(Corrects fifth paragraph to dual Swiss, New York listing, not secondary New York listing)
By John Miller
ZURICH, Nov 27 (Reuters) - Novartis eye care unit Alcon, being spun off to investors next year, aims to pay a dividend from 2020 and will focus on “bolt-on” acquisitions to help boost core operating margins to the mid-20 percent range by 2023 from the high teens now.
Alcon, which made the announcement on Tuesday ahead of an investor day in New York, is being jettisoned from Novartis’s portfolio as Chief Executive Vas Narasimhan focuses on new drugs, not the surgical devices and contact lenses that Alcon makes.
The eye care unit, whose sales returned to growth in 2017 after Novartis was forced to invest millions in sales and service staff to arrest declines, could be valued between $20 billion and $30 billion, Novartis officials have said, when it is spun off to shareholders in the first half of 2019.
“Alcon has executed a turnaround plan that has reinvigorated its pipeline, strengthened its customer relationships, and increased investments in promotion, capital and systems,” Alcon head Mike Ball said in a statement.
After the spin-off, Ball will become chairman and hand chief executive duties to David Endicott. The shares are due to have a dual listing in Switzerland and New York.
With $6.8 billion in sales last year from contact lenses, solutions and surgical devices, Alcon was no longer a good fit, Narasimhan decided, as he shifts the Basel-based drugmaker’s focus to radioactive cancer treatments, gene and cell therapy and other specialised medicines he is counting on to boost his drugs unit’s margins to around 35 percent.
Alcon will be headquartered in the Swiss city of Geneva, a location it picked this year over historical headquarters in Fort Worth, Texas.
Novartis bought Alcon as part of a series of transactions totalling more than $50 billion as its ex-chairman, Daniel Vasella, sought to build the drug company into a European healthcare giant along the lines of U.S.-based Johnson & Johnson . The division no longer includes eye drugs that came with the original Alcon acquisition, with Novartis having moved those into its main drugs division. (Editing by Thomas Seythal and Michael Shields)