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Novartis aims for October spin-off of Sandoz unit

Picture of a building with sign saying Sandoz and Novartis
Novartis shareholders will vote the decision at an extraordinary general meeting on September 15. © Keystone / Urs Flueeler

The Swiss pharma giant plans to offload its generics unit on or around October 4, it said on Friday. Shareholders will receive one Sandoz share for every five Novartis shares held.

Novartis shareholders will vote on the details of the plan at an extraordinary general meeting (EGM) on September 15, a year after the Basel-based firm announced its plans to split Sandoz into a separate entity, ReutersExternal link and other media reported on Friday.

“If Novartis shareholders approve the proposed special distribution at the EGM, the spin-off will be implemented through the distribution of a dividend-in-kind of Sandoz shares to Novartis shareholders, and of Sandoz ADRs (American Depositary Receipts) to Novartis ADR holders,” the company said in a statement.

+ Read more: Novartis sets sights on high-value medicines and US market

The Swiss drugmaker’s plan to separate out its generic drug unit Sandoz is aimed at focusing on the production of more lucrative patent medicines. In 2021, following mounting pricing pressures in the US off-patent medicines sector, Sandoz was put under a strategic review by Novartis CEO Vas Narasimhan.

The generics unit accounted for around 10% of Novartis’ core operating profit of $16.7 billion (CHF14.6 billion) in 2022 and the drug company is now planning to divest almost one-fifth of its business in terms of sales.

+ Read more: Swiss pharma reckons with its past, present and futureExternal link

Last year Sandoz sales rose by 4% to $9.25 billion, and are are expected to continue growing by a mid-single-digit percentage annually until 2028.

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