Novartis weighs Alcon spinoff, launches share buyback

[January 25, 2017]  BASEL, Switzerland (Reuters) - Novartis AG may spin off its struggling Alcon eye care business and is launching a share buyback of up to $5 billion, the Swiss drugmaker said on Wednesday while reporting fourth-quarter results that lagged market expectations.

Fourth-quarter core net income was $2.66 billion, short of the $2.72 billion expected on average by analysts in a Reuters poll.

Sales of heart drug Entresto for the full year were $170 million, short of Novartis's own target of $200 million.

Novartis has been trying to whip Alcon back into shape and said the division was making progress. Its sales were flat in the fourth quarter.

"Options being considered range from retaining the business to separation via a capital markets transaction," it said, adding the review would take place during the course of 2017.

Novartis proposed raising its dividend by 2 percent to 2.75 Swiss francs per share.

It forecast 2017 net sales broadly in line with 2016 levels at constant exchange rates after absorbing the impact of generic competition. Core operating income was expected to be broadly in line or decline at a low-single-digit rate at constant currencies.

(Reporting by John Miller, Editing by Michael Shields)

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