Novartis announces to sell Sandoz US portfolio and US oral solids to Aurobindo Pharma

Pharma major Novartis on

Thursday announced it agreed to sell selected portions of its

Sandoz US portfolio, specifically the Sandoz US dermatology

business and generic US oral solids portfolio, to Aurobindo

Pharma USA Inc, for USD 900 million of cash plus USD 0.1

billion of potential earn-outs.

According to a press release issued by the company,

the Sandoz US portfolios to be sold to Aurobindo include

approximately 300 products, as well as additional development

projects.

The sale includes the Sandoz US generic and branded

dermatology businesses as well as its dermatology development

centre.

"As part of the transaction, Aurobindo will acquire

the manufacturing facilities in Wilson, North Carolina, as

well as Hicksville and Melville, New York. The business had

net sales of USD 0.6 billion in H1, 2018," it said.

As part of the agreement, approximately 750 employees

in Hicksville, Melville, Wilson and Princeton, New Jersey, as

well as the field representatives for the PharmaDerm branded

dermatology business, are expected to transfer to Aurobindo

upon closing, Novartis said.

Aurobindo Pharma Managing Director, N Govindarajan, in

a separate press release said the acquisition is in line with

the company's strategy to grow and diversify business in the

US.

"Acquiring these businesses from Sandoz will allow us

to further expand our product offering and to become a leading

player in the generic dermatology market," he added.

Overall the transaction will position Aurobindo as the

2nd largest dermatology player and the 2nd largest generics

company in the US by prescriptions, he said.

"We expect a seamless integration of the acquired

businesses with the rest of the Aurobindo group given the

success we have achieved in our acquisitions to date," he

added.

"As we have done in some of our previous

acquisitions, we will be focused on leveraging our group's

market leading vertically integrated and highly efficient

manufacturing base to enhance the market position and

medium-term profitability of the businesses we are acquiring,"

Govindarajan said.

The transaction is expected to close in the course of

2019 following the completion of customary closing conditions,

including US Federal Trade Commission clearance, a press

release from Aurobindo said.

Aurobindo shares are trading at Rs 735.80 apiece, up

5.70 per cent over previous close on BSE at 1315 hrs.