Hyderabad :” Pharma major Novartis on Thursday announced it agreed to sell selected portions of its Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solids portfolio, to Aurobindo Pharma USA, for $900 million of cash plus $100 million of potential earn-outs.
According to a release issued by the company, the Sandoz US portfolios to be sold to Aurobindo include approximately 300 products, as well as additional development projects.
The sale includes the Sandoz US generic and branded dermatology businesses as well as its dermatology development centre.
The acquisition of the dermatology and generic oral solids products of Sandoz will make it the second largest generics player in the US, by prescriptions, and give it noticeable heft in the country’s $10 billion dermatology market. Solid oral products account for 70 per cent of Sandoz’s sales while dermatology products contribute the rest. However, this could change if the Federal Trade Commission requires sale of some products to comply with anti-monopoly norms, the company said.
This acquisition will give Aurobindo Pharma the ‘PharmaDerm’ sales team that covers 5,500 healthcare professionals, who represent 75 per cent of total number of prescriptions, and strong relationships with ‘Big 3’ buyers.
“As part of the transaction, Aurobindo will acquire the manufacturing facilities in Wilson, North Carolina, as well as Hicksville and Melville, New York. The business had net sales of $600 million in H1, 2018,” it said. As part of the agreement, approximately 750 employees in Hicksville, Melville, Wilson and Princeton, New Jersey, as well as the field representatives for the PharmaDerm branded dermatology business, are expected to transfer to Aurobindo upon closing, Novartis said.
Aurobindo Pharma Managing Director, N Govindarajan, in a separate press release said the acquisition is in line with the company’s strategy to grow and diversify business in the US.
“Acquiring the businesses from Sandoz will allow us to further expand our product offering and to become a leading player in the generic dermatology market,” he added. Overall the transaction will position Aurobindo as the 2nd largest dermatology player and the 2nd largest generics firm in the US by prescriptions. “We expect a seamless integration of the acquired businesses with the rest of the Aurobindo group given the success we have achieved in our acquisitions to date,” he added.
“As we have done in some of our previous acquisitions, we will be focused on leveraging our group’s market leading vertically integrated and highly efficient manufacturing base to enhance the market position and medium-term profitability of the businesses we are acquiring,” Govindarajan said.
The transaction is expected to close in the course of 2019 following the completion of customary closing conditions, including US Federal Trade Commission clearance, Aurobindo said.
