The consumer health unit of Novartis, which includes CIBA Vision, has reported a 7 percent increase in net sales to $1.5 billion in the second quarter of 2010. The division's European sales were up by 5 percent to $600 million, with the strongest growth in France, the U.K. and Germany. For the first half, the unit's revenues also grew by 7 percent to $3 billion. CIBA Vision was pointed out for its AirOptix product and its good expansion into new geographies.
The company expects that its acquisition of a 77 percent share of Alcon could be completed in the third or fourth quarter of this year, as all the necessary regulatory hurdles have been passed. However, new hurdles have come in the way of Novartis' mandatory bid for the balance of Alcon's shares.
Novartis may have to raise the amount that it is prepared for them after a corporate governance expert advised Alcon's Independent Director Committee (IDC) that the price that Novartis is offering to buy the 23 percent stake held by minority shareholders is inadequate. That figure has since dropped to $136.78, representing a discount of some 25 per cent on the $180 per share it is paying for Nestle's 52 per cent stake in the company. The IDC pointed out that Alcon's performance has remained strong, exceeding analysts' expectations in the two quarters since the merger proposal.
In his legal opinion, Professor Hans Casper von der Crone confirmed that the IDC's recommendation was a mandatory step in completing the merger. In a statement for the IDC, he backed the IDC's rights and obligations under Swiss law and, in doing so, supported many of the legal arguments previously put forward by the IDC.
The IDC said that this conclusion refuted Novartis' public implications that it would be able to unilaterally impose the merger irrespective of the IDC's position once Novartis became Alcon's majority shareholder.
Meanwhile, a federal U.S. court in New York has dismissed a lawsuit against Novartis, filed by several pension funds and minority shareholders who claimed that the Swiss group had shortchanged them when it merged with Alcon in a $28.1 billion deal. The dismissal was based on jurisdiction ? since both companies are Swiss and the merger took place under Swiss law, the judge found that there was no valid jurisdiction in the U.S.
Separately, CIBA Vision is appealing a London court ruling in an infringement lawsuit with Johnson & Johnson involving its European patent for extended wear lenses. The British court found that the patent was invalid in 2007, but Novartis argues that courts in France and the Netherlands rules differently. The company claims that J&J's Acuvue Oasys lenses violate its patents, while J&J says that Novartis' patent is too broad.