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Novartis AG (NVS - Free Report) announced that its shareholders agreed to the proposed 100% spin-off of its generic arm, Sandoz.
Novartis announced in 2022 that it planned to spin off Sandoz into a new publicly traded standalone company following a strategic review. Due to industry-wide price competition among generic pharmaceutical companies and the consolidation of buyers, Sandoz experienced significant declines in sales and profits, particularly in the United States.
The spin-off is expected to take place on Oct 4, 2023. It will be implemented through the distribution of a dividend-in-kind of Sandoz shares to Novartis shareholders and of Sandoz American Depositary Receipts ("ADR") to Novartis ADR holders.
Novartis shareholders and Novartis ADR holders will receive one Sandoz share for every 5 Novartis shares and one Sandoz ADR for every 5 Novartis ADRs.
The spin-off is expected to be tax-neutral for Swiss tax and U.S. federal income tax purposes.
Sandoz is planned to be listed on the SIX Swiss Exchange, with an ADR program in the U.S. The ADRs will not be listed on a U.S. national securities exchange.
Shareholders of Novartis also approved an ordinary capital decrease of the share capital of Novartis AG in the amount of the share capital of Sandoz.
In a separate press release, Sandoz announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency has adopted a positive opinion recommending marketing authorization for the biosimilar of trastuzumab (150 mg, for intravenous use), developed by EirGenix, Inc.
The positive opinion for the biosimilar is for breast and gastric cancer.
Sandoz reported sales of $9.1 billion in 2022. It has a leading global portfolio with eight marketed biosimilars.
Shares of Novartis have risen 13.1% year to date compared with the industry’s 8.1% growth.
Image Source: Zacks Investment Research
With the planned spin-off of Sandoz, Novartis is looking to become a pure-play pharmaceutical company. It is streamlining its pharmaceuticals portfolio and has decided to divest its “front of eye” ophthalmology assets to Bausch + Lomb (BLCO - Free Report) , a global eye health company.
Novartis has signed an agreement with Bausch + Lomb to transfer Xiidra and SAF312 (libvatrep) for $2.5 billion.
In view of the same, BLCO recently launched an offering of $1.4 billion in aggregate principal amount of new senior secured notes due 2028 to finance the impending acquisition of Xiidra.
BLCO is also looking to enter into an incremental term loan facility in the form of an incremental amendment to its existing term loan facility or a separate credit agreement.
Novartis recently acquired Chinook Therapeutics for $3.5 billion to strengthen its renal pipeline.
The strong performance of key drugs, strategic acquisitions and streamlined focus should pave the way for solid growth for NVS in the quarters ahead.
Zacks Rank & Other Stocks to Consider
Novartis currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the industry are Eton Pharmaceuticals (ETON - Free Report) and Dynavax Technologies (DVAX - Free Report) . Eton currently flaunts a Zacks Rank #1 (Strong Buy) and Dynavax carries the same rank as Novartis.
Loss estimates for Eton for 2023 have narrowed to 10 cents from 31 cents in the past 60 days, while earnings estimates for 2024 are pegged at 26 cents per share.
Loss estimates for Dynavax for 2023 have narrowed to 24 cents from 56 cents in the past 90 days, while earnings estimates for 2024 are pegged at 2 cents per share.
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Novartis' (NVS) Shareholders Approve Sandoz Separation
Novartis AG (NVS - Free Report) announced that its shareholders agreed to the proposed 100% spin-off of its generic arm, Sandoz.
Novartis announced in 2022 that it planned to spin off Sandoz into a new publicly traded standalone company following a strategic review. Due to industry-wide price competition among generic pharmaceutical companies and the consolidation of buyers, Sandoz experienced significant declines in sales and profits, particularly in the United States.
The spin-off is expected to take place on Oct 4, 2023. It will be implemented through the distribution of a dividend-in-kind of Sandoz shares to Novartis shareholders and of Sandoz American Depositary Receipts ("ADR") to Novartis ADR holders.
Novartis shareholders and Novartis ADR holders will receive one Sandoz share for every 5 Novartis shares and one Sandoz ADR for every 5 Novartis ADRs.
Novartis AG Price and Consensus
Novartis AG price-consensus-chart | Novartis AG Quote
The spin-off is expected to be tax-neutral for Swiss tax and U.S. federal income tax purposes.
Sandoz is planned to be listed on the SIX Swiss Exchange, with an ADR program in the U.S. The ADRs will not be listed on a U.S. national securities exchange.
Shareholders of Novartis also approved an ordinary capital decrease of the share capital of Novartis AG in the amount of the share capital of Sandoz.
In a separate press release, Sandoz announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency has adopted a positive opinion recommending marketing authorization for the biosimilar of trastuzumab (150 mg, for intravenous use), developed by EirGenix, Inc.
The positive opinion for the biosimilar is for breast and gastric cancer.
Sandoz reported sales of $9.1 billion in 2022. It has a leading global portfolio with eight marketed biosimilars.
Shares of Novartis have risen 13.1% year to date compared with the industry’s 8.1% growth.
Image Source: Zacks Investment Research
With the planned spin-off of Sandoz, Novartis is looking to become a pure-play pharmaceutical company. It is streamlining its pharmaceuticals portfolio and has decided to divest its “front of eye” ophthalmology assets to Bausch + Lomb (BLCO - Free Report) , a global eye health company.
Novartis has signed an agreement with Bausch + Lomb to transfer Xiidra and SAF312 (libvatrep) for $2.5 billion.
In view of the same, BLCO recently launched an offering of $1.4 billion in aggregate principal amount of new senior secured notes due 2028 to finance the impending acquisition of Xiidra.
BLCO is also looking to enter into an incremental term loan facility in the form of an incremental amendment to its existing term loan facility or a separate credit agreement.
Novartis recently acquired Chinook Therapeutics for $3.5 billion to strengthen its renal pipeline.
The strong performance of key drugs, strategic acquisitions and streamlined focus should pave the way for solid growth for NVS in the quarters ahead.
Zacks Rank & Other Stocks to Consider
Novartis currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the industry are Eton Pharmaceuticals (ETON - Free Report) and Dynavax Technologies (DVAX - Free Report) . Eton currently flaunts a Zacks Rank #1 (Strong Buy) and Dynavax carries the same rank as Novartis.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Loss estimates for Eton for 2023 have narrowed to 10 cents from 31 cents in the past 60 days, while earnings estimates for 2024 are pegged at 26 cents per share.
Loss estimates for Dynavax for 2023 have narrowed to 24 cents from 56 cents in the past 90 days, while earnings estimates for 2024 are pegged at 2 cents per share.