Novartis has signed an agreement to sell parts of its Sandoz US business to Aurobindo Pharma USA for a cash consideration of $900m, along with potential earn-outs worth $100m.
The deal covers Sandoz generic and branded dermatology businesses, and generic oral solids portfolio in the US.
Sandoz US comprises a total of about 300 products as well as other projects in development phase.
In addition, Aurobindo will gain a dermatology development centre and three manufacturing facilities.
Sandoz expects the divestiture to enable its focus on complex generics, value-added medicines and biosimilars. This is intended to help attain profitable growth over the long-term in the country.
Sandoz CEO Richard Francis said: “Sharpening our portfolio focus in the US allows us to devote more time and resources toward our strategy of bringing complex generics, value-added medicines and biosimilars to patients in the US, creating higher value and opening up access to important medicines where alternatives are truly needed.”
Following closing of the deal, nearly 750 employees from the manufacturing facilities and field representatives for the PharmaDerm branded business may be transferred to Aurobindo.
Sandoz president Carol Lynch said: “We recognise that the transfer of ownership for a business of this size is a complex process, and we are aware that it may create some uncertainties for our associates in the US. It is thus a priority for us to make the transition as clear and quick as possible.”
Subject to customary closing conditions, the transaction is expected to be completed next year.
Sandoz will primarily carry out clinical and business development, and investment operations related to its areas-of-focus, after closing.
In July this year, Aurobindo Pharma’s Indian subsidiary signed an agreement to acquire commercial operations of Apotex International in five European countries.