By Adria Calatayud
Novartis said the planned spinoff of its Sandoz unit is expected to occur in early October, ending an era for the Swiss pharmaceutical giant in which generic and prescription drugs businesses coexisted under the same roof.
Sandoz, which focuses on generic drugs and biosimilars, is expected to start trading as a standalone company on the SIX Swiss Exchange on or around Oct. 4, according to a listing prospectus published Friday. Sandoz will also have an American depositary receipt–or ADR–program in the U.S.
The listing of Sandoz would culminate a separation process that Novartis launched last year in a bid to sharpen its focus on innovative prescription medicines, following similar moves from industry peers in recent years.
Novartis said the separation will take place through a proposed distribution of Sandoz shares to its existing shareholders. Novartis shareholders will get one Sandoz share for every five Novartis shares held and one Sandoz ADR for every five Novartis ADRs, the company said.
The Sandoz spinoff remains subject to approval by Novartis’s shareholders. Novartis has scheduled an extraordinary general meeting for Sept. 15 to vote on the proposed distribution of Sandoz shares and a reduction in its own share capital in connection with the spinoff, it said.
Novartis had previously said it expected the spinoff to happen early in the fourth quarter.
Sandoz generated pro forma total net sales of $9.12 billion and made a net profit of $677 million last year, according to its listing prospectus. Novartis said it intends to publish Sandoz’s financial statements for the first half of 2023 in early September.
After the spinoff, Sandoz will remain dependent on Novartis for technical development and manufacturing for a significant time, according to its listing prospectus.
The companies will enter into development-collaboration and manufacturing-and-supply agreements, under which Novartis will support the development of certain Sandoz biosimilar assets for five years initially and provide commercial manufacture, supply of certain biosimilar products for the first ten years after the spinoff, Sandoz said in the prospectus.
Write to Adria Calatayud at [email protected]
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