* Sales and profits likely to stagnate this year
* Head of Alcon eye division replaced with Canadian-bornBall
* Novartis faces $1.4 bln restructuring charge, to save $1bln annually by 2020 (Recasts)
By John Miller
ZURICH, Jan 27 (Reuters) - Fresh from engineering Hospira's$15 billion sale to Pfizer, drug company executiveMichael Ball has a new mission -- rescuing Novartis's Alcon eyecare division, whose continuing slump led the Swiss drugmaker tofall short of earnings forecasts once again at the end of 2015.
The Canadian-born Ball was appointed to replace Alcon chiefJeff George, Novartis said on Wednesday as it reportedfinancial results for the last three months of 2015.
As Hospira's chief executive, Ball earned $12 millionannually before moving last February to broker its sale toPfizer, at a price that was a 40 percent premium. Hereaped about $90 million in 2015 by selling Hospira shares, U.S.regulatory filings indicate.
Novartis Chief Executive Joe Jimenez has given Ball the taskof reviving Alcon, where struggling surgical equipment saleshave been exacerbated by too few innovative products. It alsoundermined customer loyalty by cutting spending on training andeducation for surgeons.
"If you look at the mistakes that were made that have led tothe slowdown, we were not as vigilant enough... on ensuring thatthe innovation pipeline would result in continued growth,"Jimenez said.
"The second is, I think we went a little too far on costsavings, we reduced some of the services that they had grownaccustomed to at Alcon."
Ball, who led Botox-maker Allergan, an Alcon rival, from2006 to 2011, is getting an extra $200 million from Jimenez thisyear to boost marketing including direct-to-consumer ads.
LAGGING LOCAL RIVAL ROCHE
Novartis said on Wednesday that its fourth-quarter core netincome fell 5 percent to $2.707 billion, missing the averageanalyst forecast of $2.967 billion.
It has missed forecasts for three straight quarters, a starkcontrast to cross-town Basel, Switzerland rival Roche,which last year upgraded its outlook and is expected to reportrising 2015 revenue on Thursday.
Novartis shares fell 3.1 percent by 1330 GMT after Jimenezpredicted 2016 sales and core operating income will be only"broadly in line" with 2015. Revenue fell 5 percent to $49.4billion in 2015, with core operating income slipping 5 percentto $13.8 billion.
Analysts said the outlook was dismal.
"There's no avoiding the fact that 2015 ended slowly and theoutlook for 2016 is disappointing," said Alistair Campbell, aBerenberg analyst.
"Novartis now has much to prove in 2016 and will take timeto win back investor enthusiasm."
Alcon is not Novartis's only headache.
The drugmaker, which on Wednesday announced a $1.4 billionrestructuring program aimed at saving $1 billion annually from2020, faces expiration of patents on drugs includingblood-cancer treatment Gleevec that produce $3 billion inrevenue.
"2016 will be a bit of a transition year, as we get throughGleevec," Jimenez said. "But once that generic exposure lessensin 2017 and 2018, you should see the true underlying growth comethrough."
Additionally, Novartis so far has been plagued byslower-than-expected uptake of its new heart failure medicineEntresto, with only $5 million in fourth-quarter revenue.
(Editing by Keith Weir)
Glaxosmithkline (GSK)