Aurobindo bids $1.6B for Novartis' U.S. dermatology generics: report

Novartis is weighing a sale of certain Sandoz assets in the U.S. (Novartis)

As Novartis tries to shed some of its Sandoz offerings in the U.S. under intense pricing pressure, the drugmaker may have found a buyer for a generic dermatology business. India's Aurobindo has submitted a $1.6 billion offer for the unit, according to Livemint.

The deal would include manufacturing facilities and other infrastructure to support the products, according to the publication, which cites unnamed sources. Private equity funds and other drugmakers have also expressed interest in the business, according to one of Livemint's sources.

Novartis has been looking at selling, or abandoning, some generic offerings as pricing in the U.S. has come under fire. The drugmaker's CEO Vas Narasimhan confirmed on a conference call last month that the review is still underway.


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The drugmaker picked up generic dermatology business Fougera for $1.5 billion back in 2012 and started considering a sale late last year, Bloomberg reported. Between those two decisions, the situation at both at Novartis and around the generic industry has changed. Originally, the drugmaker planned to invest in and grow the business.

RELATED: Novartis looks at offloading its generic pills business in U.S. as market continues to decline

The Sandoz business review comes following years of tough pricing dynamics in the U.S. At Novartis, the company has increased its presence in oncology, biosimilars and complex generics.

As struggling generics players face intense pricing pressure, they've turned to M&A as one way to fight back. Amneal and Impax have merged to gain scale, and market watchers predict Endo could try dealmaking of its own.

RELATED: As generics market stalls, Novartis said to weigh sale of copycat skin medications

The Novartis deal talk closely follows Sanofi and Advent International's announcement that the companies are in exclusive talks for Sanofi's €2 billion European generics unit.

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