Sandoz completes acquisition of Fougera Pharmaceuticals, positioning Sandoz as #1 in generic dermatology globally
Holzkirchen, July 23, 2012
Sandoz has completed its USD 1.525 billion acquisition of specialty US dermatology company Fougera Pharmaceuticals on a cash and debt free basis.
- USD 1.525 bn acquisition positions Sandoz as US and global #1 in generic dermatology, strengthening global leadership in differentiated generics
- US dermatology generics is an attractive industry segment, with 2011 sales of USD 2.1 billion and strong double-digit growth in recent years
- Fougera’s New York site will become Sandoz’s new global dermatology center of excellence
Fougera had net sales of USD 429 million in 2011 in the US alone and, combined with Sandoz’s existing generic dermatology franchise, this positions Sandoz as the new #1 in generic dermatology medicines both globally and in the US. Fougera has strong dermatology development and manufacturing expertise, particularly in the area of semi-solid forms such as creams and ointments, as well as a well-known branded business, PharmaDerm.
“We are pleased to combine Fougera’s strong portfolio and pipeline of dermatology medicines with Sandoz’s existing global leadership positions in biosimilars and generic injectables, ophthalmics and antibiotics,” said Sandoz’s global head Jeff George. “This will significantly enhance the range of affordable, high-quality medicines that Sandoz can offer to patients and payors in the US and around the world.”
Dermatology generics is an important and rapidly-growing segment of the US market, which IMS estimated at USD 2.1 billion in 2011 sales and which had strong double digit annual growth between 2009 and 20111. Dermatology covers a range of often complex diseases from acne to psoriasis to fungal infections to skin cancer.
In addition to building on the two companies’ overlapping customer base in the US, Sandoz will leverage both its leading position in the US generics sector and its presence in over 140 countries to expand Fougera’s broad dermatology portfolio to new markets around the world.
“We welcome Fougera into Sandoz and Novartis and we look forward to working together to meet the needs of all our stakeholders,” said Don DeGolyer, President of Sandoz US. “Sandoz and Fougera share a strong culture based on quality, excellence, and a determination to succeed in the interests of the patients we serve.”
Fougera, whose history as a leader in US dermatology goes back more than 160 years to its founding in 1849, will be integrated into Sandoz’s US business based in Princeton, New Jersey, but will continue to exist as a separate legal entity. Fougera, based in Melville, New York, will be home to a new center of excellence for generic dermatology development and manufacturing within the global Sandoz network.
Fougera Pharmaceuticals currently employs approximately 700 people across its US sites. It operates two main businesses: Fougera, a leading player in the US dermatology generics sector with 45 products and more than 200 SKUs, and PharmaDerm, a branded specialty pharma business with 17 brands and over 40 SKUs.
The sellers comprise a consortium of private equity funds led by Nordic Capital Funds V and VI, including DLJ Merchant Banking Partners (a Credit Suisse affiliate) and Avista Capital Partners.
These materials contain forward-looking statements that can be identified by terminology such as “create”, “planned”, “will enhance”, “will leverage”, or similar expressions, or by express or implied discussions regarding the potential impact of the acquisition of Fougera on Sandoz and Novartis; the potential future sales or earnings of the Novartis Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of the Group regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Novartis or its Sandoz Division will achieve any particular future financial results or future growth rates or that Novartis or Sandoz will be able to realize any potential synergies, strategic benefits or opportunities as a result of the acquisition. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; disruptions from the integration of Fougera making it more difficult to maintain business and operational relationships, and relationships with key employees; unexpected product manufacturing issues; uncertainties involved in the development of new generic pharmaceutical products; unexpected patent litigation outcomes; unexpected inabilities to obtain or maintain exclusivity periods for developed products; competition in general; government, industry, and general public pricing and other political pressures; the impact that the foregoing factors could have on the values attributed to the Group's assets and liabilities as recorded in the Group's consolidated balance sheet; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Novartis is providing the information in these materials as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.
Sandoz, a Division of the Novartis group, is the second-largest generic pharmaceuticals company globally, offering a wide array of high-quality, affordable products that are no longer protected by patents. Sandoz holds the #1 position globally in biosimilars as well as generic injectables, ophthalmics, dermatology, and antibiotics. Sandoz has an overall portfolio of about 1000 compounds and sells its products in 140 countries. Key product groups include antibiotics, treatments for central nervous system disorders, gastrointestinal medicines, cardiovascular treatments and hormone therapies. Sandoz develops, produces and markets these medicines along with pharmaceutical and biotechnological active substances and anti-infectives. In addition to strong organic growth in recent years, Sandoz has made a series of acquisitions including Lek (Slovenia), Sabex (Canada), Hexal (Germany), Eon Labs (US), EBEWE Pharma (Austria), and Oriel Therapeutics (US). In 2011, Sandoz employed approximately 24,000 people (full time equivalents) worldwide and posted sales of USD 9.5 billion.
Fougera Pharmaceuticals Inc. operates two primary divisions in the US focused on specialty pharmaceuticals in dermatology: Fougera, its generic dermatology medicines business, and PharmaDerm, its branded dermatology business. Founded in 1849, the Fougera division is the leading manufacturer and distributor of a wide range of topical products. The PharmaDerm division is dedicated to developing and commercializing novel prescription products to treat diseases and conditions of the skin – the largest organ of the human body. For more information on Fougera’s complete line of products, please call Customer Service at (800) 645-9833 or visit the company online at www.fougera.com. Information on PharmaDerm products can be found online at www.pharmaderm.com and savage products at savagelabs.com.
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1 IMS MIDAS at gross ex-manufacturer prices, excluding OTC
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