Sandoz, Novartis Subsidiary, Begins Trading at 24 Swiss Francs After Spinoff

Swiss pharmaceutical giant Novartis has successfully completed the spinoff of its generics and biosimilar business, Sandoz. The newly independent Sandoz commenced trading on the SIX Swiss Exchange, with shares opening at 24 Swiss francs. Novartis had announced its plans to spin off Sandoz in August, offering stakeholders one Sandoz share for every five Novartis shares through a dividend-in-kind distribution.

Over the past six years, Novartis has strategically positioned itself as a “pure play innovative medicines company” through various transactions totaling over $100 billion. The spinoff of Sandoz is a significant step in this transformation, allowing Novartis to concentrate on its core focus of innovative medicines and research and development efforts.

Vas Narasimhan, CEO of Novartis, emphasized the company’s commitment to being a leader in the field of innovative medicines. Novartis shares witnessed a more than 3% increase in early trade in Zurich following the spinoff.

Sandoz CEO Richard Saynor highlighted the spinoff’s strategic benefits, allowing Sandoz to sharpen its focus as the world’s largest generics and biosimilars company. The move provides Sandoz with independence to pursue its growth strategy, which includes a robust pipeline of 25 biologics projects, with five slated for launch in the next two years.

Sandoz, now an independent entity, aims to build on its sales momentum, expand profit margins, and drive free cash flows. With around half of its revenues originating from Europe, Sandoz sees ample opportunities for growth in the region. The company has heavily invested in its biologics pipeline, anticipating around $3 billion in sales from new projects, with a significant contribution expected from biosimilars.

This strategic move is deemed a historic moment for both Novartis and Sandoz, signaling a new chapter for each as they pursue their distinct paths as independent entities.