Novartis on Thursday, April 2, scrapped the US$1 billion sale of US generic pill and skin drug assets to India’s Aurobindo Pharma as regulators balked, setting back the Swiss drugmaker’s shift to more profitable medicines.
The cancellation leaves hydroxychloroquine, an older malaria drug that Novartis CEO Vas Narasimhan is touting as a potential coronavirus treatment, in its Sandoz generic unit’s portfolio.
Novartis is donating 130 million hydroxychloroquine doses to support efforts against the epidemic, though the European Union has so far said there is no proof it works.
Novartis stated the Aurobindo deal’s collapse was not coronavirus-related, from its perspective, but stemmed from the US Federal Trade Commission’s not giving approval within expected timelines. The transaction was supposed to have been completed last year, but was delayed repeatedly.
Narasimhan announced the transaction with India’s Aurobindo in September 2018 as he hoped to shed generic assets in the United States that have faced fierce price pressure and dragged down Sandoz’s profitability.
In 2019, the US assets continued to weigh on Sandoz’s performance, as the generics division’s sales fell 1% to US$9.7 billion as price erosion in the United States canceled growth elsewhere. Sales in the oral solids and skin business fell to US$1.1 billion in 2019 from US$1.2 billion in 2018.
Full Content: Reuters
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.