Novartis willing to sell Roche stake without demanding premium - CEO

Wed May 25, 2016 5:43am EDT
 
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ZURICH (Reuters) - Swiss drugmaker Novartis (NOVN.S: Quote) is ready to sell its near $14 billion stake in rival Roche (ROG.S: Quote) without demanding a premium, Chief Executive Joe Jimenez said on Wednesday.

Novartis has been discussing options with banks for selling its Roche shares worth about 13.70 billion Swiss francs ($13.81 billion), potentially providing cash for new deals, sources familiar with the situation told Reuters last month.

It built up its one-third stake in Roche voting stock between 2001 and 2003 under former Chairman Daniel Vasella for a possible merger that never happened.

In the past, Jiminez has said he would want a premium price for the Roche stake, reflecting the difficulty of recreating such a large position in the open market. But on Wednesday, he said that is no longer a dealbreaker.

"We would now think through that, and would potentially make a decision to exit without a premium, if the opportunity were right," Jimenez told investors at an event in Basel.

Pushing ahead with a sale now could make sense for Jimenez, who has been under pressure to improve growth after difficulties with the company's eyecare unit Alcon and new heart drug Entresto.

But after winning a favorable industry recommendation for Entresto last week, it said on Wednesday it remains confident annual sales will peak at around $5 billion, despite first-quarter sales of $17 million.

It stuck to its 2016 forecast for Entresto of $200 million in revenue.

Last week it split its main drugs division into two units, one for cancer, the other focusing on the rest of Novartis' drug portfolio. Seven top executives have left this year, including drugs chief David Epstein last week.   Continued...

 
The logo of Swiss drugmaker Novartis is seen at its headquarters in Basel, Switzerland October 22, 2013. REUTERS/Arnd Wiegmann/File Photo