[March 03, 2014]ZURICH (Reuters) — Swiss pharma group
Novartis <NOVN.VX> will work more closely with rival Roche <ROG.VX>
but rules out a merger, its chairman said in a newspaper interview
on Sunday.
Asked whether the two companies wanted to stay independent, Joerg
Reinhardt, who took over as Novartis chairman in August, told Swiss
newspaper SonntagsZeitung: "Absolutely."
He said, however, that he'd met outgoing Roche Chairman Franz Humer
a few weeks ago and was also exchanging emails with his successor
Christoph Franz.
"Two pharma groups working in the same location have many topics in
common," he said. Both Roche and Novartis are based in Basel in
north-western Switzerland.
Asked whether Novartis could sell its stake in Roche that was built
up under his predecessor Daniel Vasella, Reinhardt said: "The shares
are in good hands with us. For as long as Roche does well, we take
pleasure in them."
Novartis holds a third of Roche's bearer shares <RO.S>.
In October, Roche Chief Executive Severin Schwan also knocked back
speculation that the company could merge with Novartis.
Reinhardt said in the interview Novartis hoped to conclude an
ongoing review of its over-the-counter drugs, animal health and
vaccines businesses by the end of the year.
"Then we will know if and how we have to change our structure and
organization," he said, adding discussions on possible buys or
divestments were under way with partners.
"There are not many players and everybody talks to everybody," he
said.
Novartis said in January it was looking at options for the three
businesses and wanted the review to be completed by the end of
summer.
Reinhardt said Novartis' profitability was only temporarily under
pressure due to quality issues in the U.S. and Canada, the fact that
the vaccines division was not profitable and falling sales of its
former blockbuster Diovan.
"Our profitability will rise again," he said, without giving
details.
(Reporting by Silke Koltrowitz; editing
by Jason Neely)
