desk
Share
News Topical, Digital Desk : World's leading pharmaceutical company Novartis is constantly on the lookout for merger and acquisition deals. the pharma giant's CEO Vasant Narasimhan said that work never ends for Novartis when it comes to big M&A deals as the company always has to look for its next "investable asset". To mitigate the impact of increasing competition from generic drugs, Novartis is continuously on a buying spree and has acquired more than 35 companies in the last one year. The Swiss pharmaceutical company announced its biggest deal in a decade on Sunday, in which it agreed to buy American biotechnology company Avidity Biosciences for about $12 billion.
Eyeing Growth Through Acquisitions
The recent deal will give Novartis access to Avidity's vast and promising pipeline of experimental drugs. The company says that two of Avidity's three key drugs, expected to hit the market before 2030, have the potential to generate billions of dollars in sales. Speaking to CNBC, Narasimhan said, "We are driven by science and technology, and this deal was a perfect fit for us... If you look at our free cash flow, it's around $20 billion annually, so we have sufficient financial capacity to pursue such deals and support the company's growth."
How was the quarter's performance? Novartis reported a 7% increase in sales on a constant currency basis in the third quarter, reaching $13.9 billion. However, the company continues to grapple with increasing competition for some key drugs. The company's net profit rose 25% year-over-year to $3.9 billion, compared to market expectations of $4.4 billion. Novartis shares fell 3.4% at the start of trading on Tuesday, although the stock has risen nearly 17% since the beginning of the year—far outpacing the Swiss market index's 8% rise. Novartis has raised its guidance for 10 consecutive quarters, including twice this year. The market expected the company to raise its forecast this time as well, but Novartis kept its guidance steady. In September, Novartis pledged to work toward eliminating the drug price gap between the US and other developed countries.
--Advertisement--
