Novartis buys antibiotics business from GSK in generics push

GSK has announced it has reached an agreement with Sandoz, a Novartis division, to sell its Cephalosporin antibiotics business. Sandoz will pay GSK USD 350 million at closing, plus additional milestone payments up to USD 150 million, subject to the terms of the transaction. The transaction is subject to relevant anti-trust and regulatory clearances and is expected to close in the second half of 2021.

The transaction aligns with GSK’s strategy to prioritise and simplify its portfolio and invest in the company’s innovative R&D pipeline and new product launches.

Cephalosporin manufacturing will transfer from GSK sites to Sandoz following a four-year manufacturing and supply agreement (MSA) and subsequent transfer of manufacturing operations. GSK proposes to close its Cephalosporins manufacturing operations once the transfer of manufacturing operations to Sandoz is complete and the MSA has come to an end, currently expected to be in 2025. GSK is providing support to potentially affected employees and is committed to supporting the local communities affected.

Cephalosporins are a well-established class of antibiotics used to treat a range of bacterial infections. The products being divested include the Zinnat, Zinacef and Fortum brands all of which are now off-patent. In 2020, the three brands had combined sales of approximately USD 140 million in the relevant markets.

The company has previously divested Fortum and Zinacef in the US and Germany and Fortum and Zinnat in Australia. The transaction includes all other markets except India, Pakistan, Egypt, Japan (relating to local Fortum brands) and China (excluding Taiwan, Hong Kong and Macau).

Other brands in GSK’s antibiotics portfolio, and GSK’s research and development into innovative antibiotics are not impacted by this divestment.

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