Novartis Shareholders Approve Spin-off of Sandoz; Sandoz Files for IPO Ahead of October Listing

Intelligent Finance APP learned on Friday that shareholders of Novartis (NVS.US) voted in favor of spinning off the company's generic drug business, Sandoz. This is the latest step in the Swiss company’s shift to focus on innovative drugs.

99.7% of investors voted in favor of the full spin-off. The spin-off plan will take place around October 4.

For more than a year, Novartis has been working to spin off Sandoz as part of its long-term strategy to focus on more profitable cutting-edge drugs.

Alastair Mankin, Vice President of TD Cowen Alternative Equity Strategies, said that Sandoz's business in the European market and its portfolio of biosimilars should help it trade at a higher price than its U.S. generic drug peers. Mankin said that due to the possibility that plans to improve profitability may not succeed, the independent company could trade at a lower price than its British competitor, Hikma Pharmaceuticals Plc.

He said, "For Novartis, this reorganization completes a decade-long transformation."

Before the special shareholders' meeting vote, Sandoz CEO Richard Saynor stated that the new company is looking forward to launching at least five additional biosimilars in the long term.

To enhance its appeal to investors ahead of Sandoz's public listing on October 4, Saynor said his goal is to improve the development pipeline of the current 25 biosimilars.

"When I joined in 2019, there were fewer than eight biologics in development. Today, that number has reached 25. This journey will continue," Saynor told Reuters. Sandoz is currently the world's second-largest biosimilar producer, behind Pfizer (PFE.US).