Alcon becomes division of Novartis

Fort Worth, TX-Alcon is now a division of Novartis AG that is headquartered in Fort Worth, TX, following the April 8 completion of a merger agreement between the two companies.

Alcon is now the second largest division of the Novartis Group, with pro-forma sales of more than $9.4 billion in 2010. Alcon alone had sales of about $7.2 billion in 2010. The division operates in 75 countries, sells products in 180 markets, and now employs more than 22,000.

The new Alcon division combines the product portfolios, commercialization capabilities, research and development efforts, and personnel of Alcon, CIBA Vision, and Novartis Ophthalmics. A new commercial model for the division will be implemented in the second half of this year. At that time:

• The surgical business will continue to provide equipment, instruments, disposable products, and IOLs for surgical procedures that address cataracts, vitreoretinal conditions, glaucoma, and refractive errors.

• The pharmaceutical business will combine Alcon’s pharmaceuticals with selected products from Novartis Ophthalmics (excluding ranibizumab injection [Lucentis], which Novartis markets outside the United States). The pharmaceutical business also will oversee the line of over-the-counter brands in artificial tears and ocular vitamins.

• The vision care business will combine the CIBA Vision portfolio of contact lenses and lens care products with Alcon’s contact lens solution portfolio.

“Through this merger, we are forging the strengths of three global leaders into one eye-care business with an unparalleled product portfolio that is uniquely poised to serve our customers by addressing the full life cycle of patient needs across eye diseases, vision conditions, and refractive errors,” said Kevin Buehler, head of Alcon. “Alcon now benefits from increased scale, resources, and growth opportunities to achieve its vision of being the most trusted leader in eye care.”

The Alcon business model will continue with specialized sales forces and marketing personnel in these three eye-care segments. These resources will be organized under one local general management structure in each country. In the short term, customers should expect no change in daily business interactions; ordering, sales force support, and customer service systems will remain in place.

Alcon officials said that the division is planning to spend approximately $4 billion on eye-care research and development over the next 5 years. The division will be able to use the capabilities and resources of the Novartis Institutes for BioMedical Research to accelerate product innovation for the eye.

Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 119,000 full-time equivalent associates and operate in more than 140 countries around the world. In 2010, the group had net sales of $50.6 billion and spent about $9.1 billion in research and development.

Under the terms of the merger, Alcon shareholders will receive 2.9228 Novartis shares or American depositary shares plus a cash payment of $8.20 for each Alcon share.