Business Strategy Sandoz to Buy GSK’s Cephalosporin Antibiotics Business for 500 Million Dollars
With this deal, Sandoz will acquire the global rights to three of GSK’s brands – Zinnat, Zinacef and Fortum – in more than 100 markets. The transaction will also enable Sandoz to strengthen its global position in antibiotics.
Basel/Switzerland – Sandoz, a Novartis division, has signed an agreement to acquire GSK’s cephalosporin antibiotics business, reinforcing its leading global position in antibiotics.
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 350 million dollars at closing, plus additional milestone payments of up to 150 million dollars, 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 140 million dollars 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.
“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.”