With a new chairman selected to take the helm of Novartis ($NVS), lots of folks are wondering what is in store for the Swiss drugmaker. Not so fast, CEO Joe Jimenez said this week.
Just because former Chairman Daniel Vasella has left, don't expect the Swiss company to just up and sell its $12 billion stake in Roche ($RHHBY), the accumulation of which was a pet project of Vasella, Reuters reports. And while he was at it, the CEO swatted back talk that Novartis might want to sell its vaccine business, as some observers have suggested.
But of course, that may not all be up to Jimenez. The new chairman is Joerg Reinhardt, who went to Bayer when Novartis picked Jimenez for the CEO job over Reinhardt at Vasella's recommendation. He takes over Aug. 1 when he is released from his contract at Bayer.
Novartis built up its voting stake in Roche between 2001 and 2003, when prices were low and Vasella thought he might be able to mastermind a merger, Reuters points out. When that didn't happen, he kept it as an investment, and as Roche's fortunes have risen on its cancer drug development, so has the value of the stake. Jimenez points out that Novartis couldn't afford to buy that kind of value on the open market now. But shareholders can't help but take a look at that big fat investment and not wish a little of it would be pushed their way. It has been mentioned before, like when Novartis was getting ready to buy Alcon in 2010, but Vasella stood in the way.
Jimenez, who was in Davos, Switzerland, for the World Economic Forum, also dismissed the suggestion that it was a good time for the company to unload its vaccine business and focus more on drug development. He said all of the company's units are functioning well, poised for growth, and he saw no need to make changes. He didn't say whether he had talked it over with Reinhardt.
- read the Reuters story
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