Novartis CEO says COVID-19 makes valuing takeover targets tougher - ( via NewsPoints Desk)

  • Novartis CEO Vas Narasimhan said the drugmaker has financial firepower for acquisitions even with net debt of $26 billion, though the COVID-19 pandemic has made it more difficult to value takeover candidates, reported

  • "We generate a high free cash flow that allows us to not only finance our dividend, but to direct capital to other purposes," Narasimhan told Neue Zuercher Zeitung.

  • Still, he suggested that "acquisitions have slowed recently from a structural perspective" during the pandemic.

  • Meanwhile, Narasimhan said Novartis is not interested in selling its Sandoz unit for now, but rather continuing work to boost its sales and profit margins squeezed by US pricing pressure.

  • "We believe at this time that we can do this best with Sandoz within the Novartis group," he told the newspaper.

  • Beyond recent legal settlements in corruption cases that topped $1 billion, Narasimhan believes safety problems that emerged with new eye medicine Beovu have cost Novartis shares 10% of their value. "Challenge No. 1 was Beovu's launch," he said.

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