Novartis set to divest Indian eyecare portfolio to JB Chemicals

NEW DELHI: Drug major Novartis is planning to divest its Indian eyecare portfolio to Mumbai-based JB Chemicals, in a deal estimated to be around Rs 1,000 crore.
The Novartis spin-off will join the list of several MNCs pruning their drug portfolios and reducing exposure to the Indian market, due to multiple reasons, including increased competition and tough business environment.
Sources say the move fits well with the MNC’s strategy to capitalise its ophthalmic therapy, while for JB Chemicals it will offer an entry into a growing business segment.
Over last few months, global Big Pharma have been divesting their branded generic portfolio to domestic companies and rationalising their portfolio by selling off key assets. Further, large Indian players are doubling down on India as an attractive diversification from a US generics market beaten up heavily by price erosion. As a consequence, several deals were inked where Indian companies snapped up high-growth brands from MNCs and local sellers at attractive valuations.

The deal is expected to be announced over the next few days. Emails sent across to Novartis and JB Chemicals did not elicit a response.
Ageing population and increasing access to eyecare, especially in emerging markets, is a strong growth opportunity for drug companies. The demand for eyecare is expected to increase significantly as people spend more time in front of tablets and mobile devices.
Sources added that existing eyecare portfolio in India of Novartis is understood to be around Rs 400-500 crore, including certain brands transferred from eyecare biggie Alcon, when it was spun off from Novartis. In 2019 under a global restructuring move, Novartis had spun off Alcon into a standalone business to focus on its core area of pharmaceuticals. Alcon is a global leader in eyecare, offering solutions to issues like cataracts, glaucoma, retinal diseases and refractive errors.
The stock market seems to have got a wind of the potential deal. Over the last few days, scrips of both Novartis India and JB Chem have witnessed a spurt. On December 7, JB Chem traded on a new 52-week high at Rs 1555, while Novartis India stock closed Rs 706 on Friday.
Further, Novartis had last year announced the transfer of sales & distribution of a few of its established medicines, including the Voveran and Calcium range to Dr Reddy’s.