Novartis announced today that it intends to separate Sandoz into a new, publicly traded standalone company through a 100% spinoff.
The spinoff of the generics and biosimilars division of Novartis aims to maximize shareholder value by creating the top European generics company and a global leader in biosimilars, according to a news release. Such a move would allow Novartis shareholders to participate fully in the potential future upside for both Sandoz and Novartis Innovative Medicines, the company said.
Novartis said that its Innovative Medicines and Sandoz businesses would enable enhanced focus and the ability to pursue independent growth strategies through the spinoff.
The company expects Sandoz — which would be headquartered in Switzerland and listed on the SIX Swiss Exchange, with an American Depositary Receipt (ADR) program in the U.S. — to deliver its “next wave of growth” based on its existing biosimilars pipeline of more than 15 molecules, a strong and experienced management team and organization.
“Our strategic review examined all options for Sandoz and concluded that a 100% spin-off is in the best interest of shareholders,” Novartis Board Chair Joerg Reinhardt said in the release. “A spin-off would allow our shareholders to benefit from the potential future successes of a more focused Novartis and a standalone Sandoz, and would offer differentiated and clear investment theses for the individual businesses. Sandoz would become the publicly traded #1 European generics company and a global leader in biosimilars based in Switzerland.”
Novartis, meanwhile, intends to become focused on its innovative medicines with a “stronger financial profile,” as well as an improved return on capital.
“For Novartis, the separation of Sandoz would further support our strategy of building a focused innovative medicines company, with depth in five core therapeutic areas, and strength in technology platforms,” said CEO Dr. Vas Narasimhan. “In addition, both companies would be able to focus on maximizing value creation for their shareholders by prioritizing capital and resource allocation, employing separate capital structure policies, and increasing management focus on their respective business needs.”