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Novartis Reshapes Portfolio via GSK, Eli Lilly Deals

Stocks in this article: NVS GSK PFE AZN LLY

NEW YORK (The Deal) -- The battle against cancer has taken on a financial dimension, with Novartis (NVS) agreeing to take a host of oncology drugs from GlaxoSmithKline  (GSK) in the largest of four multi-billion transactions by the Swiss company, and Pfizer (PFE) reportedly missing out in a run for AstraZeneca (AZN) cancer treatments.

Novartis, of Basel, on Tuesday agreed to pay up to $16 billion for Uxbridge, England-based GlaxoSmithKline's oncology portfolio. The figure includes as much as $1.5 billion depending on the development of some medicines and also gives Novartis first rights to the U.K. company's oncology pipeline.

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The Swiss company will also sell its vaccine unit, minus flu vaccinations, to GlaxoSmithKline for as much as $7.1 billion, including $5.25 billion immediately and up to $1.8 billion in development milestones.

Novartis said it will launch a separate auction for the flu activities.

"The transactions mark a transformational moment for Novartis. They focus the company on leading businesses with innovation power and global scale," said Novartis CEO Joseph Jimenez in a statement.

Novartis and GlaxoSmithKline will also pool their over-the-counter medicine activities in to a joint venture that will be 36.5% owned by Novartis and make GlaxoSmithKline a consumer healthcare bulwark.

Finally, Novartis will sell its animal health business to Indianapolis-based Eli Lilly (LLY) for $5.4 billion.

The transactions follow Jimenez' promise last year to take a hard look at the company's smaller businesses.

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