Pave the way for Sandoz: Novartis shareholders vote for spin-off

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This means Sandoz is expected to go public on or around October 4, 2023. Novartis shareholders receive one Sandoz share for every five Novartis shares.

Unlike Novartis shares, Sandoz’s shares will not be part of Switzerland’s main stock index, the SMI. However, it will be included in the Swiss Leader Index (SLI), which includes the 30 largest and most liquid stocks. This means the shares also belong to the SMI Intermediate Index (SMIM), a group of 30 companies that sit just behind the SMI.

With their approval, shareholders are paving the way for parent company Novartis to transform into a focused pharmaceutical company. Years ago, Novartis spun off its Alcon eye division and listed it as an independent company. Various strategic changes followed, aimed at streamlining structures and thus becoming more competitive.

Division in line with the interests of shareholders

Novartis has repeatedly emphasized that the spin-off is in the interest of all shareholders. Independence will create a European champion and world-leading provider of generic and biosimilar medicines.

Spinning off the generics division is consistent with the strategy. For years, especially in the US, the business has suffered from persistent price pressure, which has had a negative impact on the group’s overall results.

First of all, the low-cost generics business does not match the ambitious margin targets Novartis CEO Vas Narasimhan has given the group. The group targets a core operating profit margin of over 40 percent in the long term.

For comparison: Sandoz targets core operating margin before depreciation and amortization (core EBITDA) of 24 to 26 percent by 2028. It’s likely to be between 18 and 19 percent this year. (SDA/smt)

Source :Blick