Novartis ‘furthers focus on healthcare’ following divestment

Novartis has announced that it has signed an agreement to sell its medical nutrition business to Nestle for $2.525 billion (1.284 billion pounds) and will narrow its focus on healthcare.

The medical nutrition unit of the company’s consumer health division is the second-largest global supplier of enteral and oral nutrition and specialist medical devices for supplying essential nutrients.

Novartis reports that the business unit has 2,000 employees working in 40 countries worldwide, with expected net sales in 2006 of $950 million.

Dr Daniel Vasella, chairman and chief executive officer of Novartis, said: “Following our long-term strategy, this divestment continues to enhance our focus on healthcare, further strengthens our financial position and provides strategic flexibility.”

He added that the deal was an “ideal fit” for the business unit and also would provide the best opportunities for management staff and associates.

The company stated that this divestment will provide greater strategic flexibility and improve its financial position.

Last month, Novartis announced its research and development pipeline, reporting 138 pharmaceutical products in development in all stages of clinical study.

It announced that it would aim to launch a number of novel pharmaceutical products over the next two years while continuing to invest in its research and development through both its own projects and partnerships.