On February 11, 2021 Sandoz, a Novartis division, reported that it has signed an agreement to acquire GSK’s cephalosporin antibiotics business, reinforcing its leading global position in antibiotics (Press release, Novartis, FEB 11, 2021, View Source [SID1234574930]).
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The agreement includes the global rights to three established brands (Zinnat, Zinacef and Fortum)) in more than 100 markets. It excludes the rights in the US, Australia and Germany to certain of those brands, which were previously divested by GSK, and in India, Pakistan, Egypt, Japan (to certain of the brands) and China, which will be retained by GSK.
Sandoz will pay GSK USD 350 million at closing, plus additional milestone payments of up to USD 150 million, subject to the terms of the transaction. Closing of the transaction is expected in the second half of 2021, subject to customary closing conditions including regulatory approvals. In 2020, the three brands had combined sales of approximately USD 140 million in the relevant markets.
In line with its integrated manufacturing strategy, Sandoz intends in the longer term to manufacture Zinnat at sites in its own network, which has global antibiotics production centered on its lead production site in Kundl, Austria. Once the transaction is completed, GSK will supply Zinnat to Sandoz under a manufacturing and supply agreement (MSA), while supporting a transfer of the related manufacturing operations to Sandoz. We expect this process to last for approximately four years from the close of the transaction onwards.
"This important transaction will further position Sandoz as a global leader in antibiotics – truly essential medicines that are the backbone of modern healthcare systems," said Sandoz CEO Richard Saynor.
"Cephalosporins are the largest antibiotic segment by global sales and acquiring this leading business, including the established global Zinnat brand, will complement our #1 position in generic penicillins, the other key segment. It will also set us up for additional synergies driven by an increased promotional footprint that will support growth of both the acquired brands and the current existing Sandoz portfolio."
The agreement confirms the Sandoz commitment to further grow its antibiotics business, following the announcement last year of a joint investment with the Austrian government of more than EUR 150 million to strengthen the long-term competitiveness of its Kundl antibiotic manufacturing site and help to ensure long-term supply resilience.
Kundl is the hub and center of the last major integrated production chain for antibiotics in the western world. Its focus is on generic penicillin products, but the plant also produces finished dosage forms of several generic cephalosporin products.