As per the disclosures made by both the companies, Novartis would acquire GSKs oncology products for an aggregate cash consideration of $16 billion (of which up to $1.5 billion depends on the results of the COMBI-d trial). Further, Novartis will sell its global vaccines business (excluding influenza vaccines) to GSK for $7.1 billion plus royalties. The $7.1 billion consists of $5.25 billion upfront and up to $1.8 billion in milestones.
Apart from these set of transactions, GSK and Novartis have agreed to create a consumer healthcare business through a joint venture between Novartis OTC and GSK Consumer Healthcare. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture's board. Novartis will also have customary minority rights and exit rights at a pre-defined, market-based pricing mechanism.
In a separate transaction, Novartis has agreed to divest its animal health division to the US-based pharma player Eli Lilly for approximately $5.4 billion.
The transactions are expected to improve Novartis' sales and core operating income growth rates, while improving margins. Each of the transactions is projected to be value creating, the company said in a release.
The Novartis India shares were trading 7.34% higher at Rs 501.85 at 1.35 pm IST on the BSE. Meanwhile, the GSK scrip was trading flat at Rs 2,495 on the BSE.