Sector News

Novartis looks at offloading its generic pills business in U.S.

December 5, 2017
Life sciences

The market for generic pills has gotten so bad in the U.S. that Novartis is thinking about selling off its oral solids business there, outgoing CEO Joseph Jimenez has told analysts.

The question of whether the Swiss drugmaker would ever spin off its Sandoz generics business came up during a conversation that Bernstein analysts had last week with Jimenez and drug development chief Vas Narasimhan, who will take over as CEO Feb. 1.

The CEO said that Novartis still likes the generics business outside the U.S., where he said biosimilars have given Sandoz a leading position, but it is thinking about exiting the oral solids portion of this business in the U.S. as that market continues to deteriorate, Bernstein analyst Tim Anderson recounted for clients in a note today.

“So we are examining our options, inclusive of a spin,” Jimenez told the analyst.

The company could did not respond to a request for comment.

Given that the price erosion looks to continue for some time, Sandoz is concentrating on biosimilars and complex generics, where product differentiation can provide some pricing leverage, Peter Goldschmidt, president of Sandoz U.S. and head of North America for the Swiss drugmaker said last week in his own conversation with analysts.

Generic makers across the board have been badly battered by the effects of several years of cut-throat pricing that has some drugmakers reportedly selling products at cost, leading some like Teva into major restructurings.

For Novartis, the price competition translated into a 13% generic sales decline in the U.S. in the third quarter. Sandoz reported sales of $2.6 billion, up up 1% in constant currencies, which were salvaged by 9% growth in the rest of the world.

Novartis hinted it was looking at such a move a couple of months ago when it said it would close a 450-employee generics API plant in Broomfield, Colorado.

“Novartis is currently experiencing above-average pricing pressure in our U.S. portfolio. With several products no longer competitive in saturated markets, we have made the decision to discontinue or divest these limited growth products to optimize our product portfolio,” the spokesman said at the time.

By Eric Palmer

Source: Fierce Pharma

comments closed

Related News

November 27, 2022

DSM-Firmenich nutrition and beauty mega-merger edges closer as companies announce Exchange Offer

Life sciences

The new company will have four complementary businesses: Perfumery & Beauty, Food & Beverage/Taste & Beyond, Health, Nutrition & Care and Animal Nutrition & Health, each with strong market positions and expertise to address emerging consumer trends. The businesses will also prioritize environmental sustainability, health and well-being.

November 27, 2022

Merck agrees to acquire Imago for $1.35bn

Life sciences

Merck (MSD) has signed a definitive agreement for the acquisition of all outstanding shares of Imago BioSciences for a total equity price of nearly $1.35bn. A clinical-stage biopharmaceutical firm, Imago focuses on the development of new therapies to treat myeloproliferative neoplasms (MPNs) and other bone marrow ailments.

November 27, 2022

Novo Nordisk expands API capacity

Life sciences

Danish pharma Novo Nordisk has announced plans to invest 5.4 billion Danish kroner to expand its existing facilities in Bagsværd. The project will establish extra R&D capacity for manufacturing APIs to supply the company’s global clinical trials for oral and injectable products. The expansion is expected to be finished in 2024, creating about 160 new jobs.