Sandoz Pushes Product Launch Plans As Novartis Shareholders Approve The Spin-Off

At an Extraordinary General Meeting, Novartis AG's NVS shareholders approved the proposed 100% spin-off of Sandoz.

Novartis shareholders and Novartis ADR holders will receive one Sandoz share for every five Novartis shares and one Sandoz ADR for every five Novartis ADRs.

The spin-off is planned to occur on or around October 4, 2023.

Under CEO Richard Saynor's leadership, Sandoz intends to introduce at least five additional biologic drugs in a strategic move to enhance its attractiveness to investors in preparation for its upcoming public debut as an independent entity.

Saynor noted that Sandoz's existing production network and sales force are well-equipped to handle foreseeable launches, resulting in sales growth outpacing costs. He also mentioned that major takeover deals were not part of his current agenda.

Sandoz previously disclosed plans for 25 future biosimilars in its development pipeline. Out of these, the company aims to bring five to market within the next two years. 

Saynor, in an interview with Reuters, mentioned, "When I joined in 2019, there were less than eight biologics in the pipeline. Today, there's 25. And that journey will continue. I'll be happier when it's over 30."

Sandoz currently holds the position of the world's second-largest biosimilar manufacturer, trailing behind Pfizer Inc PFE. 

Citing Deutsche Bank's estimate, Reuters notes Sandoz's market value of $11-$13 billion, while brokerage firm Berenberg expects a $17-$26 billion valuation range. 

The company has stated that adjusted core profit margins for 2023 are expected to be 18%-19%, down from 21.3% in 2022. However, Sandoz aims to see margins rebound to 24%-26% by 2028.

Sandoz recently announced plans to launch a generic version of Johnson & Johnson's JNJ anti-inflammatory drug, Stelara (ustekinumab), for autoimmune disorders including Crohn's disease, plaque psoriasis, psoriatic arthritis, and ulcerative colitis.

Price Action: NVS shares are up 0.71% at $102.55 during the premarket session on the last check Friday.