How far will Novartis’ Sandoz go to ‘differentiate’ itself? Into branded drugs, apparently

Novartis
Novartis is licensing Shionogi's opioid-induced constipation drug Rizmoic in Germany, U.K. and the Netherlands. (Novartis)

Sandoz is known as a leader in off-patent medicines. But amid a strategic pivot that aims to give the Novartis division more autonomy, it has signed a very different sort of deal.

Sandoz grabbed up some new marketing rights, not to a small-molecule copycat or biosimilar, but to a brand-new innovative drug. The generics specialist will be selling Shionogi’s opioid-induced constipation drug Symproic (marketed as Rizmoic in Europe) in the key European markets of Germany, the U.K. and the Netherlands. The drug won its U.S. nod in mid-2017 and just bagged official European approval in late February.

In a Thursday statement, interim Sandoz chief Francesco Balestrieri framed the deal as “a significant step forward” for Sandoz’s goal of “focusing increasingly on differentiated, value-added therapeutics.”

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That's something of a deviation from Novartis’ previous mission statement for the business. As CEO Vas Narasimhan said during the company’s fourth-quarter earnings call, Sandoz’s goal is to lead the copycat drug market, and to make that happen, it’s pivoting toward biosimilars and hard-to-copy generics.

As part of that transformation, Novartis has sold some declining U.S. generics to India’s Aurobindo Pharma, and it’s now focused on what Narasimhan called the “de-integration” of Sandoz. The idea is to make it “an autonomous entity […] that is able to compete as an independent unit within Novartis,” the CEO said during the Q4 call.

The autonomy talk in itself triggered speculation that Novartis is preparing Sandoz for a sale or spinoff, a rumor that’s surfaced again and again in recent years—even though the company has repeatedly refuted it when asked directly.

But Novartis execs have made comments that fuel the ongoing sale-or-spinoff talk. While calling Sandoz “an integral part of Novartis,” Narasimhan himself added that the company will disclose what it wants to do with the unit after the “de-integration” is complete in about a year and a half. The recent departure of now-former Sandoz CEO Richard Francis also helped keep the rumor alive.

RELATED: Novartis' Sandoz chief exits with 'de-integration' undone. Could a spinoff be next?

Now, the new innovative medicine deal again begs the question: Is Novartis building out Sandoz for a divestiture? 

“No, this is about driving innovative growth at Sandoz as part of Novartis,” a company spokesperson told FiercePharma in a statement. While insisting that the unit “remains absolutely committed to its core business as a global leader in generic and biosimilar medicines,” the spokesperson also said it “will certainly continue to explore all opportunities to further deliver on our underlying purpose: pioneering novel ways to drive access to healthcare.”

On the other hand, Sandoz does have an existing presence in painkillers and in drugs that fight the side effects of opioid use. For example, in February, the company launched an authorized generic of Indivior’s sublingual opioid dependence drug Suboxone in the U.S.

And in a recently-signed collaboration with Pear Therapeutics, Sandoz has launched two novel prescription digital therapeutics, reSET for patients with substance use disorder and reSET-O for patients with opioid use disorder. But those are just mobile apps that help patients with abstinence in substance abuse and increase adherence to therapy. Symproic, however, is a branded pill.

Editor's Note: The story has been updated with comments from Novartis/Sandoz.

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