Merger with Novartis to boost Alcon’s presence in global eye care market

Six months after its merger with Novartis was finalized, Alcon is poised to expand its global eye care market in the context of a reorganized business model.

Novartis is looking to the Alcon Division to make deep inroads in the growing global ophthalmic market, Stuart Raetzman, Alcon’s area president U.S. and vice president for global marketing, said.

“Novartis’ decision to acquire Alcon was based on the critical importance of eye care and the long-term growth opportunity in eye care,” Mr. Raetzman said in an email interview with Ocular Surgery News. “The ophthalmic market is very attractive because of the aging global demographics and unmet medical needs that will drive demand for our products. Alcon’s market leadership, strong financial performance, growth potential and demonstrated operational excellence convinced Novartis that Alcon was the best partner to build a fifth growth platform.”

A restructured and reinvented Alcon will maintain its long-held tradition of innovation and customer service, Mr. Raetzman said.

“We have made significant progress in building our new organization and are preparing to launch the new Alcon commercial capability to our customers,” Mr. Raetzman said. “Our focus has been on ensuring business continuity with our customers while we are planning for the integration of our products and services. Our commercial teams have worked hard to start the training process with our sales forces on new products and evolve their go-to market strategies to serve our customers with our new combined portfolio.”

In April, more than two-thirds of Novartis shareholders voted in favor of the merger, which followed an earlier majority vote by Alcon shareholders. Up to 8 million shares were issued as part of the transaction, according to a news release from Novartis.

The Alcon division is the parent company’s second largest division. It is headquartered in Fort Worth, Texas, has operations in 75 countries and sells products in 180 markets.

Three-pronged commercial model

Alcon’s new commercial model comprises a Surgical business, a Pharmaceutical business and a Vision Care business. Alcon officials expected the model to be fully implemented by mid-2011, Mr. Raetzman said.

“This merger allows Alcon to deliver even better services, increase access to our products and bring innovations to market faster,” he said. “Each business operates with specialized sales forces and marketing support to maximize customer support and to ensure continuity of service to the eye care and health care communities.”

The Surgical business will provide equipment, instruments, disposable products and IOLs for surgical procedures that address cataracts, vitreoretinal conditions, glaucoma and refractive errors.

The Pharmaceutical business will combine Alcon’s pharmaceuticals with selected products from Novartis Ophthalmics, excluding Lucentis (ranibizumab), and will oversee the line of professionally driven over-the-counter brands in artificial tears and ocular vitamins.

“By adding several of the Novartis Ophthalmics prescription drugs, we are rounding out Alcon’s range of pharmaceutical products,” Mr. Raetzman said.

The Vision Care business will combine the Ciba Vision portfolio of contact lenses and lens care products with Alcon’s contact lens solution portfolio. The Ciba Vision portfolio includes Air Optix, Dailies, FreshLook and Clear Care.

“The integration of Ciba Vision into Alcon allows Novartis to consolidate its Ciba Vision and ophthalmic products into a dedicated and comprehensive eye care business,” Mr. Raetzman said. “This will further enhance our leadership position in the vision care market, allowing us to address the full range of customer and consumer needs.”

Research and development

Alcon will continue aggressive research and development efforts, Mr. Raetzman said.

“We are always looking for new compounds, materials and technologies to help people see better and enhance quality of life,” he said. “Alcon has made the largest corporate commitment to research and development in the eye care industry. We are planning to spend approximately $4 billion in research and development over the next 5 years to drive research and new product development in eye care. Additionally, Alcon has the opportunity to partner with the Novartis Institutes for BioMedical Research to accelerate innovation for the eye.”

Alcon aims to increase commercial and therapeutic value for customers and patients through the transformation of concepts into products, improved access to these products, leveraging of drug reimbursement capabilities and unfettered access to Novartis’ development infrastructure, Mr. Raetzman said. – by Matt Hasson

• Stuart Raetzman can be reached at Alcon Laboratories, 6201 South Freeway, Fort Worth, TX 76134; 817-615-5092; email: stuart.raetzman@alconlabs.com.