Novartis’ struggling generics division Sandoz has lost its chief Richard Francis, who announced he is unable to “commit to [Sandoz’s] multi-year journey”.
The move has reignited rumours of a potential spin-off or buyout of Sandoz, as it is already undergoing an 18-month re-organisation, including what Novartis CEO Vas Narasimhan recently called a ‘de-integration’.
Richard Francis
Novartis decided to throw the towel in on more marginal parts of Sandoz’s portfolio after the company delivered a poor sales performance in the US last year.
It sold Sandoz’s dermatology and generic oral solid products to India’s Aurobindo Pharma, claiming that the move would allow the company to devote its time to high value generics and biosimilars.
Francis, who has a departure date of 31 March, said: “The past five years have been immensely satisfying and rewarding. I am very proud of what we have achieved as a team.
“As we announced earlier this year, Sandoz is embarking on a significant transformation. While I am excited by this […] I have decided that now is the right time to step down.”
Novartis was quick to name Francesco Balestrieri as Francis’ temporary successor. Balestrieri spend the last eight years running commercial operations in generics, most recently as Sandoz’ European region head.
He has been with Novartis for 25 years and Vas Narasimhan said Balestrieri would continue Sandoz’s transformation.
Regarding Francis’ departure, Narasimhan added: “as we initiate a multi-year transformation programme for the business and move to make it more autonomous, Richard has decided that for personal reasons he cannot commit to stay with Sandoz until the transformation is completed. I understand his decision and wish him the very best for the future.”
Novartis already have the spin-off of its eyecare division Alcon in the pipeline, with the business unit to be divested in the first half of this year. Analysts think the sale could raise $15-23bn for Novartis, which has already planned a $5bn share buyback after the sale.
A spin-out of Sandoz could raise a similar amount, although Novartis execs have ruled out any such move for the immediate future. Some investors would be in favour of the move, though others think divesting the unit could leave Novartis overexposed to the risky nature of R&D-based novel medicines.