Novartis May Have a Suitor for Sandoz; Merck Closes Acceleron Deal

Less than a month after Novartis indicated it might entertain a sale of its generic unit Sandoz, Reuters reported investment group EQT and the Struengmann family, who own a significant stake in BioNTech, are considering a potential offer for the company.

EQT and the Struengmann family could pay $21.6 billion for Sandoz. Citing a report in the German publication Handelsblatt, Reuters reported that other investors were likely to join in with the acquisition should it come to pass. For the Struengmann family, Sandoz is familiar territory.

According to the report, Thomas and Andreas Struengmann sold the generic drug company Hexal to Novartis in 2005, which became part of Sandoz. In addition to a stake in BioNTech, the Struengmann brothers also own Uruguay-based Mega Pharma SA, which is also a generics company.

In October, Novartis indicated it was reviewing the Sandoz business to determine the best move to maximize value for its shareholders. Like many other generics manufacturers, Sandoz has been struggling with falling prices in the U.S. market. In its third-quarter financial report, Novartis noted that net sales for Sandoz were $2.4 billion, a 20% decline in revenue. Sales volume in the U.S. is expected to decline further due to increased competition in the generics market.

Novartis said its strategic review of Sandoz will explore all options, including retaining the business to a complete separation.

As Sandoz may soon see the auction block, Merck is finalizing its acquisition of Acceleron Pharma. The company announced that less than two months after striking an $11.5 billion deal, Merck had secured enough shares of company stock to close the deal.

Despite objections by some stakeholders, Merck has acquired enough common shares of Acceleron stock to close the merger deal. Late Friday, Merck announced it had secured 63.3% of the total number of Acceleron’s outstanding shares for $180 per share. Acceleron will now merge with Merck and its shares will no longer be traded on the Nasdaq Exchange.

The acquisition of Acceleron was met with some resistance, including objections from some Acceleron stakeholders who believed that the per-share price for the company was too low, given the potential of Acceleron’s Phase III pulmonary arterial hypertension (PAH) drug sotatercept. Shortly after the two companies announced the merger agreement in October, Avoro Capital Advisors, which owns a 7% stake in Acceleron, posted its objections to the deal. The financial company said the $180 per share price “drastically undervalues” the company. As BioSpace previously reported that Avoro said it believes Phase III data will be available by the end of 2022. If that data is positive, then the potential approval of sotatercept should translate into a higher-per-share price for Acceleron’s stock. Avoro suggested that per-share price could be as high as $250 per share.

Other shareholders, including Farallon Capital Management and Darwin Global Management, also encouraged shareholders to object to the deal. Like Avoro, they believed that the $180 per share price was too low.

“It is apparent that sotatercept has the potential to be one of the biotechnology and pharmaceutical industries’ top-selling drugs for many years to come,” Darwin Global said in a statement earlier this month.

Despite those objections, the deal is now complete and the companies will be waiting for the final data for Sotatercept.