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Novartis CEO shopping for bolt-on deals at $4B, tops

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Novartis CEO Joe Jimenez--courtesy of Novartis.

Yesterday, analysts predicted that 2013 would be the year Big Pharma would take bigger bites from the M&A apple. But don't count Novartis ($NVS) among the crowd willing to pay $10 billion or more for the right company. CEO Joe Jimenez says his appetite is limited to $4 billion at most.

At the J.P. Morgan Healthcare Conference, Jimenez told Bloomberg that Novartis may make some deals. But if a megamerger is the entree and a $10 billion deal the soup course, then Novartis plans to fill up on hors d'oeuvres. "I don't think we need a big acquisition in the short term," Jimenez told the news service. "You may see us do more bolt-ons ... between $2 billion and $4 billion, not more than that."

Just what type of canapes might Novartis be interested in? Generics companies strong in respiratory and dermatology products, for two. Those with a line-up of injectable cancer drugs, for another. In other words, deals similar to those the Swiss drugmaker has made in the recent past. Think Fougera Pharmaceuticals, the dermatology specialist Novartis picked up for $1.5 billion, Bloomberg notes.

After all, Novartis is still $15 billion in debt from its Alcon buyout--a deal that appears particularly prescient, now that its Big Pharma rivals are circling around Bausch + Lomb. That, of course, was a diversification move, designed to help Novartis weather its patent cliff, including the loss of exclusivity on its blood pressure drug Diovan. And Jimenez isn't about to give up its other diverse units--including animal health and consumer health. Not even the money-losing vaccines business. "[P]revention is going to be a growth area," Jimenez told the news service.

- read the Bloomberg story

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