While Novartis is spinning off its generic and biosimilar subsidiary Sandoz, the latter’s Korean offshoot reportedly plans to withdraw from the country, drawing attention to its background.
That’s because there were cases where business units of large global pharmaceutical companies were reborn as independent companies through spinoffs. Still, they rarely closed domestic businesses, separate from spinoffs, like Sandoz Korea.
“We have persistently examined and applied business models and strategies befitting local markets,” a Novartis Korea official said. “Nothing has been decided yet concerning this principle.” However, according to several industry sources, Sandoz Korea has almost completed its withdrawal process internally.
Sandoz Korea was established in 2006 through the merger of Hexal Korea, founded in February 2003, and Sandoz, and has since been working as a company specializing in manufacturing products with expired patents.
Sandoz has received approvals for 42 products as of February 2023 but retains 41 after withdrawing 11. Major generic products include treatments for chronic diseases, such as high blood pressure, heart failure, hyperlipidemia, and anticancer and narcotic drugs, like Paclitaxel and Zolpidem.
It also concluded business accords with Korean companies by, for example, signing an exclusive sales agreement for Stavaster Tab (rosuvastatin), a hyperlipidemia treatment, with HanAll Biopharma last June.
According to the Data Analysis, Retrieval, and Transfer (DART) system of the Financial Supervisory Service, Sandoz Korea’s sales stood at 23.42 billion won ($18.54 million) in 2019, and the company has 23 employees on its payroll.
“Sandoz persistently evaluated its business models, sought strategies befitting each country, and aimed at improving patient access to high-quality medicine products and sustainable growth,” the Novartis Korea official said. “Sandoz gives top priority to employees and lets them know when there are important decisions and changes in the company.”
Novartis announced its plan to spin off Sandoz in August 2022. The company plans to spin off its generic and biosimilar business unit in a 100 percent corporate split-off formula and list it as an independent company to make it the No. 1 generic and biosimilar company in Europe.
Sandoz's net sales totaled $9.2 billion (11.5 trillion won) in 2022, including $4.9 billion in Europe, $1.8 billion in the U.S., and $2.6 billion elsewhere.
The Swiss-based company steps up expanding markets and pipelines by, for instance, acquiring entire rights to Astellas Pharma’s antifungal drug Mycamine (micafungin) last month.