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Novartis, GSK and Eli Lilly Agree Multi-Billion Dollar Restructuring DealsNovartis and GlaxoSmithKline (GSK) have announced restructuring deals worth billions of dollars, as they aim to concentrate on specialist areas of their business going forward.

Within the agreement, GSK will sell their cancer portfolio to Novartis for $14.5 billion upfront and $1.5 billion in milestones, whilst Novartis will sell their vaccines unit to GSK for $5.25 billion upfront and $1.8 billion in milestones.  The sale of Novartis’ vaccines unit will exclude flu jabs, which the pharmaceutical company will be selling separately.

Novartis OTC and GSK Consumer Healthcare will also form a new consumer healthcare joint venture.  Novartis will have a 36.5% share of the venture, whilst GSK will have the remaining 63.5%.  The joint venture currently has combined annual revenues of about £6.5bn, and leading positions in Oral Health, Wellness, Nutrition and Skin Health.

In a separate deal, Novartis has also announced that they are selling their Animal Health unit to Eli Lilly for $5.4 billion.

Novartis have confirmed that the acquisition of GSK’s oncology portfolio will help reinforce and expand their oncology business, particularly in targeted therapies and small molecules.

The agreements will leave GlaxoSmithKline specialising in four main areas: respiratory conditions; vaccines; HIV; and consumer healthcare, whilst reducing their dependence on high-risk drug development.

GSK confirmed that the deals are predicted to increase their annual revenues by £1.3 billion to £26.9 billion.

Investors have welcomed the restructuring and selling of areas of their portfolio, with GSK’s shares increasing by over five per cent, and Novartis’ shares increasing by over two per cent.

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