It gave no timetable for the move which had seemed a foregone conclusion even before the Swiss drugmaker in October 2021 announced it was conducting a strategic review for the underperforming subsidiary.
During the review period, the Basel-based group said the generics side of its portfolio continued to be trapped in a protracted downward price spiral, reinforcing the need to separate the two segments and allow Novartis to focus on its more profitable prescription drugs business.
Sandoz, which generated nearly $10 billion in sales last year from generics and biosimilars, will emerge as Europe's leading generics company, Novartis predicted.
Despite the currently sagging numbers, Novartis CEO Vas Narasimhan said the market for generics is "highly attractive,”as branded products worth $400-500 billon are likely to go off-patent over the coming decade.
After the spinoff, Narasimhan said Sandoz would still be headquartered in Switzerland. The company’s shares would be listed on the SIX Swiss Exchange, with an American Depositary Receipt program in the US. Richard Saynor would stay on board as CEO.
In a conference call, Narasimhan told analysts that, apart part from some preliminary interest, the company had received no formal binding offers for Sandoz. If these were to materialize, management would “fully consider“ them. However, he said, “we think a spin is by far and away the most likely and best way to separate these two companies.”
Some analysts seemed less certain. At Citi, the view was that competitive pressures in the generic space a likely to translate into lesser near-term stock market interest.
Author: Dede Williams, Freelance Journalist
