The top executive at Novartis pointed to early signs of a revival at its Fort Worth-based Alcon eye-care division, which will strengthen his hand as he considers an exit from the ailing business.
Alcon’s revenue in 2017 will likely grow by a low “single-digit” percent, the Swiss company said in a statement on Tuesday. That’s a change from April, when the company had said the unit’s sales may be unchanged from the prior year or expand slightly. During the second quarter, sales for the business expanded 1 percent.
The turnaround at Alcon will “improve the options we have available to us,” Chief Executive Officer Joe Jimenez said in a Bloomberg Television interview. In January, Novartis said that it was reviewing all options including a spinoff or initial public offering for the division, and would provide an update by the end of the year.
“If we were to do a capital markets exit, we’d want to see a number of quarters of consecutive growth,” Jimenez said in the interview. “Hopefully we can continue this momentum and drive additional growth in the back half of 2017 and into 2018.”
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Alcon, which makes surgical equipment and contact lenses, employs about 4,000 workers at its campus near I-35 and I-20 in south Fort Worth. The company’s pharmaceutical business was integrated into another Novartis division last year when Mike Ball was brought in to replace Jeff George as CEO.
“After a long period of retrenchment and heavy investment, Alcon has finally delivered a quarter with clear sales growth in its two main subdivisions,” Alistair Campbell, an analyst at Berenberg Bank, said in a note to clients.
Jimenez told investors in October 2015 that Novartis was doing a “deep analysis” of Alcon and that he hoped to come up with a plan to get the unit “back to a decent growth rate.” The company has acknowledged that the turnaround, which Jimenez had hoped to see in 2016, has taken longer.
Novartis on Tuesday posted a smaller decline in second-quarter earnings than analysts had projected as newer medicines helped offset the eroding sales of its biggest drug. Profit dropped to $1.22 a share, beating analysts’ estimates of $1.18.
Revenue in the latest quarter slumped 2 percent to $12.2 billion, matching analysts’ projections. The drugmaker’s Sandoz generics unit posted a 5 percent decline in sales as U.S. prices continued to plummet.
This article includes material from Star-Telegram archives.