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February 12, 2021

Sandoz signs $500m deal to acquire GSK’s cephalosporin antibiotics business

Novartis division Sandoz has signed a $500m agreement to acquire GSK's cephalosporin antibiotics business to strengthen its global position in antibiotics.

Novartis division Sandoz has signed a $500m agreement to acquire GSK’s cephalosporin antibiotics business to strengthen its global position in antibiotics.

The deal consists of the global rights to the Zinnat, Zinacef and Fortum brands in more than 100 markets.

It excludes the rights in the US, Australia and Germany to certain brands divested by GSK; certain brands in India, Pakistan, Egypt and Japan; as well as China, which GSK will retain.

According to the deal, GSK will receive $350m from Sandoz at closing. It is also eligible for additional milestone payments of up to $150m, subject to certain terms.

As part of its integrated manufacturing strategy, Sandoz plans to produce Zinnat at sites in its network, which has worldwide antibiotics production centred on its lead production site in Kundl, Austria.

On concluding the deal, GSK will deliver Zinnat to Sandoz under a manufacturing and supply agreement (MSA) while supporting related manufacturing operation transfer to Sandoz.

Sandoz CEO Richard Saynor said: “This important transaction will further position Sandoz as a global leader in antibiotics – truly essential medicines that are the backbone of modern healthcare systems.

“Cephalosporins are the largest antibiotic segment by global sales and acquiring this leading business, including the established global Zinnat brand, will complement our #1 position in generic penicillins, the other key segment.”

Last July, Sandoz announced a joint investment worth more than €150m with the Austrian government to boost the long-term competitiveness of its Kundl antibiotic manufacturing site and aid in ensuring long-term supply resilience.

The Kundl facility is the hub and centre of the western world’s last remaining integrated production chain for antibiotics.

The site focuses on generic penicillin products and manufactures finished dosage forms of several generic cephalosporin products.

Closing of the deal should take place in the second half of this year.

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