Wednesday, September 14, 2011

Le Cut du Jour - Novartis Aims to Beat $1.9B in Cost Savings By Year's End


Novartis (NYSE: NVS  )  has two things to say. It now expects more bang for its buck from Alcon. The eye-care acquisition, which cost Novartis $51 billion, will deliver high single-digit to low double-digit sales growth, plus $350 million in cost savings by 2013, the company says. And it's looking to surpass last year's $1.9 billion in savings by the end of 2011; it's already racked up $1.2 billion in cost cuts so far this year.
Previously, the Swiss drugmaker had forecast $300 million in savings from the integration of Alcon. And the eye company's sales have traditionally grown by 7% to 9% per year, while Novartis' Ciba Vision eye-care unit typically posted lower growth than that, Reuters notes.
"[The Alcon] transaction was about long-term growth and not just cost synergies," CEO Joe Jimenez said in a statement. "We believe that Alcon has significant growth potential by leveraging the Novartis expertise in research, market access, and reimbursement, among others."

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