Sandoz, the generics and biosimilars arm of Novartis, has completed the acquisition of GlaxoSmithKline’s (GSK) cephalosporin antibiotics business, in a deal worth up to $500 million.

The companies had first announced the deal in February (February 2021). Under the terms of the announced deal, Sandoz pays GSK $350 million at closing, plus additional milestone payments of up to $150 million, subject to the terms of the transaction.

Through the transaction, Sandoz acquired rights to three cephalosporin antibiotics brands, Zinnat (cefuroxime), Zinacef (cefuroxime), and Fortum (ceftazidime) in more than 100 markets. In 2020, the three brands had combined sales of approximately $140 million in the relevant markets.

The transaction excludes rights to certain brands previously divested by GSK in the US, Australia, and Germany. GSK will also retain full brand rights in China (excluding Taiwan, Hong Kong and Macau), India, Pakistan, and Egypt and to certain brands in Japan. The companies first announced the deal in February (February 2021).

Under the deal when announced in February 2021, cephalosporin manufacturing will transfer from GSK sites to Sandoz following a four-year manufacturing and supply agreement (MSA) and subsequent transfer of manufacturing operations. GSK will supply Zinnat to Sandoz under the MSA while supporting a transfer of the related manufacturing operations to Sandoz. GSK plans to close its cephalosporins manufacturing operations once the transfer of manufacturing operations to Sandoz is complete and the MSA has come to an end, currently expected to be in 2025.

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 at its lead production site in Kundl, Austria. In May (May 2021), Sandoz announced plans to invest more than EUR 150 million ($183 million) in its European-based antibiotics network.

Source: Novartis