Sandoz, the generics and biosimilars arm of Novartis, has agreed to acquire GlaxoSmithKline’s (GSK) cephalosporin antibiotics business in a $500-million deal.

The agreement includes the global rights to three cephalosporin antibiotics brands, Zinnat (cefuroxime), Zinacef (cefuroxime), and Fortum (ceftazidime), in more than 100 markets. It excludes the rights in the US, Australia, and Germany to certain of those brands, which were previously divested by GSK, and in India, Pakistan, Egypt, and Japan for certain of the brands, and in China, where the rights will be retained by GSK. In 2020, the three brands had combined sales of approximately $140 million in the relevant markets.

Sandoz will pay GSK $350 million at closing, plus additional milestone payments of up to $150 million, subject to the terms of the transaction. Closing of the transaction is expected in the second half of 2021, subject to customary closing conditions, including regulatory approvals.

Under the agreement, 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 the longer term, Sandoz says it intends to manufacture Zinnat at sites in its global antibiotics production network, which includes its lead production site in Kundl, Austria. The Kundl site focuses on generic penicillin products, but the plant also produces finished dosage forms of several generic cephalosporin products.

Source: Novartis and GlaxoSmithKline