Novartis to Spin Off, List Sandoz Drugs Business

Novartis to Spin Off, List Sandoz Drugs Business #Novartis #Spin #List #Sandoz #Drugs #Business Welcome to GistFeed

Novartis, a once-sprawling healthcare conglomerate, is looking to focus on so-called innovative medicines and cutting-edge technologies.

Photo:

Arnd Wiegmann/REUTERS

Novartis AG

NVS -0.23%

is planning to spin off its generics-and-biosimilars division Sandoz and list it as a stand-alone company in Switzerland, a move Novartis said will enable it to focus on innovative medicines.

The Swiss pharmaceutical company said Thursday that Sandoz would be based in Switzerland and listed on the SIX Swiss Exchange, with an American depositary receipt program in the U.S.

Novartis said in October it was considering the sale or spinoff of the business, a move that would focus the once-sprawling healthcare conglomerate solely on prescription drugs. Over the last decade, it has shed units that sold animal medicines, vaccines, drugstore staples, contact lenses and tools for eye surgery.

Since taking the helm in early 2018, Novartis Chief Executive Vas Narasimhan has doubled down on so-called innovative medicines and cutting-edge technologies such as gene therapies and radiopharmaceuticals, which are drugs that carry radioactive particles to tumors for close-range radiotherapy.

Sandoz, like many generic drugmakers, has struggled with falling prices in the U.S. in recent years. Generic drugs are lower-cost versions of prescription medicines for which patents have expired. While their prices are usually far below those of the branded drugs that they imitate, increased competition has driven those prices even lower in recent years.

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.

Sandoz has a strong presence in Europe as well as the U.S. It generated $9.6 billion in sales last year. Novartis expects to complete the process in the second half of 2023.

President Biden in mid-August signed into law sweeping legislation aimed at lowering prescription drug prices and boosting the renewable-energy sector. The bill also imposes new taxes on large corporations to reduce the federal deficit. Photo: Mandel Ngan/AFP/Getty Images

Write to Mauro Orru at mauro.orru@wsj.com

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