With the planned spin-off, Sandoz will become a large-scale, independent company focused on biosimilars, antibiotics and generic medicines, based in Switzerland and listed on the SIX Swiss Exchange
Novartis will spin-off Sandoz. (Credit: Novartis AG)
Novartis is planning to spin-off its generics and biosimilars subsidiary Sandoz, into a new publicly traded independent company, to focus on its patented prescription medicines.
The planned spin-off is expected to create a large developer of generics and biosimilars, based in Switzerland and listed on the SIX Swiss Exchange.
Last year, Sandoz generated $9.6bn in sales, has an existing biosimilars pipeline of more than 15 molecules, experienced management team and organisation.
The company would continue to invest in the strategic areas of biosimilars, antibiotics and generic medicines, building on its strong brand value and global position.
Closing of the proposed spin-off is subject to satisfaction of certain conditions, including consultation with employee representatives, favourable tax rulings, approval from Novartis Board of Directors, and shareholders.
Upon closing, Sandoz would target an investment grade credit rating, to provide sufficient financial flexibility to deliver on its growth plans.
Novartis board chairman Joerg Reinhardt said: “Our strategic review examined all options for Sandoz and concluded that a 100% spin-off is in the best interest of shareholders.
“A spin-off would allow our shareholders to benefit from the potential future successes of a more focused Novartis and a standalone Sandoz, and would offer differentiated and clear investment theses for the individual businesses.
“Sandoz would become the publicly traded #1 European generics company and a global leader in biosimilars based in Switzerland.”
Novartis would continue focusing on its five core therapeutic areas, Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular, to become an innovative medicines company.
It aims to strengthen its Gene Therapy, Cell Therapy, Radioligand Therapy, Targeted Protein Degradation and xRNA technology platforms, along with a balanced geographic footprint.
The Swiss drugmaker plans to implement its new organisational structure, announced in April this year.
Its Pharmaceuticals and Oncology business units will be integrated with separate US and International commercial organisations, supported by a new Strategy & Growth function and Operations unit.
Novartis CEO Vas Narasimhan said: “For Novartis, the separation of Sandoz would further support our strategy of building a focused innovative medicines company, with depth in five core therapeutic areas, and strength in technology platforms.
“In addition, both companies would be able to focus on maximizing value creation for their shareholders by prioritizing capital and resource allocation, employing separate capital structure policies, and increasing management focus on their respective business needs.”