Novartis last month announced its intention to spin off its underperforming generics and biosimilars business Sandoz into a new, publicly traded, stand alone company.
The move is intended to increase shareholder value by establishing a top European generics firm and a leader in biosimilars – cheap versions of biologic drugs made from living organisms – internationally.
According to Novartis, Sandoz – which last year generated nearly $10 billion in sales of generics and biosimilars, will emerge as Europe’s leading generics company. Meanwhile, Novartis aims to become a dedicated, innovative pharmaceutical company with a stronger financial profile and a higher return on equity.
The move will allow Novartis shareholders to participate fully in the potential future upside for both Sandoz and Novartis Innovative Medicines. It will also enhance focus and enable independent growth strategies.
The transaction is expected to be completed in the second half of next year subject to market conditions, tax rulings, final board endorsement and shareholder approval.
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