Novartis' Sandoz bulks up in respiratory as strategic review of the generics outfit rolls on

Even as Novartis puts its generics outfit under a magnifying glass, Sandoz continues to grow. 

Angling to beef up in respiratory medicine and complex generics, Sandoz has acquired British medical and drug delivery device developer Coalesce Product Development, the Novartis unit said Monday. 

The buyout comes as Novartis weighs the future of its copycat drugmaker. Back in October 2021, the Swiss pharma launched a strategic review of Sandoz, aiming to provide an update on its plans by the end of 2022. Sandoz has attracted a suite of reported suitors so far, and Novartis CEO Vas Narasimahn last November confirmed he’d received “various requests for more information [on Sandoz], but no concrete offers."

Sandoz, meanwhile, already has a stake in the respiratory arena, with an existing portfolio of six commercial products “and nearly twice as many more in the pipeline,” the company said in the release announcing the Coalesce acquisition. Sandoz sees the field as a key part of its long-term growth strategy and expects to “actively explore further opportunities both in-house and externally.” 

“Respiratory and complex generics are areas of relatively high unmet medical need due largely to their comparatively high technical complexity,” Sandoz chief executive Richard Saynor said in today's statement.

“More generally, Sandoz is determined to grow its portfolio in the complex generics space, including complex injectables,” the company added. Overall, Sandoz reaped $9.8 billion in worldwide sales last year.

Respiratory diseases are a leading cause of death and disability worldwide, Sandoz noted in its release. In 2019, asthma, for instance, was estimated to affect around 262 million people. That same year, roughly 3.23 million deaths were attributed to chronic obstructive pulmonary disease.

Coalesce, for its part, came to be in July 2009. The company’s drug delivery know-how and pharma industry connections “led almost immediately to valuable projects and long-term relationships,” Coalesce says on its website.

The company shifted strategies in 2014, moving to develop its own in-house inhaler technologies, Pharmaphorum points out.

Meanwhile, Sandoz’s fate remains up in the air after the rollout of Novartis’ strategic review last fall. As for potential bidders, investor groups Blackstone and Carlyle could team up to make a $25 billion offer for the generics unit, Bloomberg first reported in February.

A Swedish-based investment group and Germany’s Struengmann family have also emerged as possible Sandoz suitors, as reported by German newspaper Handelsblatt last November.

As for other recent Sandoz moves, the generics outfit this March said it was selling off manufacturing operations in Ireland and Canada. First, the company reached a deal to sell its Ringaskiddy campus near Cork, Ireland, to contract manufacturer Sterling Pharma Solutions. Separately, CDMO Delpharm locked up Sandoz's manufacturing plant in Quebec.

Elsewhere, Sandoz could be looking at a sales boost in Europe courtesy of its generic version of Bristol Myers Squibb and Celgene’s megablockbuster Revlimid, which launched in 19 EU countries last month. In early March, Teva Pharmaceuticals became the first drugmaker to launch a Revlimid generic in the U.S.

BMS reported Revlimid revenues of $12.8 billion in 2021. With generic rivals waiting at the gates, BMS expects sales to drop between $9.5 billion and $10 billion in 2022.