Pay based on use Get Started Purchase a Team or Enterprise subscription for per week You will be billed per month after the trial ends<doc-sep>Novartis AG said on Thursday it would sell the dermatology and generic US oral solids portfolios of Sandoz US to Aurobindo Pharma Ltd for $900 million, as the Swiss drug maker looks to focus on higher growth areas. The deal also includes about 300 products and additional development projects of Sandoz and an additional $100 million in performance-based payments, Novartis said. The 131-year-old Sandoz unit was hurt by price pressure in the United States, prompting Novartis chief executive officer Vas Narasimhan to sell the Sandoz unit. He has so far said Sandoz businesses elsewhere remain core parts of Novartis. Mr Narasimhan is also keeping Sandoz biosimilars business - less-expensive near copies of complex biological medicines whose patents have expired - on hopes that rising demand from cash-strapped governments and insurers seeking to contain costs will help Sandoz boost its margins. Novartis had earlier this year expressed its intention to sell the Sandoz unit after reporting disappointing sales form the unit. "Through this transaction, we are refocusing our business but also striving to ensure continuity of supply of important long-used generic medicines for patients and customers in the US," said Richard Francis, Sandoz chief executive. Following the transaction, the Sandoz US portfolio will continue to be substantial, and will include biosimilars, value-added medicines and complex generics such as injectables, respiratory and ophthalmics, the company said. "Overall the transaction will position Aurobindo as the 2nd largest dermatology player and the 2nd largest generics company in the US by prescriptions," said N. Govindarajan, managing director of Aurobindo Pharma. As part of the transaction, Aurobindo Pharma USA Inc, a unit of the Hyderabad, India-based company, will acquire the plants in Wilson, North Carolina, as well as Hicksville and Melville, New York, Novartis said. About 750 employees as well as the field representatives for the PharmaDerm branded dermatology business are expected to transfer to Aurobindo upon closing, Novartis said. © Thomson Reuters 2018<doc-sep>ZURICH/BENGALURU (Reuters) - New Novartis Chief Executive Vas Narasimhan has further reshaped the Swiss drugmaker, announcing on Thursday he is selling U.S. dermatology and generic pill assets to India’s Aurobindo Pharma Ltd for up to $1 billion. Logo of Swiss drugmaker Novartis is seen at its branch in Schweizerhalle near Basel, Switzerland, March 29, 2018. REUTERS/Arnd Wiegmann The deal, which comes after price pressure hurt the U.S. pills business, includes some 300 products. An initial $900 million cash payment could be followed by $100 million in performance-based payments to the Basel-based drugmaker. Novartis said the transaction will result in a roughly $70 million impairment, to be confirmed when it releases third-quarter results in October. This deal has been in the works for months but some analysts said Aurobindo was paying less than they had penciled in for the assets. Shares in Aurobindo rose 9 percent on the news, while Novartis stock closed down about 1 percent. "The acquisition announced today is in line with our strategy to grow and diversify our business in the U.S.," said N Govindarajan, managing director of Aurobindo, adding the deal will make it the second-largest U.S. generics maker by prescriptions. bit.ly/2MRmXqA Aurobindo will get plants in Wilson, North Carolina, as well as in Hicksville and Melville, New York, Novartis said. Around 750 employees as well as field representatives from the PharmaDerm branded dermatology business are expected to transfer to Aurobindo. Narasimhan, who became CEO on Feb. 1, has pushed ahead with efforts to slim down Novartis that began under his predecessor, Joe Jimenez, to focus on higher-margin drugs. He sold a consumer health joint venture to GlaxoSmithKline this year for $13 billion and plans to spin off his Alcon eyecare unit in 2019. The U.S. Sandoz pills business has long been a problem child for Novartis, with price pressure hurting results and becoming a main reason the division has pared back its growth targets, most recently in July. “Through this transaction, we are refocusing our business,” said Richard Francis, the Sandoz division head, adding the disposal would allow him to focus on products such as biosimilars, or near-copies of rival’s biological drug blockbusters whose patents have expired. Analyst Stefan Schneider at Swiss bank Vontobel said the lackluster $900 million up-front price showed just how deep the U.S. pills business and dermatology assets had fallen. “We had assumed a price of 1 times sales for such a transaction,” Schneider said. “We realize that pricing pressure in the U.S. generics market is greater that we had anticipated, as last year’s revenues were $1.5 billion for this business and first-half 2018 revenues only $0.6 billion.” He has a “hold” rating on the shares. Narasimhan, a U.S. citizen and Harvard-trained doctor, has so far said that Sandoz businesses elsewhere including in Europe remain core parts of Novartis. Overall, Sandoz had nearly $5 billion in sales in the first half. Following this transaction, the Sandoz U.S. portfolio will include biosimilars as well as complex generics such as its Glatopa copy of Teva’s Copaxone medicine for relapsing multiple sclerosis.<doc-sep>New Delhi: Aurobindo Pharma Ltd has agreed to buy the dermatology business and three manufacturing units of Sandoz, the generics unit of Swiss drug maker Novartis, for as much as $1 billion, the Indian company said, in a deal that makes it the second-largest maker of generic prescription drugs in the US. An initial $900 million cash payment to the Basel-based Novartis could be followed by $100 million in performance-based payments. Aurobindo will finance the deal through a fully committed debt facility. The acquired business had sales of $1.2 billion in 2017. The transaction, the largest outbound pharma deal by an Indian company, includes a portfolio of oral solid products, along with its commercial and manufacturing infrastructure, Aurobindo Pharma said in a statement on Thursday. The transaction will catapult Aurobindo to the second position in the dermatological drugs segment as well as the second-largest generics company in the US by prescriptions, said N. Govindarajan, managing director of Aurobindo Pharma. “Acquiring these businesses from Sandoz will allow us to expand our product offering and become a leading player in the generic dermatology market," Govindarajan 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." This is the second overseas acquisition by Aurobindo in less than two years. In January 2017, it had agreed to buy Portugal’s Generis Farmacêutica SA from Magnum Capital Partners for €135 million. Mint was the first to report on the Sandoz transaction on 7 May. The report said Aurobindo was the only Indian bidder for Novartis’s assets. The transaction also drew interest from several global private equity players, as well as strategic bidders. “The acquisition will add approximately 300 products, including projects in development, as well as commercial and manufacturing capabilities in the US," the company said. Novartis chief executive Vas Narasimhan, who took over the reins of the Swiss drug maker on 1 February, plans to focus on higher-margin drugs. Aurobindo’s acquired generic dermatology portfolio will include a wide range of therapeutic areas, including topical antibiotics, gynaecological and dermatological anti-fungal agents, anti-acne agents, local anaesthetic analgesics, anti-itch, and a dermatological chemotherapeutic agent. The oral non-dermatological portfolio, which is being acquired, spans a wide range of therapeutic areas, including autoimmune disease, antineoplastic agents and hormonal agents. The previous largest outbound deal by an Indian company in the pharma segment was the acquisition of Gavis Pharmaceuticals Llc and Novel Laboratories by Lupin Ltd for $880 million in 2015. In 2016, Aurobindo unsuccessfully bid for Teva’s Actavis UK Ltd and Actavis Ireland Ltd units. It was pipped to the post by domestic rival Intas Pharmaceuticals Ltd, which paid close to £600 million (around ₹ 5,000 crore) to bag the deal. Other notable transactions in the outbound pharma space in recent years include Cipla Ltd’s acquisition of three products from Teva in the US. In November 2016, Aurobindo Pharma had also acquired a few products from Teva’s France portfolio. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.<doc-sep>
Aurobindo Pharma Ltd has signed a definitive agreement to acquire certain assets from Sandoz Inc, USA , a Novartis division for a consideration of $0.9 billion ($900 million). The proposed acquisition comprises dermatology business and a portfolio of oral solid products along with commercial and manufacturing infrastructure in the US. The acquisition will be on debt-free and cash-free basis and will be made through its wholly owned subsidiary. Aurobindo’s scrip gained 4.15 per cent after opening of trade on the Bombay Stock Exchange on Thursday and was trading at Rs 725 at 10 am today. Second largest dermatology player "The acquisition announced today is in line with our strategy to grow and diversify our 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,’’ N Govindarajan, Managing Director of Aurobindo Pharma, said in a release issued here on Thursday. Overall, the transaction will position Aurobindo as the second largest dermatology player and the second largest generics company in the US by prescriptions. "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," he said. Aurobindo Pharma USA Inc and Sandoz will enter into a transitional services agreement to support the ongoing growth plans of the businesses being acquired by the Indian company. What the deal includes Acquisition will include in-line portfolio of dermatology and oral solids, authorised generics and in-licensing products, branded dermatology products, three manufacturing facilities at Hicksville, Melville and Wilson and 100 per cent shareholding in Eon Labs Inc, a wholly owned subsidiary of Sandoz. It will add approximately 300 products including projects in development as well as commercial and manufacturing capabilities in the US, complementing and expanding the group's portfolio and pipeline. The net sales of the acquired business were around $ 1.2 billion for the calendar year ended December 2017. The portfolio being divested generated sales of $0.6 billion in first half of 2018 for Sandoz. After expiration of certain in-licensed product contracts, and rationalisations of acquired products that will not negatively impact profitability (but before the impact of any potential FTC-led divestments) the portfolio is expected to generate over $0.9 billion in sales for the first 12 months after completion of the transaction for Aurobindo. The transaction is expected to close in the course of 2019 following the completion of customary closing conditions, including FTC clearance. Transaction is expected to be accretive to normalised EPS from first full year of ownership, the company said.