Aurobindo to buy Sandoz dermatology, generic oral solids units
Novartis has agreed to sell selected portions of its Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solids portfolio, to Aurobindo Pharma USA in a $1 billion deal made up of $900 million in cash plus $100 million in potential earn-outs. Novartis said the sale is meant to support Sandoz's strategy of focusing on complex generics, value-added medicines and biosimilars to drive growth.
The Sandoz US portfolios to be sold to Aurobindo include approximately 300 products, as well as additional development projects. The sale includes the Sandoz US generic and branded dermatology businesses as well as its dermatology development center. As part of the transaction, Aurobindo will acquire the manufacturing facilities in Wilson, NC, as well as Hicksville and Melville, NY. The business had net sales of $600 million in the first half of 2018.
"Sharpening our portfolio focus in the United States allows us to devote more time and resources toward our strategy of bringing complex generics, value-added medicines and biosimilars to patients in the US, creating higher value and opening up access to important medicines where alternatives are truly needed," Sandoz CEO and member of the Novartis executive committee Richard Francis said. “Through this transaction, we are refocusing our business, but also striving to ensure continuity of supply of important long-used generic medicines for patients and customers in the United States.”
As part of the agreement, approximately 750 employees in Hicksville, Melville, Wilson and Princeton, N.J., as well as the field representatives for the PharmaDerm branded dermatology business, are expected to transfer to Aurobindo upon closing. "We recognize that the transfer of ownership for a business of this size is a complex process, and we are aware that it may create some uncertainties for our associates in the U.S. It is thus a priority for us to make the transition as clear and quick as possible,” Sandoz president and head of Sandoz North America Carol Lynch said.
Following the transaction, the Sandoz US portfolio will continue to be substantial, and will include biosimilars, value-added medicines and such complex generics as injectables, respiratory and ophthalmics, according to the company. Sandoz will continue to focus its clinical development, business development and investment efforts on these areas.