Sandoz Spin-off Gets Green Light from Novartis Board

On Jul 18, 2023, Novartis announced in its 2023 second quarter (Q2) earnings that its board of directors has unanimously endorsed the 100% spin-off of Sandoz, the company’s generics and biosimilars division, into a standalone, publicly traded entity. Novartis had previously announced its intent to separate the Sandoz business in August 2022 (1). The proposed spin-off is expected to happen early in the 2023 fourth quarter.

According to a company press release, the next step involves Novartis shareholders voting on the proposed spin-off and a related reduction of the share capital of Novartis AG at a general meeting planned on Sept. 15, 2023. The plan is for Sandoz to be listed on the SIX Swiss Exchange, with an American Depositary Receipt program in the United States.

Novartis reported in its Q2 earnings that Sandoz sales grew 8% for the quarter, with net sales of $2.4 billion. Growth was primarily driven by Europe, which totaled $1.3 billion. Global sales of biosimilars grew 13% to $531 million for the quarter.

According to Novartis’ Q2 earnings release, the spin-off of Sandoz is part of the company’s new strategy to transform itself into a “pure-play” innovative medicines business. It will now focus on five core therapeutic areas: cardiovascular, immunology, neuroscience, solid tumors, and hematology. The company also intends to prioritize three emerging technology platforms for cell and gene therapy, radioligand therapy, and xRNA (i.e., ribonucleosides). The company plans to prioritize continued investment into R&D capabilities and manufacturing scale for these three platforms.

Reference

1. Novartis, Novartis Announces Intention to Separate Sandoz Business to Create a Standalone Company by Way of a 100% Spin-Off. Press Release, Aug. 25, 2022.

Source: Novartis