Novartis selling French Alcon plant to Recipharm

Novartis ($NVS) will shed another manufacturing unit as it continues its efforts to improve earnings by getting more efficient. This time, it will sell an Alcon unit to Swedish contract manufacturer Recipharm but has swung a deal to buy and continue to market the eye meds made there.

Recipharm announced today that is buying Kaysersberg Pharmaceuticals, from Novartis' Alcon unit, for €18 million ($19.7 million). With the deal, Recipharm gets a manufacturing plant in Kaysersberg, France, with a line of products that it will supply to Novartis through a long-term manufacturing agreement. It said the products will add about €36 million ($39.4 million) in sales for the company.

As part of the deal, which is set to close by year end, Recipharm will take on the 260 employees at the plant but said the facility may "provide synergy with Recipharm's three other French facilities." Recipharm said the Kaysersberg plant also has blow-fill-seal capabilities, adding a new niche for the contractor.

"Blow-fill-seal technology is a very interesting area which we believe will grow and it therefore forms an important addition to our portfolio," Recipharm CEO Thomas Eldered said in a statement.

The acquisition of Kaysersberg Pharmaceuticals continues a buying spree for the Swedish company that has been picking up specialized assets around the world. It recently announced it was paying about $105.2 million to buy a 74% stake in Nitin Lifesciences, an Indian sterile injectables CMO.

For Novartis, it is another step toward better margins. Besides selling its animal health unit to Eli Lilly ($LLY) last year and trading off and selling its vaccine business, the Swiss drugmaker has shed a number of individual manufacturing facilities. Last year it closed a Ciba Vision plant in Canada, laying off about 300 employees. This year its Sandoz unit said it was closing two plants in Germany and one in India, whacking about 770 jobs in the process.

- here's the announcement (PDF)

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