Novartis' new CEO Vasant Narasimhan has indicated that the company might spin off its struggling U.S. generic pill business—and that is what it is preparing to do, sources are telling Reuters.
The news service today reported that Novartis is doing the legwork to auction off that piece of the Sandoz business, which might bring $1.6 billion from a competitor or private investors, Reuters said.
Outgoing CEO Joseph Jimenez and Narasimhan told analysts late last year that the Swiss drugmaker was looking at its options for the business in the face of rapid price erosion for generic pills in the U.S. They said a spinoff was one idea.
Narasimhan, in his first earnings call last month, said the company was looking at how to optimize the business in the face of ”significant pricing declines” and a poor climate that was unlikely to change anytime soon.
Executives have said they will concentrate U.S. efforts in complex generics and biosimilars.