Sector News

Novo Nordisk joins pharma’s IPO clique with plans for tech subsidiary spinoff

February 10, 2015
Life sciences
It’s official: Novo Nordisk has joined the spinoff club. The Danish drugmaker says it’s ready to let its information technology unit, NNIT, go solo via an initial public offering.
Few details are available at the moment; Novo Nordisk announced the decision in a bare-bones press release. The company says it will take place in 4-5 weeks, but won’t say how big the offering might be. What’s certain is that it’s another example of a drugmaker sharpening its focus by hiving off subsidiaries and business units.
Novo has been weighing the prospect since last January, when the company named a new CFO for NNIT, Carsten Krogsgaard Thomsen, and charged him with reviewing a spinoff. In March, Novo hired Morgan Stanley and Danske Bank to advise on the potential offering. The questions were the usual ones: Could hiving off NNIT “create value”? Would NNIT be better off on its own?
Independence might make it easier for NNIT to compete for clients. NNIT brought in about 2.2 billion kroner in 2013, or about $404 million, and external customers have accounted for an increasing share of those sales. For 2014, that share was expected to be about 50%. That’s one reason why Novo was looking at a stock offering, Thomsen said last year.
“An IPO will provide the company with improved access to the capital markets and stronger brand recognition, among other benefits,” NNIT said in a separate press release (as quoted by Reuters).
The IT unit has been edging its way toward solo status for years. Novo Nordisk formally set NNIT aside in an independent, wholly owned subsidiary back in 1998. Last year’s sales amounted to 2.4 billion kroner.
Novo’s is the second spinoff announcement so far this year. Last week, GlaxoSmithKline said it was moving toward an IPO for its HIV joint venture, ViiV Healthcare, and would decide for certain by midyear. That would be a much bigger deal; with its £1.5 billion in 2014 sales, analysts see ViiV valued at £12 billion to £18 billion ($18 billion to $27 billion). 
By Tracy Staton

3 responses to “Novo Nordisk joins pharma’s IPO clique with plans for tech subsidiary spinoff

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

January 17, 2021

SII expects WHO emergency approval of Covid-19 vaccine soon

Life sciences

The Serum Institute of India (SII) expects to soon receive World Health Organisation (WHO) emergency use authorisation for the Oxford University/AstraZeneca Covid-19 vaccine, produced for mid and low-income countries.

January 17, 2021

Sanofi to acquire clinical-stage biopharma firm Kymab for $1.45bn

Life sciences

According to the deal, Sanofi will gain full global rights to Kymab’s fully human monoclonal antibody, KY1005 that attaches to OX40-Ligand and can potentially treat various immune-mediated diseases and inflammatory ailments.

January 17, 2021

Moderna poaches Amgen vet as CCO, jump-starting commercial team as it rolls out COVID-19 vaccine

Life sciences

Moderna tapped veteran Amgen executive Corinne Le Goff to spearhead that effort as chief commercial officer.

Send this to a friend