Novartis announces strategic review of its India business
19 Feb 2024
Swiss pharma multinational Novartis AG has started a strategic review of its Indian arm, possibly with the intent of selling it off. The company said the strategic review will include an assessment of the shareholding of Novartis AG in Novartis India Limited.
The strategic review will not impact Novartis Healthcare Private Limited, which is a wholly-owned subsidiary of Novartis group in India. Novartis Healthcare Private Limited, based at the Novartis Corporate Center in Hyderabad, is the commercial arm of Novartis, housing its R&D and clinical trial centres.
Basel, Switzerland-based Novartis AG holds 70.68 per cent shares of Novartis India, with an estimated value of over Rs1,800 crore, at current market price of its shares.
The strategic review comes after the company’s shareholders, on 15 September 2023, approved the spin-off of Sandoz and consolidated financial statements regarding `continuing operations’ and `discontinued operations’.
Continuing operations include the business activities of Novartis, comprising the innovative medicines business and the continuing corporate activities. Discontinued operations include the Sandoz division and select corporate activities of Sandoz.
Novartis now operates as a single global operating entity focused on innovative medicines.
Novartis has had a significant presence in India since 1947, operating various entities including a commercial entity called Pharma International, an R&D arm called Development, a global capacity development centre named Novartis Corporate Center and Biomedical Research.
Novartis, which employs nearly 8,100 people across its India businesses, says it remains deeply committed to India, with its portfolio of medicines for treatment in areas including cardiovascular, oncology, immunology, eye care and neurosciences.
Reports, meanwhile, said, Hyderabad-based Dr Reddy’s Laboratories has expressed interest in acquiring the Novartis India Ltd, the listed entity.
Novartis and Dr Reddy’s Lab had, in 2022, entered into an exclusive sales and distribution agreement granting Dr Reddy’s the right to distribute the Voveran, Calcium and Methergine lines in India.
According to Novartis India, the idea behind the arrangement with Dr Reddy’s was to broaden the market by making medicines available beyond the current geographies.
For the quarter ended 31 December 2023, the company had posted revenues of Rs84.54 crore compared with Rs80.17 crore in the corresponding period of the previous year.
Novartis said it is unsure of completing the strategic review of its India operations in 2024, or about the review resulting in any transaction.
