(Reuters) – Switzerland’s Novartis AG (NOVN.S) is preparing to auction its U.S. generic pill business, looking to shed a unit that has struggled amid fierce price competition, people familiar with the matter said on Friday.
The move illustrates how the unit has diverged from the fortunes of the rest of Novartis’ $10 billion Sandoz generics and biosimilars division. The company has fared better in manufacturing hard-to-make generic drugs, such as injectables and inhalables, than it has with easier to produce pills.
“It is a unique situation,” new Novartis Chief Executive Vasant Narasimhan told investors and analysts during the company’s fourth-quarter earnings call last month when asked about the future of the U.S. generic pills business.
In 1996, Sandoz was merged with rival Ciba-Geigy to form Novartis, one of the world’s biggest pharmaceutical companies which now has a market capitalization of 206 billion Swiss Francs ($223 billion).
Novartis has been looking for new blockbusters after its top seller, blood cancer drug Gleevec, lost its cancer protection. It is counting on approvals for new drugs against macular degeneration, a cause of blindness, and migraine, in partnership with U.S. drugmaker Amgen Inc (AMGN.O), as well as a pair of new multiple sclerosis drugs, to revitalize its growth.
Novartis also said last year it is considering a spin-off of its eyecare business Alcon.
(This version of the story corrects Novartis’ market capitalization in 8th paragraph)
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