Half of Sandoz’s revenue comes from Europe. Thus, it will be looking to leverage its brand presence in Europe for further growth.
Emerging reports suggest that Novartis has completed the spinoff of its Generics and Biosimilars division, Sandoz, on Wednesday, October 4.
The Swiss drug company first made its intention known in August 2022, commencing a strategic review to determine the fate of Sandoz. The review revealed a 100% spinoff was in the best interest of shareholders. Following that, Novartis shareholders approved this plan at the company’s Extraordinary General Meeting held in September.
Joerg Reinhardt, Chair of the Board of Directors of Novartis believes the step will allow both companies to optimize management focus and allocate capital on business priorities.
Novartis Priming for a Change with Sandoz Spinoff
CEO of Novartis International, Vasant Narasimhan highlighted the historicity of the moment for both companies. He noted that the spinoff was a culmination of the management’s effort in six years to reposition Novartis as a pure-play innovative medicines company.
“We exited consumer health to create one of the largest consumer health companies, exited Alcon in the largest public market spin in European capital markets, we exited our Roche stake”, told Narasimhan. With the spinoff complete, Novartis will now focus on R&D and bringing new medicinal products to markets around the world.
Following the announcement, the shares of the company climbed more than 3% in early trade in Zurich. Novartis also expects to grow its sales and core operating income.
Sandoz to Build on Growth Momentum
Meanwhile, Sandoz has a strong brand position in Biosimilars and Generics medicine. In 2021, it generated $9.6bn in sales across 100 markets. It has also continued to grow its sales quarterly.
Narasimhan expressed confidence in Sandoz’s ability. He said:
“With several consecutive quarters of sales growth, Sandoz starts out from a position of strength as a global leader in Generics and Biosimilars.”
Sandoz CEO Richard Saynor agrees with this, stating that the company has a broad aim to build on its sales momentum over the last seven quarters.
“By becoming an independent company, we can focus on how we grow that business, bring more products to patients and continue to build on the momentum that we’ve created over the last couple of years,” he added.
Already, half of Sandoz’s revenue comes from Europe. Thus, it will be looking to leverage its brand presence in Europe for further growth. Jefferies analysts have valued the Sandoz listing at between $12.3 billion and $16.2 billion.
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