eye-care unit Alcon. A sale could bring in cash which Novartis could use to fuel new growth.
Jimenez has previously stated he would want a premium on any sale of the Roche sales but that stance seems to have weakened somewhat, perhaps due to new pressures.
Entresto, which was hailed as the next big cardiovascular blockbuster last year when it launched, generated only $17 million in revenues for the first quarter, well off pace to meet its annual target of $200 million. Overall, first quarter income for 2016 was down 13% compared to a year prior.
A number of top executives have also left the company in recent months, headlined by the departure of David Epstein, the veteran head of Novartis Pharmaceuticals. His exit was announced as Novartis said it would split its oncology business from its pharmaceuticals division in a major reorganization aimed at driving growth in each unit.
Novartis did get some good news when several US cardiovascular groups recently recommended Entresto as a first-line treatment in a new version of treatment guidelines. And last week, Novartis’ phase 3 trial of its breast cancer drug ribociclib was stopped early by an independent data monitoring panel due to positive results.