Novartis AG (ADR) (NYSE:NVS) CEO Joseph Jimenez spoke with FOX Business Network’s (FBN) Maria Bartiromo during Opening Bell with Maria Bartiromo about the Novartis, GlaxoSmithKline (GSK) and Eli Lilly deal. Jimenez discussed the GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) deal saying, “the multiples look high today, but if you look at these important new drugs over the next few years the growth trajectory that those will generate make this a good deal.” When asked about selling the animal health business to Eli Lilly and Co (NYSE:LLY) Jimenez said, “I really like the animal health business,” but “when we looked at options in terms of growing it” selling was a “better option.”
Excerpts from the report are below.
Novartis CEO on whether the GSK deal is too expensive:
“No, if you look at GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) products, the oncology products that we are acquiring they have two very important new agents that have just been approved for metastatic melanoma, so the multiples look high today, but if you look at these important new drugs over the next few years the growth trajectory that those will generate make this a good deal. Also, Novartis has the number two oncology business in the world. So GSK admittedly, Andrew Witty when we talked about optimizing our portfolio said look we don’t have the scale to be able to compete in oncology but you have a world class oncology business, those molecules in the hands of a Novartis oncology business that has great power commercially and also from development standpoint will maximum value. So it’s going to prove to be a good value for Novartis AG (ADR) (NYSE:NVS) shareholders.”
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On whether the animal health business didn’t fit with Novartis’ business anymore:
“Well look, I really like the animal health business and it’s a very good business in its own right, but it is not number one or number two or number three, so when we looked at options in terms of growing it there was a better option, that was to allow Eli Lilly and Co (NYSE:LLY) which already has a very good animal health business to combined with our business and they will create the number two animal health business globally. Now, what Novartis shareholders get out of it is we get full value for that animal health business, so I feel good about the relationship we have with Eli Lilly and how we can optimize between the two companies.”