Novartis to Sell US Derma Business, Oral Solids Portfolio to Aurobindo for Up to $1 Billion

Swiss drugmaker Novartis (NOVN.SW, NVS) has agreed to sell portions of its Sandoz US portfolio to Aurobindo Pharma USA for up to $1 billion as it seeks to focus the Sandoz division on higher growth areas.

The company said on Thursday that it will divest the Sandoz US dermatology business and generic US oral solids portfolio to Aurobindo Pharma USA for $0.9 billion of cash plus $0.1 billion of potential earn-outs. It said that the deal supports the Sandoz strategy of focusing on complex generics, value-added medicines and biosimilars.

The Sandoz US portfolios to be sold to Aurobindo include approximately 300 products, as well as additional development projects. As part of the transaction, Novartis said that Aurobindo would acquire the manufacturing facilities in Wilson, North Carolina, as well as Hicksville and Melville, New York. It said that the business had net sales of $0.6 billion in the first half of the year.

“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,” Richard Francis, chief executive of Sandoz, said.

As part of the deal, approximately 750 employees in Hicksville, Melville, Wilson and Princeton, New Jersey, as well as field representatives for the PharmaDerm branded dermatology business, are expected to transfer to Aurobindo upon closing, which is expected in 2019 following the completion of closing conditions.