Novartis India rallies over 2% on three way deal with GlaxoSmithKline

NEW DELHI: Novartis India Ltd rallied as much as 2.5 per cent in trade on Wednesday, after global pharmaceutical giants GlaxoSmithKline and Novartis announced a massive three-way deal that will see the rivals exchanging asset portfolios, and merging the consumer health businesses in a new joint venture.

GSK will sell its portfolio of cancer drugs to Novartis for $14.5 billion, plus another $1.5 billion, depending on trials in progress, ET reported. As per the report, Novartis in turn, sells its vaccines portfolio, except flu, to GSK for $5.25 billion.

Separately, Novartis also sold its animal health business to the American Eli Lilly for $5.4 billion, which will make Eli Lilly world number 2 in animal health.

As per the ET report, GSK and Novartis will pool their assets in consumer health with a new JV, with pro-forma combined turnover of $6.5 billion, in which GSK will have majority control with 63.5 per cent.

The mega deal comes even as global pharma majors are struggling with low growth, and streamlining their operations as governments cut down on health spending.

GSK is not a world leader in oncology, and analysts said it made sense for the company to exit the highly competitive cancer arena. Novartis hopes to benefit from exiting low-margin vaccine business for high margin cancer drugs, added the ET report.