Navigation

Novartis unit to buy generic drug maker

Novartis business unit Sandoz wants to expand its North American sales Keystone

Sandoz, a Novartis-owned maker of generic drugs, has moved to buy Canada’s Sabex for $565 million (SFr699 million).

This content was published on June 7, 2004 - 11:56

The Vienna-based company said the purchase would help boost its position in the North American market for off-patent drugs.

Sandoz said brand-name medicines with sales of up to $14 billion in the United States are set to lose patent protection between 2003 and 2010.

Sabex, which is based in Quebec, is Canada’s sixth-largest maker of what are known as “injectable generics”.

Sandoz is the world’s second-largest maker of generic drugs.

“The deal gives Sandoz a new operational presence in Canada,” Christian Seiwald, the firm's chief executive, said in a statement.

Too expensive

Analysts expressed support for the move but questioned the price, which is equal to 6.3 times last year's sales of almost $90 million.

Patrick Burgermeister, a Zurich Cantonal Bank analyst, said it looked "expensive".

But Eric Bernhardt, a fund manager at Clariden Bank, put a more positive spin on the deal.

“Injectable generics is going to be big business, so looking at the big picture this is a good acquisition,” he said.

The move is part of a general strategy by Novartis to build a strong generic drugs business.

Unlike many of the world’s biggest pharmaceutical firms, Novartis has built Sandoz to tackle big-name rivals by producing cheaper versions of well-known drugs.

The world’s largest market for generic drugs is in the US, where many so-called blockbuster drugs are due to come off patent.

The Sabex deal is due to be completed next month, subject to US and Canadian regulatory approval.

swissinfo with agencies

This article was automatically imported from our old content management system. If you see any display errors, please let us know: community-feedback@swissinfo.ch

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.

Share this story

Change your password

Do you really want to delete your profile?