Generics division is spun off
Novartis is going public with Sandoz
8/18/2023 8:58 am
The Swiss pharmaceutical company Novartis is streamlining its business. This also includes the separation from the division for imitation products. This should now be brought to the stock exchange at the beginning of October. Novartis shareholders get the title booked proportionately in the depot – but first have to agree.
The Swiss pharmaceutical company Novartis plans to list its Sandoz generics division on October 4th. Shareholders are to receive one Sandoz share for every five Novartis shares they hold, the drug manufacturer said. At an Extraordinary General Meeting on September 15, 2023, Novartis shareholders are expected to vote on the spin-off proposed by the Board of Directors.
In addition to the approval of Novartis shareholders, the spin-off is also subject to the fulfillment of conditions such as obtaining the necessary approvals for the stock exchange listing. Novartis plans to list Sandoz on the SIX Swiss Exchange and offer American Depositary Receipts (ADRs) in the US.
With the separation from the comparatively low-margin business with generic medicines and biosimilars, which was announced a year ago, the group is driving forward its focus on the lucrative business with patent-protected medicines. In terms of sales, Novartis sells almost a fifth of its business. Last year, Sandoz grew currency-adjusted sales by four percent to $9.25 billion and achieved an adjusted EBITDA margin of 20.6 percent. In the second quarter it was 18 percent.
At the beginning of June, Sandoz promised its future shareholders increasing profits and dividends. This year, 20 to 30 percent of the net profit adjusted for special factors should be paid out, in the medium term it should be 30 to 40 percent. Sales are expected to grow by a mid-single-digit percentage annually until 2028, excluding exchange rate fluctuations, and the company is aiming for a medium-term adjusted operating profit (Ebitda) margin of 24 and 26 percent, after an expected 18 to 19 percent this year.