- Sandoz, the generic drug business being spun out by Novartis, announced plans on Thursday to build a new production plant in Slovenia to increase its capacity to make biosimilar drugs.
- Sandoz expects to pour at least $400 million in the new plant, a sum that represents one of the largest-ever international private-sector investments in Slovenia, the company said. The planned facility “underscores our ambition to be the sustainable global leader in biosimilars, a segment projected to grow double-digit annually over the next decade,” added Sandoz CEO Richard Saynor, in the announcement.
- The move comes as Novartis is in the process of hiving off Sandoz as part of a plan to slim down and focus on branded medicines. Novartis recently said it's on track to complete the separation by the second half of the year.
Sandoz is preparing to make its debut at a time when pharmaceutical companies are girding for the largest “patent cliff” they’ve faced in years.
Estimates hold that by the end of the decade, more than $200 billion in yearly revenue is at risk as the patents for some of the industry’s best-selling biologics expire. AbbVie’s Humira, for instance, is just beginning to face biosimilar competition. Others, including Merck & Co.’s cancer immunotherapy Keytruda and Johnson & Johnson’s immune disease medicine Stelara, could follow in the coming years.
Sandoz, then, is in position to capitalize. Though the Novartis division has struggled in recent years amid price erosion and competition among generic drugmakers, there were early signs of a sales turnaround last year that Novartis expects to continue. The Swiss drugmaker has estimated, for instance, that the market for biosimilars and generic pills will increase by 17% and 4%, respectively, each year through 2031 as patents covering top products expire.
Sandoz is “determined to continue leading the way on driving access to these critical medicines,” CEO Saynor said.
Construction on the plant should start this year, with operations expected to begin in late 2026.