Sandoz Group, a leading generic-drug maker, has made its trading debut on the SIX Swiss Exchange after being spun off from Novartis. The company was valued at approximately 10.3 billion Swiss francs ($11.18 billion) upon its launch.
Sandoz’s shares opened at CHF24.00 but dropped to CHF23.10 at 0830 GMT. On the other hand, shares of Novartis slipped by 3.85% to CHF88.40.
Despite the promising debut, Sandoz’s market capitalization fell below the estimates made by some analysts. Jefferies analysts had projected a valuation ranging from $12.3 billion to $16.2 billion, while Deutsche Bank Research had stated that Sandoz’s market cap could be in the $11 billion to $13 billion range.
Focus on Innovative Medicines
Novartis’s decision to spin off Sandoz is in line with the trend in the pharmaceutical industry, where companies have been divesting assets to concentrate on developing innovative prescription medicines. This move marks an important milestone for Novartis.
Novartis has confirmed that its 2023 guidance will remain unchanged following the spinoff. The company also plans to maintain its current approach to capital-allocation priorities, including share buybacks and dividend policy.
Sandoz recorded impressive financial results last year, with $9.07 billion in net sales, primarily driven by its generics business. The company achieved a net profit of $848 million.