Novartis has announced that the planned spinoff of its Sandoz unit is expected to take place in early October. This move will mark the end of an era for the Swiss pharmaceutical giant, as it separates its generic and prescription drugs businesses.
Sandoz, which specializes in generic drugs and biosimilars, is set to begin trading as an independent company on the SIX Swiss Exchange on or around October 4th. Additionally, Sandoz will establish an American depositary receipt (ADR) program in the United States.
The listing of Sandoz will be the culmination of a separation process initiated by Novartis last year. This strategic decision aims to further concentrate Novartis on its innovative prescription medicines, following a similar trend among industry peers in recent times.
Novartis plans to carry out the separation through a proposed distribution of Sandoz shares to its existing shareholders. For every five Novartis shares held, shareholders will receive one Sandoz share, along with one Sandoz ADR for every five Novartis ADRs.
Novartis Shareholders to Vote on Sandoz Spinoff
Novartis, a leading pharmaceutical company, has announced an upcoming extraordinary general meeting on September 15. The purpose of this meeting is to obtain approval from shareholders for the proposed distribution of Sandoz shares and a reduction in Novartis's own share capital, in connection with the anticipated spinoff.
The spinoff is expected to take place early in the fourth quarter, according to Novartis. Sandoz, a subsidiary of Novartis, reported impressive financial results in its listing prospectus. With pro forma total net sales reaching $9.12 billion and a net profit of $677 million in the previous year, Sandoz demonstrates its strong market presence.
While the spinoff will grant Sandoz a level of independence, the company will continue to rely on Novartis for technical development and manufacturing for an extended period. To ensure a smooth transition, both companies have agreed to enter into development-collaboration and manufacturing-and-supply agreements. These agreements stipulate that Novartis will support the development of select Sandoz biosimilar assets for an initial period of five years. Additionally, Novartis will provide commercial manufacture and supply of specific biosimilar products for the first ten years following the spinoff.
In early September, Novartis plans to release Sandoz's financial statements for the first half of 2023. This will provide further insight into Sandoz's performance and growth potential.
The anticipated spinoff represents an exciting new chapter for Sandoz and underscores Novartis's commitment to fostering innovation and collaboration within the pharmaceutical industry.
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