Pharma firm Novartis plans to buy back $5 billion in stock over two years, and said it would expand in faster-growing areas of healthcare such as treatments for skin and heart diseases.

The repurchases would begin immediately, the Switzerland-based company said before its annual investor day in London. Novartis would develop business segments in dermatology, heart failure, respiratory illnesses and cell therapy.

Andrew Baum, a pharmaceuticals analyst with Citigroup, said in a note the buyback was encouraging investors that Novartis was more focused on providing a return to shareholders now that former chairman Daniel Vasella had departed.

Novartis said it wants to save 3 to 4 per cent of total sales over the next two years by focusing on procurement, consolidating research and reviewing its manufacturing sites. – (Bloomberg)