Novartis generic drug unit relocated to Germany

Sandoz is being relocated as Novartis works on plans to merge its generics unit with recently acquired companies Hexal AG and Eon Labs. While Hexal is already based in Munich, Sandoz also holds factories there. The move also reflects Germany’s emergence as the world’s second largest market for generic drugs, after the US.

Eon is a US-based firm in which Novartis now holds a stake; Hexal has been bought outright by Novartis. Both companies are generic drugs manufacturers. The acquisitions, which cost $80 billion, are set to make Sandoz the number one in copycat drug production.

Dr Andreas Rummelt, CEO of Sandoz believes progress has been made in the integration of the three companies; “Integration planning activities are under way to ensure the completion of the transaction and successful operation of the combined company after the closings, which are expected to be completed in the second half of 2005. In the meantime, all three companies continue to operate separately as independent, directly competing companies.”

An integration steering committee and an integration office have already been created to direct the amalgamation of the companies into one unit. Approximately 70% of country general managers have been nominated in the process. Novartis said that it would maintain both the Hexal and Sandoz brands in Germany.