GENEVA -- Swiss pharmaceutical giant Novartis (NVS) announced a series of multibillion-dollar deals Tuesday with other major pharmaceutical companies that it said would reduce sales but boost profitability, while affecting some 15,000 of its employees globally.
The Basel, Switzerland-based company said it has agreed to buy GlaxoSmithKline's (GSK) cancer-drug business for $14.5 billion, plus up to $1.5 billion more if certain milestones are met, and to divest most of its vaccines business to GSK for $7.1 billion, plus royalties.
The two drugmakers also are creating a new consumer health care business through a joint venture. It combines Novartis' over-the-counter drug business with GSK's consumer business to create a new entity that would generate $10 billion a year in revenue. Novartis would own 36.5% of the new business, focusing on pain management, coughs and colds and dermatology.
All the deals between Novartis and GSK are timed to close simultaneously.
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Separately, Novartis said it will sell off its animal health division to U.S.-based Eli Lilly (LLY) for about $5.4 billion.
In a statement, Novartis CEO Joseph Jimenez said the deals mark "a transformational moment" for the company by refocusing its business around three core strengths: innovative drugs, eye care and generics.
"They also improve our financial strength, and are expected to add to our growth rates and margins immediately," he said.