ZURICH — Novartis on Tuesday made a number of moves that have fundamentally reshaped its business, according to published reports. Novartis exchanged its vaccine business with GlaxoSmithKline in a deal valued at $7.1 billion for GSK's oncology portfolio (at a cost of $14.5 billion) and divested its animal health unit to Ely Lilly for approximately $5.4 billion.
As part of its deal with GSK, Novartis and GSK have created a joint venture with GSK in consumer healthcare. GSK will take the lead in running a future consumer health business worth about $10 billion in annual revenue with Novartis, Reuters reported. Meanwhile, Eli Lilly will have the No. 2 animal health business by revenue worldwide.
The moves make Novartis a significant supplier of high-margin cancer medicines (No. 2 behind Roche), while GSK becomes a vaccine powerhouse.
"The global pharmaceuticals sector has seen a flurry of deal-making recently as large companies seek to focus on a small number of leading businesses, while smaller specialty and generic producers seek greater scale," Reuters reported.
Novartis reported it would start a separate sale process for its flu business, which was not part of the deal with GSK.