BASEL, Switzerland—Encouraged by solid results at its Alcon business unit, Novartis AG (NYSE: NVS) said Tuesday that it now believes creating “a stand-alone company via a capital markets exit” for Alcon could create additional shareholder value, but the spinoff likely would not occur until 2019.

Novartis, which earlier this year announced its intention to have a strategic plan in place for Alcon by the end of this year, said the “key criteria for a final decision and timing” of an Alcon spinoff would be dependent on continued Alcon sales growth and margin improvement. These metrics need to be “demonstrated for multiple quarters leading to potential action not likely before the first half of 2019,” according to Novartis’ third-quarter financial announcement.

VMail reported on Novartis’ strategic review of its Alcon business unit in January.

On Tuesday, Novartis said in its announcement that there has been significant progress in Alcon’s strategic review, which included considering various options. “As part of this, we have updated Alcon's strategic plan, which confirms that it has the potential to grow sales at or above market while delivering profitability at least in line with the industry,” Novartis said. “We have also made significant progress on developing a potential capital markets solution, including financial carve-outs, tax and legal entity structuring, and identifying listing and incorporation locations.”

Novartis said the third-quarter and year-to-date results for Alcon—sales growth of 7 percent at constant exchange and an operating loss of $50 million in Q3, which the company said was “in line with prior year” results—indicate that Alcon’s “growth acceleration plan is beginning to generate growth… In the near-term, Alcon will benefit from focusing on completing its turnaround in performance and leveraging the infrastructure and financial strength of Novartis.”

Alcon’s net sales in the quarter were $1.5 billion, with growth in both the surgical and vision care franchises in all regions, according to the announcement. Vision care sales rose 4 percent at constant exchange, driven by the continued double-digit growth of Dailies Total 1, the announcement noted.

On the operating line, Novartis said sales growth was “offset by impairments related to business development activities.” However, core operating income totaled $238 million (a 23 percent increase at constant currency) and the core operating income margin in constant currencies increased by 2.1 percentage points.

Additionally, Novartis said it has decided to move the Novartis ophthalmic OTC products (2016 sales of $700 million) to the Alcon division effective Jan. 1, 2018. This is “where we believe the products will create most value, as they are complementary to the Alcon Vision Care business,” according to the announcement.