XML 36 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Significant transactions (Details)
€ in Millions
1 Months Ended 3 Months Ended 6 Months Ended
Jan. 31, 2020
USD ($)
Jan. 31, 2020
EUR (€)
Jan. 06, 2020
USD ($)
May 08, 2019
USD ($)
May 07, 2019
USD ($)
Apr. 08, 2019
USD ($)
Mar. 31, 2020
USD ($)
Mar. 31, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jan. 31, 2020
EUR (€)
Dec. 31, 2019
USD ($)
Apr. 09, 2019
USD ($)
Mar. 06, 2019
USD ($)
Sep. 06, 2018
USD ($)
Disclosure of detailed information about business combination [line items]                                  
Identifiable assets acquired (liabilities assumed)                 $ 10,030,000,000 $ 486,000,000 $ 10,030,000,000 $ 486,000,000          
Profit (loss) from discontinued operations                   4,691,000,000   4,590,000,000          
Intangible assets other than goodwill                 36,669,000,000   36,669,000,000     $ 28,787,000,000      
Revenue from sale of goods                 11,347,000,000 11,764,000,000 23,630,000,000 22,923,000,000          
Difference between carrying amount of dividends payable and carrying amount of non-cash assets distributed, Net                   4,691,000,000   4,691,000,000          
Innovative Medicines                                  
Disclosure of detailed information about business combination [line items]                                  
Intangible assets other than goodwill                 34,877,000,000   34,877,000,000     27,586,000,000      
Revenue from sale of goods                 9,407,000,000 9,503,000,000 19,352,000,000 18,532,000,000          
Sandoz                                  
Disclosure of detailed information about business combination [line items]                                  
Intangible assets other than goodwill                 1,674,000,000   1,674,000,000     1,125,000,000      
Revenue from sale of goods                 2,202,000,000 2,475,000,000 4,779,000,000 4,840,000,000          
Corporate                                  
Disclosure of detailed information about business combination [line items]                                  
Intangible assets other than goodwill                 118,000,000   118,000,000     $ 76,000,000      
Revenue from sale of goods                 $ (262,000,000) (214,000,000) $ (501,000,000) $ (449,000,000)          
Sandoz                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                     On September 6, 2018, Novartis announced that it entered into a stock and asset purchase agreement (SAPA) with Aurobindo Pharma USA Inc. (Aurobindo) for the sale of selected portions of its Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solids portfolio, for USD 0.8 billion in cash and potential earnouts. The closing was conditional on obtaining regulatory approval. In March 2020, Novartis took the decision to retain the Sandoz US generic oral solids and dermatology businesses and entered into a mutual agreement with Aurobindo to terminate the transaction. The decision was taken as regulatory approval from the US Federal Trade Commission was not obtained within the SAPA agreed timelines. The cumulative amount of the depreciation on property, plant and equipment and amortization on intangible assets, not recorded in the consolidated income statement since the date of classification as held for sale, amounting to USD 38 million and USD 102 million, respectively, was recognized in the consolidated income statement in the first quarter of 2020. In addition, an impairment of currently marketed products of USD 42 million was recognized in the first quarter of 2020 consolidated income statement. As at March 31, 2020, the assets and liabilities of the Sandoz US generic oral solids and dermatology businesses were reclassified out of assets and liabilities of disposal group held for sale. The prior year balance sheet is not required to be restated. In the Group’s consolidated balance sheet at December 31, 2019, the assets and liabilities classified as disposal group assets and liabilities held for sale consisted of the following: There are no cumulative income or expenses included in other comprehensive income relating to the disposal group.            
Sandoz | Sandoz                                  
Disclosure of detailed information about business combination [line items]                                  
Consideration transferred, divestment-date fair value                                 $ 800,000,000
Depreciation, property, plant and equipment             $ 38,000,000                    
Amortisation, intangible assets other than goodwill             102,000,000                    
Impairment loss recognised in profit or loss, intangible assets and goodwill             $ (42,000,000)                    
Aspen Global Incorporated | Sandoz                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                     On November 11, 2019, Sandoz entered into an agreement for the acquisition of the Japanese business of Aspen Global Incorporated (AGI), a wholly owned subsidiary of Aspen Pharmacare Holdings Limited. Under the agreement, Sandoz acquired the shares in Aspen Japan K.K. and associated assets held by AGI. The transaction closed on January 31, 2020. Aspen’s portfolio in Japan consists of off-patent medicines with a focus on anesthetics and specialty brands. The acquisition will enable Sandoz to expand its presence in the third-largest worldwide generics marketplace. The purchase price consist of EUR 300 million (USD 331 million) upfront payment, less customary purchase price adjustment of EUR 29 million (USD 32 million), plus potential milestone payments of up to EUR 120 million (USD 132 million), which AGI is eligible to receive upon the achievement of specified milestones. The fair value of the total purchase consideration was EUR 342 million (USD 377 million). The amount consisted of an initial cash payment of EUR 271 million (USD 299 million) and the fair value of contingent consideration of EUR 71 million (USD 78 million), which they are eligible to receive upon the achievement of specified milestones. The preliminary purchase price allocation resulted in net identifiable assets of approximately USD 308 million, consisting of USD 269 million intangible assets, USD 26 million other net assets, USD 13 million net deferred tax assets and goodwill of approximately USD 69 million. Results of operations since the date of acquisition were not material.            
Consideration transferred, acquisition-date fair value $ 381,000,000                       € 345        
Portion of consideration paid (received) consisting of cash and cash equivalents (301,000,000) € (273)                              
Portion of consideration paid consisting of cash and cash equivalents upfront payment (331,000,000) (300)                              
Contingent liabilities recognised as of acquisition date 80,000,000                       € 72        
Identifiable assets acquired (liabilities assumed) 309,000,000                                
Additional recognition, goodwill 72,000,000                                
Other net assets 26,000,000                                
Deferred tax liability (asset) 14,000,000                                
Intangible assets other than goodwill 269,000,000                                
Potential milestone maximum payments 132,000,000 120                              
Customary purchase price adjustment $ 30,000,000 € 27                              
The Medicines Company | Innovative Medicines                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                     On November 23, 2019, Novartis entered into an agreement and plan of merger (the Merger Agreement) with The Medicines Company, a US-based pharmaceutical company headquartered in Parsippany, New Jersey USA. Pursuant to the Merger Agreement, on December 5, 2019, Novartis, through a subsidiary, commenced a tender offer to acquire all outstanding shares of The Medicines Company for USD 85 per share, or a total consideration of approximately USD 9.6 billion in cash on a fully diluted basis, including the equivalent share value related to The Medicines Company’s convertible notes, in accordance with their terms. The tender offer expired on January 3, 2020, and on January 6, 2020, the acquiring subsidiary merged with and into The Medicines Company, resulting in The Medicines Company becoming an indirect wholly owned subsidiary of Novartis. Novartis financed the transaction through available cash, and short- and long-term borrowings. The Medicines Company is focused on the development of inclisiran, a potentially first-in-class, twice yearly therapy that allows administration during patients’ routine visits to their healthcare professionals and will potentially contribute to improved patient adherence and sustained lower LDL-C levels. The fair value of the total purchase consideration was USD 9.6 billion. The preliminary purchase price allocation resulted in net identifiable assets of approximately USD 7.1 billion, consisting of USD 8.5 billion intangible assets, USD 1.4 billion net deferred tax liabilities and goodwill of approximately USD 2.5 billion. Results of operations since the date of acquisition were not material.            
Consideration transferred, acquisition-date fair value     $ 9,600,000,000                            
Portion of consideration paid (received) consisting of cash and cash equivalents     (9,600,000,000)                            
Identifiable assets acquired (liabilities assumed)     7,100,000,000                            
Additional recognition, goodwill     2,500,000,000                            
Cash offer per ordinary share     85                            
Deferred tax liability (asset)     1,400,000,000                            
Intangible assets other than goodwill     $ 8,500,000,000                            
Takeda Pharmaceutical Company Limited                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                       On May 8, 2019, Novartis entered into an agreement with Takeda Pharmaceutical Company Limited (Takeda) to acquire the assets associated with Xiidra (lifitegrast ophthalmic solution) 5% worldwide. Xiidra is the first and only prescription treatment approved to treat both signs and symptoms of dry eye by inhibiting inflammation caused by the disease. The transaction bolsters the Novartis front-of-the-eye portfolio and ophthalmic leadership. The transaction closed on July 1, 2019. The purchase price consists of a USD 3.4 billion upfront payment, customary purchase price adjustments of USD 0.1 billion, and the potential milestone payments of up to USD 1.9 billion, which Takeda is eligible to receive upon the achievement of specified commercialization milestones. The fair value of the total purchase consideration is USD 3.7 billion. The amount consists of an initial cash payment of USD 3.5 billion, and the fair value of the contingent consideration of USD 0.2 billion, which Takeda is eligible to receive upon the achievement of specified commercialization milestones. The purchase price allocation resulted in net identifiable assets of approximately USD 3.6 billion, consisting mainly of intangible assets of USD 3.6 billion, and goodwill amounted to approximately USD 0.1 billion. In 2019, from the date of acquisition, the business generated net sales of USD 0.2 billion. Management estimates that net sales for the entire year of 2019 would have amounted to USD 0.3 billion, had the business been acquired at the beginning of the 2019 reporting period. The 2019 results of operations since the date of acquisition were not material.          
Takeda Pharmaceutical Company Limited | Innovative Medicines                                  
Disclosure of detailed information about business combination [line items]                                  
Consideration transferred, acquisition-date fair value       $ 3,700,000,000                          
Portion of consideration paid (received) consisting of cash and cash equivalents       (3,500,000,000)                          
Portion of consideration paid consisting of cash and cash equivalents upfront payment       (3,400,000,000)                          
Contingent liabilities recognised as of acquisition date       200,000,000                          
Identifiable assets acquired (liabilities assumed)       3,600,000,000                          
Additional recognition, goodwill       100,000,000                          
Revenue of acquiree since acquisition date       200,000,000                          
Revenue of acquiree full year       300,000,000                          
Intangible assets other than goodwill       3,600,000,000                          
Potential milestone maximum payments       1,900,000,000                          
Customary purchase price adjustment       $ 100,000,000                          
IFM Tre, Inc.                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                       On May 7, 2019, Novartis acquired IFM Tre, Inc., a privately held, US-based biopharmaceutical company focused on developing anti-inflammatory medicines targeting the NLRP3 inflammasome. The acquisition gives Novartis full rights to IFM Tre, Inc.’s portfolio of NLRP3 antagonists. The NLRP3 antagonists portfolio consists of one clinical program and two preclinical programs: IFM-2427, a first-in-class, clinical-stage systemic antagonist for an array of chronic inflammatory disorders, including atherosclerosis and nonalcoholic steatohepatitis (NASH); a preclinical-stage gutdirected molecule for the treatment of inflammatory bowel disease; and a preclinical-stage central nervous system (CNS)-penetrant molecule. The previously held interest of 9% was adjusted to its fair value of USD 33 million through the consolidated income statement at acquisition date. This remeasurement resulted in a gain of USD 14 million. The fair value of the total purchase consideration for acquiring the 91% stake Novartis did not already own amounted to USD 361 million. The amount consisted of an initial cash payment of USD 285 million, and the fair value of the contingent consideration of USD 76 million due to the IFM Tre, Inc. shareholders, which they are eligible to receive upon the achievement of specified development and commercialization milestones. The purchase price allocation resulted in net identifiable assets of USD 355 million, mainly intangibles, and goodwill of USD 39 million. The 2019 results of operations since the date of acquisition were not material.          
IFM Tre, Inc. | Innovative Medicines                                  
Disclosure of detailed information about business combination [line items]                                  
Consideration transferred, acquisition-date fair value         $ 361,000,000                        
Portion of consideration paid (received) consisting of cash and cash equivalents         (285,000,000)                        
Contingent liabilities recognised as of acquisition date         76,000,000                        
Identifiable assets acquired (liabilities assumed)         355,000,000                        
Additional recognition, goodwill         $ 39,000,000                        
Divested interest in associate         9.00%                        
Acquisition-date fair value of equity interest in acquiree held by acquirer immediately before acquisition date         $ 33,000,000                        
Gain (loss) recognised as result of remeasuring to fair value equity interest in acquiree held by acquirer before business combination         $ 14,000,000                        
Percentage of voting equity interests acquired         91.00%                        
PowerVision, Inc.                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                       In March 2019, Alcon acquired PowerVision, Inc. (PowerVision), a privately-held, US-based medical device development company focused on developing accommodative, implantable intraocular lenses. The fair value of the total purchase consideration was USD 424 million. The amount consisted of an initial cash payment of USD 289 million and the net present value of the contingent consideration of USD 135 million, due to PowerVision shareholders, which they are eligible to receive upon the achievement of specified regulatory and commercialization milestones. The purchase price allocation resulted in net identifiable assets of USD 418 million, consisting of intangible assets, of USD 505 million, net deferred tax liabilities of USD 93 million, other net assets of USD 6 million, and goodwill of USD 6 million. The 2019 results of operations since the date of the acquisition are not material. For additional information related to the distribution (spin-off) of the Alcon business to Novartis AG shareholders, effected through a dividend in kind distribution that was completed on April 8, 2019, refer to Note 3.          
Discontinued operations                                  
Disclosure of detailed information about business combination [line items]                                  
Profit (loss) from discontinued operations                   4,691,000,000   $ 4,590,000,000          
Revenue from sale of goods                       1,809,000,000          
Dividend in kind distribution liability           $ 23,434,000,000                      
Difference between carrying amount of dividends payable and carrying amount of non-cash assets distributed           3,409,000,000                      
Difference between carrying amount of dividends payable and carrying amount of non-cash assets distributed, Net           4,691,000,000       $ 4,691,000,000   $ 4,691,000,000          
Discontinued operations | Alcon [member]                                  
Disclosure of detailed information about business combination [line items]                                  
Repayment of intercompany balances           3,100,000,000                      
Other borrowings                               $ 3,200,000,000  
Dividend in kind distribution liability               $ 26,400,000,000                  
Borrowings                               3,500,000,000  
Decrease of distribution liability           $ 3,000,000,000                      
Net assets liabilities               23,100,000,000                  
Financial assets, at fair value                             $ 1,300,000,000    
Additional borrowings                               300,000,000  
Percentage of equity interest shares received           4.70%                      
Discontinued operations | Alcon [member] | Borrowings, USD [member]                                  
Disclosure of detailed information about business combination [line items]                                  
Other borrowings                               2,800,000,000  
Discontinued operations | Alcon [member] | Borrowings, EUR [member]                                  
Disclosure of detailed information about business combination [line items]                                  
Other borrowings                               $ 400,000,000  
Discontinued operations | Alcon [member]                                  
Disclosure of detailed information about business combination [line items]                                  
Detailed information about significant transaction                       On June 29, 2018, Novartis announced its intention to seek shareholder approval for the spin-off of the Alcon business into a separately traded standalone company, following the complete structural separation of the Alcon business into a standalone company (the Alcon business or Alcon Inc.). The Novartis AG shareholders approved the spin-off of the Alcon business at the 2019 Annual General Meeting held on February 28, 2019, subject to completion of certain conditions precedent to the distribution. Upon shareholder approval, the Alcon business was reported as discontinued operations, and the fair value of the Alcon business exceeded the carrying value of its net assets. The conditions precedent to the spin-off were met and on April 8, 2019 the spin-off of the Alcon business was effected by way of a distribution of a dividend in kind of Alcon Inc. shares to Novartis AG shareholders and ADR (American Depositary Receipt) holders (the Distribution), which amounted to USD 23.4 billion and is recognized as a reduction to retained earnings. Through the Distribution, each Novartis AG shareholder received one Alcon Inc. share for every five Novartis AG shares/ADRs they held on April 8, 2019, close of business. As of April 9, 2019, the shares of Alcon Inc. are listed on the SIX Swiss Exchange (SIX) and on the New York Stock Exchange (NYSE) under the symbol “ALC.” The dividend in kind distribution liability to effect the spin-off of the Alcon business (the distribution liability) amounted to USD 26.4 billion at March 31, 2019, unchanged from its initial recognition on February 28, 2019, and was in excess of the carrying value of the Alcon business net assets as of February 28, 2019, and as of March 31, 2019. The net assets of the Alcon business amounted to USD 23.1 billion as at March 31, 2019. On March 6, 2019, Alcon entered into financing arrangements with a syndicate of banks under which it borrowed on April 2, 2019, a total amount of USD 3.2 billion. These borrowings consisted of approximately USD 2.8 billion and the equivalent of USD 0.4 billion in EUR in bridge and other term loans under such Alcon facilities agreement. In addition, approximately USD 0.3 billion of borrowings under a number of local bilateral facilities in different countries, with the largest share of borrowings in Japan, were raised. This resulted in a total gross debt of USD 3.5 billion. These outstanding borrowings of the Alcon legal entities were recorded in the balance sheet and financing cash flow from discontinued operations. Prior to the spin-off, through a series of intercompany transactions, Alcon legal entities paid approximately USD 3.1 billion in cash to Novartis and its affiliates. At the April 8, 2019 Distribution, the fair value of the distribution liability of the Alcon business amounted to USD 23.4 billion, a decrease of USD 3.0 billion from March 31, 2019. As mentioned above, prior to the spin-off, through a series of intercompany transactions, Alcon legal entities incurred additional net financial debt and paid approximately USD 3.1 billion in cash to Novartis and its affiliates. This additional net debt and transactions resulted in a decrease in Alcon’s net assets to USD 20.0 billion at the date of the Distribution of the dividend in kind to Novartis AG shareholders on April 8, 2019. The distribution liability at April 8, 2019, remained in excess of the then-carrying value of the Alcon business net assets. Certain consolidated foundations own Novartis AG dividend-bearing shares restricting their availability for use by the Group. These Novartis AG shares are accounted for as treasury shares. Through the Distribution, these foundations received Alcon Inc. shares representing an approximate 4.7% equity interest in Alcon Inc. Upon the loss of control of Alcon Inc. through the Distribution, the financial investment in Alcon Inc. was recognized at its fair value based on the opening traded share price of Alcon Inc. on April 9, 2019 (a Level 1 hierarchy valuation). At initial recognition, its fair value of USD 1.3 billion was reported on the Group’s consolidated balance sheet as a financial asset. Management has designated this investment at fair value through other comprehensive income. The total non-taxable, non-cash gain recognized at the distribution date of the spin-off of the Alcon business amounted to USD 4.7 billion consisting of: For additional disclosure on discontinued operations, refer to Note 10.          
Discontinued operations | PowerVision, Inc. | Alcon [member]                                  
Disclosure of detailed information about business combination [line items]                                  
Consideration transferred, acquisition-date fair value               424,000,000                  
Portion of consideration paid (received) consisting of cash and cash equivalents               (289,000,000)                  
Contingent liabilities recognised as of acquisition date               135,000,000                  
Identifiable assets acquired (liabilities assumed)               418,000,000                  
Additional recognition, goodwill               6,000,000                  
Other net assets               6,000,000                  
Deferred tax liability (asset)               93,000,000                  
Intangible assets other than goodwill               $ 505,000,000