Novartis CEO: Sandoz is not for sale
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Novartis CEO: Sandoz is not for sale

In an interview published this Saturday, pharmaceutical giant Novartis’s CEO Vas Narasimhan sent a strong message to investors: the company’s generics unit, Sandoz, is NOT for sale. The reason Narasimhan reiterated this point was that Novartis’s current revamp of the unit has had some people speculating as to whether Sandoz would be a part of the company’s future.

Novartis’s share price has appreciated by 22% year to date

Novartis July 30

Source: Yahoo Finance

Narasimhan told reporters: “No, we will not sell Sandoz. We will make Sandoz autonomous within Novartis, so it’s more competitive. Our plan is to focus Sandoz and make it better in the long-term.” These plans, we have previously been told, will take around a year and a half – and they come as Novartis has already sold a generic pills business and dermatology asset that were coming under pricing pressure. However, while Narasimhan says more divestitures could be on the cards, Sandoz will not be one of them.

Novartis reported earnings earlier this month, when Sandoz was an unexpected star. Speaking at the time, Narasimhan called strong results from the generics unit a “positive surprise” and revised the unit’s full-year sales forecast. Novartis now expects “possible low-single-digit growth” thanks to copies of some of its competitors’ blockbuster drugs hitting the market. Previously, it had expected to see sales in line with full-year 2018.

The interview in question was given to the Sueddeutsche Zeitung newspaper in Germany, and Narasimhan was keen to hammer home the fact that Sandoz would not only be remaining with Novartis, but also staying active in Germany too. Along with another of Novartis’s brands, Hexal, Narasimhan told reporters that “there will be no changes here [in Germany].”

Disclosure

Dominion holds Novartis in its Global Trends Managed Fund.


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