The Swiss pharmaceutical company Novartis is taking the last big step in its almost ten-year-long corporate restructuring seriously: the generics subsidiary Sandoz is to be spun off on October 4 via a listing on the Swiss stock exchange SIX, as the drug manufacturer from Basel announced on Friday. With a market value of CHF 40 billion, Sandoz is likely to be the largest newcomer to the Swiss stock exchange in many years. The value, which is only theoretical for the time being and could still fall after the start of trading, results from the exchange ratio: Novartis shareholders receive one Sandoz share for every five existing titles.
With the separation from the comparatively low-margin business with generic medicines and biosimilars, Novartis is driving forward its focus on the lucrative area with patent-protected medicines. In terms of sales, the group wants to sell almost a fifth of its business. One analyst said he previously expected Sandoz to be worth between 16 and 20 billion francs. “I can’t explain the discrepancy to the value that Novartis estimates.” However, before Sandoz can be traded on the trading floor, Novartis still has to overcome several hurdles. Shareholders must give the go-ahead for the spin-off at an extraordinary general meeting on September 15. In addition, the authorities must give the go-ahead for the stock exchange listing.
Sandoz is projected to be the highest-rated pure-play generic drug maker in the world. The US competitor Viatris has a market capitalization of almost 14 billion dollars, the Israeli Teva – mother of the German pharmaceutical company Ratiopharm – around 10 billion dollars. In terms of sales, Teva is the largest manufacturer of off-patent drugs, followed by Sandoz and Viatris.