In 1996 Ciba-Geigy merged with Sandoz to form Novartis. In 1997, 2000, 2006, and 2007 it divested its specialty chemicals, agribusiness, nutrition, and medical nutrition and baby foods businesses, respectively. Novartis has also made acquisitions to strengthen its position in the healthcare market, and now generates 100% of revenues from healthcare, and operates through five diverse segments.
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The global population is growing older, and Novartis Pharmaceuticals provides products aimed at high- and middle-income countries, where a higher proportion of the population reaches old age. Novartis Pharmaceuticals' product lines reflect the most common causes of death in these countries.
While vaccines are estimated to save the lives of over 3 million people annually, the World Health Organization (WHO) estimates that over 3 million people die annually due to a lack of access to vaccines. The Vaccines and Diagnostics division has a product development portfolio of 15 potential products in various stages of clinical development.
The Consumer Health segment represents only 8% of sales. Despite this, the segment is important in providing stable growth to offset fluctuations in the less stable segments of Sandoz and Pharmaceuticals.
Your key questions answered
- How has Novartis changed to generate 100% of its revenues from healthcare sales, rather than the 45% that healthcare sales contributed in 1996?
- What mergers, acquisitions, and divestments has Novartis made, and how have these affected the company?
- Which areas of healthcare is Novartis present in? SHOW LESS READ MORE >
NOVARTIS’S ORIGINS TRACE BACK TO THREE COMPANIES
- Company origins
-- Geigy was a dye producer
-- Ciba was a chemicals company
-- Sandoz was a pharmaceuticals, nutrition and agribusiness/chemicals company
-- Novartis was founded through a merger
- Mergers, acquisitions, and divestments have made Novartis a leading healthcare company
-- Novartis spun off its chemical, agribusiness, and nutrition units
-- Novartis expanded its pharmaceuticals business with acquisitions
- Novartis’s different segments address the different needs of a changing population
-- The common causes of death have changed significantly in the last 100 years
-- Novartis Pharmaceuticals largely addresses the healthcare needs of middle- and high-income countries
-- Novartis Vaccines and Diagnostics largely addresses the needs of low-income countries
-- The company is expanding geographically
-- Animal Health and OTC provide stable growth
- Novartis’s diversity and investment in R&D will “improve the long-term growth prospects of the business”
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