Novartis CEO Joe Jimenez: Animal Health Acquisition Makes Sense

A bolt-on acquisition in animal health would "make a lot of sense" for diversified Swiss drugmaker Novartis, its chief executive said on Friday.

Novartis, which last month wrapped up a $52 billion deal to buy eyecare group Alcon, is still on the look-out for smaller acquisitions of up to some $1 billion and Joe Jimenez said animal health was an area in which he was keen to expand.

People familiar with the matter said last month that Novartis was one of three bidders to advance to the second round in an auction of animal health operations being sold by Merck & Co and Sanofi-Aventis.

"I wouldn't want to speculate whether we would be interested in that particular asset, but a bolt-on strategy for animal health would make a lot of sense," Jimenez told Reuters on the sidelines of the World Economic Forum.

Industry analysts say Novartis would benefit from having a larger operation in animal health, since it would enjoy greater economies of scale.

The other two bidders in the sale of the Merck-Sanofi businesses, which have annual sales of around $500 million, are Germany's Bayer and unlisted Boehringer Ingelheim, according to the sources.

Earlier this week, Novartis announced it was buying U.S. cancer diagnostics company Genoptix for $470 million - a deal which Jimenez said typified the Basel-based group's approach to bolt-ons.

"We will be looking for acquisitions of that size that will help us accelerate our growth rate," he said. "Even with Alcon, we will be adding bolt-on acquisitions to the other growth platforms on an ongoing basis."