Novartis To Restructure U.S. business, Cut 1,960 Positions
January 15, 2012
Novartis (NYSE:NVS) plans to strengthen its long-term competitive position in anticipation of the Diovan patent expiration and an expected reduction in demand for Rasilez/Tekturna following termination of the ALTITUDE clinical study. The company plans to reduce its cost base with the current restructuring focused on the US market. A central element of the plan is a restructuring of the General Medicines business in the important US market, where Novartis Pharmaceuticals will continue to focus on expanding its presence in specialty businesses aligned with the product portfolio and pipeline. As a result, the field force is planned to be reduced by approximately 1,630 positions and headquarters functions will realign to support the new organization, resulting in an additional reduction of approximately 330 positions. The changes are planned to take effect in the second quarter of 2012, and associates will be notified in early April. Novartis (NYSE:NVS) has potential upside of 18% based on a current price of $55.3 and an average consensus analyst price target of $65.26.