Aug 25, 2022 - Economy

Novartis to spin off Sandoz generics business

Dan Primack

Illustration of many pills and coins falling — Illustration: Annelise Capossela/Axios

Novartis on Thursday announced plans to spin off its Sandoz generic drugs unit into a standalone company whose shares would trade in both Switzerland and the U.S.

Why it matters: This would create Europe's largest generics company by sales, and comes just a few years after Novartis spun off its Alcon eye care business (now valued at over $34 billion).

Backstory: Novartis last November said it was seeking strategic alternatives for Sandoz, which could have included a sale. Blackstone and Carlyle reportedly mulled a $25 billion offer, while other reported suitors included Advent International, KKR and Hellman & Friedman.

Bloomberg reports that the LBO financing environment proved too challenging, but that the Swiss drugmaker would still "consider an attractive offer."
Novartis says that it never received any formal takeover bids.

The big picture, per The Wall Street Journal: "In response to greater competition, Novartis has pivoted Sandoz toward higher-value generics, such as biosimilars, which are near-replicas of biologic drugs made using living cells. The unit, which has accounted at times for around a fifth of total sales for Novartis, has in the past proven a drag on the company’s growth."

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Novartis to spin off Sandoz generics business

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