by Burke Speaker | April 22, 2014 10:43 am
Pharmaceutical company Novartis (NVS) has announced a business model change regarding multibillion-dollar deals with GlaxoSmithKline (GSK) and Eli Lilly & Co (LLY).
The partnerships work to assist each company as the industry rapidly looks to mergers and deals as a way to boost business strength in the pharmaceutical arena.
Via the Washington Post:
Joseph Jimenez, the CEO of Basel, Switzerland-based Novartis, said the deals with GSK and Eli Lilly reflect “a very dynamic health care environment” and would reduce overall sales at Novartis but boost its profit margins. He told reporters some 15,000 of its employees globally will be affected by the changes but that no one will be fired by Novartis— all employees whose units are being sold off will be transferred to the new owners.
“The transactions mark a transformational moment for Novartis,” Jimenez told the paper. “They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”
The move helps all companies involved gain a stronger edge in their sectors — something the industry is edging toward.
Some of the highlights of the deal:
Via the Post:
The pharmaceutical industry is in state of flux as firms look to continue the growth investors have got used to at a time when many blockbuster drugs that routinely generated billions of dollars in annual revenue have gone off-patent, said Steve Brozak, who follows health care industries as president of WBB Securities.
NVS stock is up 1.29% on the news — and up 7% year to date.
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