Amid estimates that the business could be worth as much as $1.5 billion, speculation is mounting that Swiss drugmaker Novartis may be planning to sell its dermatology generics arm, based mainly in the US, to concentrate on its cancer portfolio and other growth areas.

Analysts told news agencies the assets, which include skin-care treatments and some manufacturing facilities, may draw interest from private equity as well as strategic buyers. The Basel-based company is said to be working with a financial adviser on the potential sale.

As is the case for most other players, Novartis’ generics business, steered by subsidiary Sandoz, is under price pressure. The sector is currently undergoing consolidation. In presenting third-quarter 2017 financial results in late October, the drugmaker warned that sales in the segment could decline slightly this year.

Novartis has built its dermatology business mainly through acquisition over the past five years. It rose into the top ranks with the 2012 purchase of US-based Fougera Pharmaceuticals for $1.5 billion. This deal was followed up last year with the takeover of the AmLactin skin care brands from Minnesota-based Upsher-Smith Laboratories for an undisclosed sum.

The Swiss group meanwhile said it will strengthen its oncology portfolio through the takeover of radiopharmaceuticals producer Advanced Accelerator Applications (AAA). Under a memorandum of understanding with the company’s board, it will launch a tender offer for 100% share capital at a price of $41 per ordinary share and $82 per American Depositary Share (each representing 2 ordinary shares).

The offer would value the company at $3.9 billion.

AAA develops, produces and commercializes Molecular Nuclear Medicines including Lutathera, described as a first-in-class RadioLigand Therapy (RLT) product for neuroendocrine tumors (NETs). These are used clinically for both diagnosis and therapy.

Novartis said the transaction would strengthen its oncology presence with both near-term product launches as well as a new technology platform with potential applications across a number of oncology early development programs.

Lutathera was approved in Europe in September 2017 for treatment of unresectable or metastatic, progressive, well differentiated (G1 and G2), somatostatin receptor positive gastroenteropancreatic neuroendocrine tumors. The drug is under review in the US with a Prescription Drug User Fee Act (PDUFA) date of Jan. 26, 2018.