Novartis sells parts of Sandoz for $1bn
After disappointing sales, Novartis trades in the Sandoz US dermatology business and generic oral solids portfolio to Aurobindo Pharma, in a deal worth nearly $1 billion.
According to Novartis’ announcement released this morning, the deal includes approximately 300 products from selected portions of its Sandoz dermatology business and generic portfolio.
Aurobindo Pharma is to pay $900 million cash upfront, plus $100 million in potential performance-based premiums.
As part of the transaction, Aurobindo will acquire the manufacturing facilities in Wilson, North Carolina, as well as Hicksville and Melville, New York.
Approximately 750 employees from these facilities, as well as the field representatives for the PharmaDerm branded dermatology business, are expected to transfer to Aurobindo in 2019 following the completion of customary closing conditions.
Carol Lynch, president of Sandoz and head of Sandoz North America, said: “We recognize that the transfer of ownership for a business of this size is a complex process, and we are aware that it may create some uncertainties for our associates in the US. It is thus a priority for us to make the transition as clear and quick as possible.”
Novartis said earlier this year that Sandoz units were hit with price pressure and reported disappointing sales from both arms of the business.
Vas Narasimhan, Novartis’ CEO, hinted then, that the firm might sell both units and will “focus on higher growth areas” to support Sandoz’s new strategy of “prioritising complex generics, value-added medicines and biosimilars to achieve sustainable and profitable growth in the US.”
Richard Francis, CEO of Sandoz and Member of the Novartis Executive Committee, said: “Through this transaction, we are refocusing our business but also striving to ensure continuity of supply of important long-used generic medicines for patients and customers in the US.”
Following the sale, the firm will still hold a substantial portfolio including biosimilars, value-added medicines and complex generics such as injectables, respiratory and ophthalmics.
Sandoz will continue to focus both its clinical and business development, and investment efforts in these areas.
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