Novartis (NYSE:NVS) is looking to revitalize its slumping Alcon eye care division by picking up medical vet Michael Ball, who recently organized Hospira’s $15 billion sale to Pfizer (NYSE:PFE).
Ball will replace previous Alcon chief Jeff George, the company announced today. Novartis CEO Joe Jimenez is reportedly putting Ball in control of reviving Alcon.
Alcon has been in a rut, with its glaucoma drug Travatan Z patent expiring last month, intraocular lens implant revenue slumping and an underperforming over-the-counter contact lens solution biz.
“If you look at the mistakes that were made that have led to the slowdown, we were not as vigilant enough… on ensuring that the innovation pipeline would result in continued growth. The 2nd is, I think we went a little too far on cost savings, we reduced some of the services that they had grown accustomed to at Alcon,” Jimenez said.
Jimenez added that Alcon faces struggling surgical equipment sales and a lack of innovative products, as well as drooping customer loyalty as the company cut spending on training and education for surgeons.
Alcon’s slump led Novartis as a whole to miss earnings forecast for 2015, with net income falling 5%, missing Street expectations. Novartis has missed forecasts for 3 straight quarters, and Jimenez predicted that 2016 will be mostly in line with 2015.
Novartis is also facing another expiration, on its blood-cancer treatment drug Gleevec, which produces $3 billion in revenue for the company.
“2016 will be a bit of a transition year, as we get through Gleevec. But once that generic exposure lessens in 2017 and 2018, you should see the true underlying growth come through,” Jimenez said.
