NOVARTIS TO ACQUIRE SABEX HOLDINGS | June 14, 2004 Issue - Vol. 82 Issue 24 | Chemical & Engineering News
Volume 82 Issue 24 | p. 13 | News of The Week
Issue Date: June 14, 2004

NOVARTIS TO ACQUIRE SABEX HOLDINGS

The $565 million purchase will enlarge Swiss firm's stake in generic drugs
Department: Business
Credit: PHOTODISC
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Credit: PHOTODISC

Novartis has signed a definitive agreement to acquire privately held Sabex Holdings, a 23-year-old Canadian maker of generic pharmaceuticals, for $565 million.

The acquisition of Sabex, based in Boucherville, Quebec, will add $90 million in sales to Novartis' generic drug unit, Sandoz, which had sales of $2.9 billion in 2003.

Sabex offers a range of copycat drugs produced at FDA-approved facilities that include injectables, suppositories, ophthalmic medicines, and other products covering more than 80 molecules. It received approval to sell eight new products over the past year and has 50 more under development.

Unlike other ethical drugmakers, Novartis has aggressively pursued growth in generic drug markets. In 2002, Novartis bought the Slovenian generic drugmaker Lek for nearly $900 million. At the time, Lek had almost $400 million in sales. The Sabex purchase will make Sandoz the leading injectable generics manufacturer in Canada and the sixth-largest Canadian generics maker.

Sandoz CEO Christian Seiwald explains that the firm paid a premium for Sabex because it "provides Sandoz with a leadership position in injectable generics in Canada and a platform to build a generic injectables business globally, particularly in the rapidly growing U.S. market."

The U.S. market for injectable medicines losing patent protection is set to double from $7 billion to $14 billion between 2002 and 2010, Sandoz says. Sabex has expanded sales to U.S. customers and increased manufacturing capacity since 2002, when private equity firm RoundTable Healthcare Partners purchased a majority interest in the company.

But Sabex's value is not just as a channel into the U.S. injectables market. Sandoz says it expects the Sabex sales force to help increase sales of its existing portfolio of solid-dosage drugs in Canada.

 
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