Novartis plans on making Sandoz a standalone company!

Source: EquityPandit

As per recent reports, Novartis on Thursday is known to have announced its intention to simply separate Sandoz, its generics as well as biosimilar division into a new publicly traded standalone company, by way of a 100 percent spin-off.

In addition to this, according to the company’s latest press statement, a spin-off is said to be focused on entirely maximizing shareholders’ value by simply creating the European generics company and a global leader in biosimilars, thus allowing Novartis shareholders to participate fully in the potential future upside for both Novartis innovate medicines as well as Sandoz of course.

“For both the Innovative Medicines and Sandoz businesses, the spin-off would enable enhanced focus and the ability to pursue independent growth strategies. Sandoz is expected to deliver its next wave of growth based on the existing biosimilar pipeline of 15+ molecules, a strong and experienced management team, and organization. Novartis aims to become a focused innovative medicines company with a stronger financial profile, and improved return on capital,” the company said in a statement on Thursday.

On a similar note, it is also worth noting that, the pharma major is also said to have informed the standalone Sandoz would be headquartered in Switzerland and will be listed on the Six Swiss Exchanges, with an American Depository Receipt (ADR) program in the US.

“Our strategic review examined all options for Sandoz and concluded that a 100% spin-off is in the best interest of shareholders. 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 individual businesses. Sandoz would become the publicly traded #1 European generics company and a global leader in biosimilars based in Switzerland,” Joerg Reinhardt, Chair of the Board of Directors of Novartis, said in a statement.

Source: SeekPNG

Other than this, Novartis is also said to have announced that it will continue expanding its strong position in five core therapeutic areas like Neuroscience and Cardiovascular, a balanced geographic footprint as well as strength in technology platforms.

“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. 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,” Vas Narasimhan M.D., CEO of Novartis, said in a statement.

As noted in a report by the financial express, Last year, Sandoz generated USD 9.6 Billion in sales in 2021 sales and served over 100 markets globally with a strong presence in Europe as well as in the United States and the Rest of the World, it claimed.

Reading so far, I hope you must have gotten a fair insight into Novartis separating Sandoz business to create a standalone company, and by now I believe you will be able to decide on your own whether or not you think it was the right thing to do and whether or not you think will be their next move.

In conclusion, what are your thoughts on Novartis seperating Sandoz business to create a standalone company? Do let us know in the comments area below. To know more about such reports, do check out other articles we have on our website. Thank you for your time & if you found our content informative, do share it with your investor friends!

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