Sandoz US to divest dermatology and oral solids businesses to Aurobindo Pharma for $1bn

In a strategic move within the pharmaceutical industry, Sandoz US, a subsidiary of the Swiss-based Novartis, has announced the sale of its dermatology and oral solids businesses to Aurobindo Pharma, an Indian pharmaceutical giant. The deal, which includes a $900 million cash payment and potential earn-outs of $100 million, marks a significant reshaping of Sandoz’s operations in the United States.

This divestiture is designed to allow Sandoz US to concentrate more effectively on complex generics, biosimilars, and value-added medicines, aiming for sustainable and profitable growth in the competitive US market. Richard Francis, CEO of Sandoz and Member of the Novartis Executive Committee, emphasized the strategic importance of the transaction: “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.”

The acquisition by Aurobindo Pharma, to be executed through its subsidiary Aurobindo Pharma USA, includes nearly 300 products, various development projects, and a dermatology development center. It also encompasses the takeover of Sandoz’s manufacturing facilities in Wilson, North Carolina, and Hicksville and Melville, New York. The businesses being sold had registered net sales of $600 million in the first half of 2018 alone.

Upon completion of the deal, about 750 employees from specific Sandoz US facilities and field representatives for the PharmaDerm dermatology business are expected to transition to Aurobindo Pharma. N Govindarajan, Managing Director of Aurobindo Pharma, commented on the acquisition, stating, “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. Overall the transaction will position Aurobindo as the 2nd largest dermatology player and the 2nd largest generics company in the US by prescriptions.”

The transaction is set to close in the coming year, pending customary closing conditions. This sale is part of a broader realignment by Sandoz US to focus on areas like injectables, ophthalmics, and respiratory treatments, where it sees greater strategic value and market growth potential.

Following this divestiture, Novartis continues to advance its global pharmaceutical agenda, having recently secured European approval for its skin cancer drug combo, Tafinlar and Mekinist, enhancing its portfolio in oncology and complex biologics.