Novartis announces strategic review of its generics and biosimilars unit after reporting Q3 results.
The Swiss pharmaceutical company Novartis has initiated the review of their Sandoz Division. The news was announced along with the release of Novartis’ third quarter earnings. Sandoz is known for being the pioneer of biosimilars and generics in the pharmaceutical industry, the company has pharmaceutical products in all main therapeutic areas. On Tuesday 26 October 2021, Vas Narasimhan, chief executive officer of Novartis announced that, “The review will explore all options, ranging from retaining the business to separation, in order to determine how to best maximise value for our shareholders.” The company is expecting to share news from their review by December 2022. Though Sandoz accomplished $9.7 billion sales in 2020, Novartis stated that they are anticipating the operating income to drop faster than initially predicated this year.
Narasimhan added that Novartis has been planning on making Sandoz “more autonomous” and this includes the company’s manufacturing. Novartis had previously tried to sell off the United States division in 2018 to Aurobindo, a pharmaceutical manufacturing company. The transaction was not successful as the US Federal Trade Commission did not approve the deal. Novartis could not guarantee whether they planned on selling Sandoz to one of their competitors or whether the company would be floated on the stock exchange. Nonetheless, the group hit a 6% (cc) growth in their third quarter sales though Sandoz experienced a 1% drop in net sales from $2.42 billion reported for the same period last year. The pharma giant stated that the continuous pricing pressures resulted in the decline of sales.