Home Business Novartis unit Sandoz starts trading at 24 Swiss francs after completing spinoff

Novartis unit Sandoz starts trading at 24 Swiss francs after completing spinoff

by Mark Mendoza

Novartis, the Swiss drugmaker, has completed the spinoff of its generics and biosimilars business, Sandoz. Sandoz shares began trading at 24 Swiss francs on the SIX Swiss Exchange. This move comes after Novartis announced its intention to spin off the business in August, offering stakeholders one Sandoz share for every five Novartis shares through a dividend-in-kind distribution.

Novartis CEO, Vasant Narasimhan, stated that the company had been working to focus Novartis as a “pure play innovative medicines company” over the past six years. By divesting other businesses such as consumer health and Alcon, the company has been able to streamline its operations and concentrate on its core pharmaceutical business. The spinoff of Sandoz is the latest step in this focused strategy, leaving Novartis as a company solely dedicated to developing and bringing new medicines to markets around the world.

The completion of the spinoff has been seen as a positive move by investors, as Novartis shares climbed more than 3% in early trade in Zurich. This increase also contributed to a rise in the pan-European Stoxx 600 index.

Narasimhan also reiterated Novartis’s full-year guidance, expecting sales to grow in a high single-digit percentage and core operating income to grow in the low double digits to mid-teens.

The spinoff of Sandoz gives the subsidiary the opportunity to focus on its own strategy. Sandoz CEO, Richard Saynor, highlighted the company’s pipeline of 25 biologics projects, with five more set to launch over the next two years. Saynor emphasized the importance of focus for Sandoz as it grows its business and brings more products to patients. He also mentioned that around half of Sandoz’s revenues come from Europe, providing a strong base for future growth.

Analysts have valued the Sandoz listing at between $12.3 billion and $16.2 billion as it begins trading as an independent company. With a track record of sales growth and a strong position in the generics and biosimilars market, Sandoz is poised to make a significant impact.

The completion of the spinoff marks a historic moment for both Novartis and Sandoz as they embark on their journeys as independent companies. It represents a strategic move for Novartis to sharpen its focus and consolidate its position as a leading player in the innovative medicines sector. At the same time, Sandoz has the opportunity to further strengthen its position in the generics and biosimilars market and drive future growth through its robust pipeline of biologics projects.

Overall, the completion of the spinoff is seen as a positive step for both companies, allowing them to focus on their respective strengths and pursue independent growth strategies. As they begin this new chapter, Novartis and Sandoz are well-positioned to make further advancements in the pharmaceutical industry and continue delivering innovative solutions to patients worldwide.

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