Novartis’ Sandoz unit begins trading at 24 Swiss francs after completing the sale

Novartis on Wednesday completed the spin-off of generic drug and biosimilar company Sandoz, whose shares began trading at 24 Swiss francs in the first minutes of the company’s debut on the Swiss SIX exchange.

The Swiss pharmaceutical company initially announced its intention to spin off the business in August, offering stakeholders one Sandoz share for every five Novartis shares through an in-kind dividend.

Narasimhan told CNBC that the company has accelerated its efforts over the past six years “to focus Novartis as a pure innovative pharmaceutical company.”

Pure play companies refer to entities that target a single product or industry sector.

“Over the last six years, we have done transactions worth over $100 billion. We exited the consumer health space to create one of the largest consumer health companies, exited Alcon in the largest public market in the European capital markets, and exited our stake in Roche,” he said. Narasimhan to CNBC’s Juliana Tatelbaum:

“Now we’re turning [off] “Sandoz, and what remains now is where I believe Novartis is best suited for long-term success – an innovative pharmaceutical company focused on bringing our R&D efforts and the new medicines we make to markets around the world.”

Novartis shares rose more than 3% in early trading in Zurich, topping the European STOXX 600 index.

Novartis also reiterated its full-year guidance, with sales expected to grow by the high single digits and with underlying operating income to grow by the low double digits to the mid-20s.

In a statement alongside Wednesday’s announcement, Narasimhan said this was a “truly historic moment for Novartis and Sandoz” as they began life as independent companies.

“With several consecutive quarters of sales growth, Sandoz is starting from a position of strength as a global leader in generics and biosimilars, and I am confident it is poised to deepen its impact on patients and society,” he added.

Jefferies analysts estimated Sandoz’s listing at between $12.3 billion and $16.2 billion when the company begins trading on Wednesday.

Sandoz CEO Richard Signor also told CNBC on Wednesday that the spinoff will help his company focus its own strategy, which includes a pipeline of 25 biosimilar projects, with five more launching over the next two years.

“Ultimately, it’s about focus. Sandoz is the world’s largest generics and biosimilars company, and now, by becoming an independent company, we can focus on how we grow this business, how we bring more products to patients, and continue to build on that momentum that we’ve created.” Over the last two years,” Saynor told CNBC on Wednesday.

Saynor said the company’s overall goals are to continue building on the sales momentum of the past seven quarters, expand profit margin over the next few years, and increase free cash flow.

About half of Sandoz’s revenue comes from Europe, which Saynor said gives the company a “huge platform for growth.”

“We’ve invested heavily in our biologics pipeline, so as we sit here today, we have 25 projects in our pipeline, and we’re launching about five over the next two years,” Saynor said.

“We have been guided [that] About $3 billion in sales will come from our new pipeline, which is more than double what we’ve seen over the last five years, and we expect half of that will come from biosimilars and half of the overall growth will now come from North America, so we’ll see the US business start to accelerate over the next few years. coming.”