Our Sandoz Division is a global leader in generic pharmaceuticals and biosimilars and sells products in well over 100 countries. In 2018, Sandoz achieved consolidated net sales of USD 9.9 billion, representing 19% of the Group’s total net sales. Sandoz develops, manufactures and markets finished dosage form medicines as well as intermediary products including active pharmaceutical ingredients.
The Sandoz strategic goal is to be a leader in off-patent medicines, driving sustainable and profitable growth. The divisional strategy focuses simultaneously on two pillars: leading the development of an emerging segment of the healthcare market between innovation-driven originator medicines and cost-driven commodity generic medicines, such as biosimilars, complex generics, value-added medicines and digital therapeutics, and excellence in the development, manufacturing and marketing of medicines in selected parts of the standard generics segment.
Sandoz executes on its divisional strategy by focusing on several key priorities, including investing in key selected markets and therapeutic areas where it is best positioned to make a real difference, increasing the performance of its small-molecule Development and Regulatory organization, and maximizing opportunities in biosimilars. Sandoz also focuses on products that add more value for patients, payers and healthcare professionals than standard generics, including seeking opportunities to leverage digital therapies.
In 2018, in a key strategic step to evolve the Sandoz portfolio toward more differentiated products, Novartis announced an agreement to sell selected portions of its Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solids portfolio, to Aurobindo Pharma USA Inc., for USD 0.9 billion in cash plus USD 0.1 billion in potential earn-outs. The Sandoz US portfolio to be sold to Aurobindo includes approximately 300 products, as well as additional development projects. The sale includes the Sandoz US generic and branded dermatology businesses as well as its dermatology development center. As part of the transaction, Aurobindo agreed to acquire the manufacturing facilities in Wilson, North Carolina, as well as Hicksville, New York, and Melville, New York. These businesses had net sales of approximately USD 1.2 billion in 2018. The transaction is expected to close in the course of 2019 following the satisfaction of customary closing conditions.
Sandoz has a strong and continued strategic focus on biosimilars, which it began developing in 1996 and today sells in more than 80 countries. Sandoz is the market leader in biosimilars with a total of eight approved and marketed products. Availability of our biosimilars varies by country.
We launched Hyrimoz (biosimilar adalimumab) in the EU in October 2018, and Zessly (biosimilar infliximab) in the EU in November 2018. Hyrimoz was also approved in the US in October 2018. However, under the terms of our settlement with AbbVie, we are not entitled to launch Hyrimoz in the US until October 2023.
The FDA also approved biosimilar Erelzi (etanercept-szzs) in 2016 to treat multiple inflammatory diseases. The launch of this biosimilar in the US is pending litigation with Amgen, which markets Enbrel®.
Our biosimilar pegfilgrastim was approved and launched in the EU as Ziextenzo in November 2018, and we plan to submit additional data for biosimilar pegfilgrastim to the FDA in 2019 to address a complete response letter (CRL) received from the FDA in June 2016. We received a CRL from the FDA in May 2018 for our biosimilar rituximab, and subsequently announced in November 2018 that we do not plan to pursue our submission for biosimilar rituximab in the US at this time. Separately, we received a CRL from the FDA in 2018 for our submission for a generic form of fluticasone propionate and salmeterol inhalation powder, for oral inhalation (GSK’s Advair®).
According to IQVIA (formerly IMS Health), as of November 2018, Sandoz holds a leading global position in sales of biosimilars and of generic anti-infectives and oncology medicines. In addition, Sandoz holds leading global positions in key therapeutic areas, including generic cardiovascular, central nervous system, gastrointestinal, metabolism, pain and respiratory medicines.
In 2018 and January 2019, key Retail Generics product launches in the US included Glatopa 40mg/mL (generic Copaxone® 40mg/mL), palonesetron hydrochloride injection (generic Aloxi®), generic bupropion XL and and SYMJEPI (epinephrine) 0.15 mg injection (pediatric formulation), as well as innovative digital therapeutics reSET and reSET-O (together with Pear Therapeutics).
In 2018, Retail Generics product launches in various European countries included generic versions of rosuvastatin film coated tablets, ezetimide and simvastatin film-coated tablets, and ezetimide film-coated tablets, as well as buprenorphine and naloxone sublingual tablets.
Following an internal reorganization announced on January 27, 2016, 19 mature products were transferred from our Innovative Medicines Division to the Retail Generics franchise of Sandoz.
Sandoz also holds operational responsibility for the Novartis Social Business unit. Novartis Social Business aims to help improve public health in lower-income countries by developing novel, sustainable business models that enable access to high-quality medicines against infectious and chronic diseases while also strengthening healthcare capacity. Everything Novartis Social Business does is rooted in the local communities it serves and relies on its network of partners who share the same purpose. The unit comprises several legacy programs (Novartis Access, the Novartis Malaria Initiative and Novartis Healthy Family) supported by digital enabling platforms, and has full responsibility for the entire Novartis product range for seven countries in Asia and Africa.
Sandoz launched a number of products in various countries in 2018 and January 2019, including:
reSET (FDA-authorized prescription digital therapeutic for the treatment of patients with substance use disorder in the US)
reSET-O (FDA-cleared prescription digital therapeutic for the treatment of patients with opioid use disorder in the US)
Ziextenzo (biosimilar pegfilgrastim), approved in Europe in 2018 to reduce the duration of neutropenia and incidence of febrile neutropenia in adult patients treated with cytotoxic chemotherapy for malignancy with the exception of chronic myeloid leukemia and myelodysplastic syndromes
Hyrimoz (biosimilar adalimumab), approved in Europe in 2018 to treat multiple inflammatory diseases
Zessly (biosimilar infliximab), approved in Europe in 2018 to treat multiple immunological diseases
Glatopa 40 mg/mL (generic Copaxone® 40 mg/mL)
Palonesetron hydrochloride injection
Rosuvastatin film-coated tablets
Ezetimide and simvastatin film-coated tablets
Ezetimide film-coated tablets
Buprenorphine and naxolone sublingual tablets
Sandoz is organized globally in three franchises: Retail Generics, Anti-Infectives, and Biopharmaceuticals.
Retail Generics In Retail Generics, Sandoz develops, manufactures and markets active ingredients and finished dosage forms of pharmaceuticals to third parties. Retail Generics includes the areas of cardiovascular, central nervous system, dermatology, gastrointestinal and hormonal therapies, metabolism, oncology, ophthalmics, pain, and respiratory, as well as finished dosage form anti-infectives sold to third parties.
Anti-Infectives In Anti-Infectives, Sandoz manufactures and supplies active pharmaceutical ingredients and intermediates – mainly antibiotics – for internal use by Retail Generics and for sale to third- party customers.
Biopharmaceuticals In Biopharmaceuticals, Sandoz develops, manufactures and markets protein- or other biotechnology-based products, including biosimilars, and provides biotechnology manufacturing services to other companies.
This presentation contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as “guidance,” “transformation,” “continued,” “potential”, “launches,” “on track” “launched,” “filed,” “launch,” “expected,” “to grow,” “will,” “enter,” “pipeline,” “commitment,” “well positioned,” “future,” “strategy,” “priorities,” “embrace,” “deliver,” “go big,” “build,” “allows,” “expect,” “to be completed,” “closing conditions,” “committed,” “continued,” “growth drivers,” “Priority Review Voucher,” “submissions,” “filings,” “to be presented,” “potentially,” “if approved,” “aims,” “outlook,” “unforeseen,” “forecast,” “may,” “would,” “continues,” “aiming,” “vision,” “priority review,” “PRIME designation,” “Sakigake designation,” “enrollment,” “planned,” “upcoming,” “Fast Track designation,” “Orphan designation,” “scheduled,” or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding potential future revenues from any such products; or regarding the potential outcome, or financial or other impact on Novartis, of the spinoff of our Alcon Division, or of the proposed divestiture of certain portions of our Sandoz Division business in the US; or regarding the potential impact of the share buyback plan; or regarding potential future sales or earnings of the Group or any of its divisions or potential shareholder returns; or by discussions of strategy, plans, expectations or intentions. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. You should not place undue reliance on these statements. In particular, our expectations could be affected by, among other things: global trends toward healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; regulatory actions or delays or government regulation generally, including potential regulatory actions or delays with respect to the proposed transactions or the development of the products described in this presentation; the potential that the strategic benefits, synergies or opportunities expected from the Alcon and Sandoz transactions may not be realized or may be more difficult or take longer to realize than expected; the inherent uncertainties involved in predicting shareholder returns; the uncertainties inherent in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products that commenced in prior years and will continue this year; safety, quality or manufacturing issues; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential litigation with respect to the proposed transactions, product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes and government investigations generally; uncertainties involved in the development or adoption of potentially transformational technologies and business models; our performance on environmental, social and governance measures; general political, economic and trade conditions, including uncertainties regarding the effects of ongoing instability in various parts of the world; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; uncertainties regarding potential significant breaches of data security or data privacy, or disruptions of our information technology systems; and other risks and factors referred to in Novartis AG’s current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.
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