Did Sandoz prove too big a pill for private equity?

Novartis has finally confirmed that Sandoz will be spun off to investors and listed on the Swiss stock exchange, seemingly scotching speculation of a sale that could have seriously boosted the Swiss pharma giant’s bank balance. Novartis said last year that buyers had expressed an interest in the generics and biosimilars business – Handelsblatt named the billionaire Strüngmann family and private equity group EQT as interested parties – though no firm bid emerged. Today’s statement could either be an attempt to flush out serious moves, or as a signal that interest has petered out. Any acquisition of Sandoz would be a big undertaking, even for deep-pocketed private equity, with the company likely to cost around $25bn, analysts estimated. A look at other players shows that generics groups do not come bigger than Sandoz. According to Evaluate Pharma’s estimates, this will be the largest business by generics sales this year, with Israel’s Teva not far behind. Others in the top 10 are mostly pureplay generics firms, with the exceptions of Pfizer, which retained its biosimilars business and a large hospital segment after spinning off Viatris, and Fresenius, whose Kabi unit sells a range of generic intravenous drugs.