BASEL, Switzerland, Nov. 3, 2005 (PRIMEZONE) -- Novartis (NYSE:NVS) announced today that it has designated Dr. Joerg Reinhardt, currently Global Head of Pharma Development, to become CEO of a new Novartis division that will combine Chiron Corporation's (Nasdaq:CHIR) vaccines and diagnostics business, pending regulatory and shareholder approvals. In this new role, Dr. Reinhardt will report directly to Dr. Daniel Vasella, the Chairman and CEO of Novartis.
The biopharmaceuticals business of Chiron will be integrated into the Pharma division of Novartis under the leadership of Thomas Ebeling, CEO of this division.
"We are confident that Dr. Reinhardt's technical experience and leadership skills will enable us to maximize the potential of these two new growth platforms to further meet customer demand and address public health needs by driving innovation while increasing vaccine quality and production," said Dr. Daniel Vasella, Chairman and CEO of Novartis.
Dr. Reinhardt has spent 23 years at Novartis, most recently as head of its pharmaceutical development activities, which have been widely recognized as one of the most successful in the industry resulting in a full product pipeline. In that position, he has overseen the company's clinical, pharmaceutical, chemical and biotechnological product development, drug safety assessment and regulatory affairs. Under Dr. Reinhardt's leadership, Novartis has achieved an outstanding record in development quality, speed and productivity.
Dr. James S. Shannon, who now holds the position as Head of Clinical Development & Medical Affairs, has been named to succeed Dr. Reinhardt as Head of Pharmaceutical Development at Novartis Pharma AG. Dr. Shannon has guided the Diovan(R) clinical trial program, which is one of the largest clinical programs in the industry with over 50,000 patients, and has also been responsible for the development of the LAF237 and SPP100 programs, which are two of the most promising late-stage compounds with blockbuster potential in the Novartis pipeline. Dr. Shannon joined Sandoz in 1994 and played an integral role in the merger that formed Novartis. In the past, Dr. Shannon has led functions such as Regulatory Affairs and Global Project Management.
More about the proposed transaction Novartis announced on October 31 that it has entered into a definitive merger agreement with Chiron Corporation to acquire all of the remaining publicly held shares of Chiron it does not currently own. Novartis has made an offer to acquire the remaining approximately 113 million fully diluted shares of Chiron for USD 45.00 per share in cash, or approximately USD 5.1 billion.
Chiron's Board of Directors, based upon the unanimous recommendation of Chiron's independent directors, who were charged with acting solely on behalf of Chiron shareholders other than Novartis, have approved the Merger Agreement and recommended that Chiron shareholders vote to approve the merger.
Following approval of the proposed transaction by shareholders and regulatory authorities, Novartis will gain entry to the global vaccines market, which is expected to experience accelerating growth, more than doubling in sales in the next five years to over USD 20 billion in 2009 from about USD 9.6 billion in 2004, according to industry surveys. This acquisition also provides Novartis with access to a blood testing business, which offers strong near-term growth opportunities and potential for access to the emerging growth segment of molecular diagnostics.
Chiron, headquartered in Emeryville, California, has approximately 5,400 associates worldwide and is comprised of activities in vaccines, blood testing and biopharmaceuticals, had overall sales of USD 1.7 billion in 2004 and pro-forma net income of USD 152 million.
About Novartis
Novartis AG (NYSE:NVS) is a world leader in pharmaceuticals and consumer health. In 2004, the Group's businesses achieved net sales of USD 28.2 billion and pro forma net income of USD 5.6 billion. The Group invested approximately USD 4.1 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 91,700 people and operate in over 140 countries around the world.
For further information please consult http://www.novartis.com.
Disclaimer
This communication is for information purposes only. It shall not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities of Novartis or Chiron. The distribution of this news release may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions.
This document contains "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act. Forward-looking statements are statements that are not historical facts and are generally identified by the words "should", "can", "intends", "to become", "will", or similar expressions, or by express or implied discussions regarding strategies, plans and expectations (including synergies). These statements include, but are not limited to, financial projections and estimates and their underlying assumptions, statements regarding the benefits of the business transactions described herein, including future financial and operating results. Such statements reflect the current plans, expectations, objectives, intentions or views of management with respect to future events, are based on the current beliefs and expectations of management and are subject to significant risks, uncertainties and assumptions. Management's expectations could be affected by, among other things, competition in general, the general economic environment and other risks such as, but not limited to, those referred to in Novartis AG's Form 20-F on file with the U.S. Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those set forth or implied by the forward-looking statements.
The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the ability to obtain governmental approvals for the transaction on the proposed terms and schedule; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; social and political conditions such as war, political unrest and terrorism or natural disasters; general economic conditions and normal business uncertainty and competition and its effect on pricing, spending, third-party relationships and revenues. These forward-looking statements speak only as of the date of this press release and no undertaking has been made to update or revise them if there are changes in expectations or if any events, conditions or circumstances on which any such forward looking statement is based.
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