ZURICH (Reuters) - Swiss drugmaker Novartis AG (NOVN.VX) has offered investors a $5 billion sweetener through a share buyback program, signaling a sharper focus on shareholder rewards as it moves away from the big takeovers of the past. The Basel-based company is carrying out a broad review of operations following the departure of veteran chairman and one-time CEO Daniel Vasella and some analysts had seen scope for an even bigger handout to the company's shareholders. Novartis said it would allocate capital to the share buyback over two years as well as to a strong and growing dividend and to "bolt-on" or relatively small acquisitions. "We are now entering our next growth phase and we're focusing at driving continued growth but also on delivering good shareholder returns," Jimenez told investors and analysts in a presentation in London on Friday. The buyback is part of a $10 billion program authorized by investors in 2008 and which was partly resumed in 2010 to mollify shareholders in the wake of the company's $39 billion purchase of the rest of eye care firm Alcon. The latest payout could also help ease concerns ahead of the loss of exclusivity from 2015 on its biggest seller, cancer drug Glivec, that could drag on mid-term growth. Novartis is also considering options for its non-core assets that lack the scale to become world leaders, but shied away from announcing radical change to its structure on Friday. Deutsche Bank analyst Tim Race said there could be some disappointment for anyone looking for news of major corporate change, but added: "For us the net takeaway is a small positive resulting from the modest buyback program." Race said the buyback could boost consensus earnings forecasts for the company by around 2.5 percent over two years. Shares in Novartis, which has a stock market value of $214 billion, were trading up 1.1 percent at 73.15 francs by 1426 GMT (10.26 a.m ET), compared with a 0.4 percent firmer European healthcare sector. .SXDP. The stock rose as high as 74.25 francs, its highest in nearly seven years. Novartis had last week taken the first step in a much-anticipated restructuring by agreeing to sell its blood transfusion testing unit to Spain's Grifols SA (GRLS.MC) for $1.7 billion. The drugmaker was silent about any further plans to sell off or bulk up its business, although it referred to the testing unit sale as one result of its review. Jimenez said the company was considering all options for its smaller units - such as vaccines, animal health and consumer health - and said he would be "disappointed" if the company's portfolio review was not complete within a year. Novartis is not alone in the drug sector in pondering divestments, as global drugmakers shed underperforming assets in a wave of dealmaking while simultaneously trying to bolster their new drug pipelines by buying up smaller firms. There has been speculation that Novartis's animal health unit, which Citi analysts estimate could have an enterprise value (equity plus debt) of roughly $4 billion, could be next on the block. But some analysts have become more cautious about the scale of any restructuring at the Swiss firm. "We think it will not be as dramatic as some have hoped for," analysts at brokerage Jefferies, who were among the earliest champions of a strategic overhaul, wrote in a note last month. Novartis's 33 percent voting stake in rival Roche Holding AG (ROG.VX) - built up during Vasella's time as CEO - has also been cited as a possible divestment. But Deutsche Bank analysts say Novartis may struggle to gain a premium on the holding. The company said it would continue to cut costs to improve productivity by consolidating its research sites worldwide and expects to deliver productivity gains equating to roughly 3 to 4 percent of sales per year through 2015. Novartis also updated investors on its pharmaceutical business and highlighted cancer drugs, including LDK378 for non-small cell lung cancer, as among the most promising treatments in its pipeline. It said it would start Phase III trials for its experimental drug LEE011 in breast cancer in December, which analysts at brokerage Bernstein said could mean quicker-than-expected competition for Pfizer Inc's (PFE.N) palbociclib, also in Phase III development. Editing by Jane Merriman and David Holmes