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Novartis Terminates Sale of Sandoz Dermatology Business

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Novartis AG (NVS - Free Report) announced that it will not sell Sandoz US generic oral solids and dermatology businesses to Aurobindo Pharma USA Inc.

Notably, Novartis had agreed to sell selected portions of the Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solids portfolio, to Aurobindo Pharma USA Inc. for $0.8 billion in cash and potential earn-outs in September 2018.

The company has terminated the agreement of sale as approval from the U.S. Federal Trade Commission for the transaction was not obtained within anticipated timelines.

As a result, the company will retain hydroxychloroquine in its generic unit.

Novartis intended to restructure its generics portfolio and focus on the core drugs business. The transaction was expected to be completed in the first quarter of 2020.

The company was in news recently with the FDA issuing an Emergency Use Authorization (EUA) to allow the donation of hydroxychloroquine sulfate and chloroquine phosphate products to the Strategic National Stockpile (SNS) to be distributed and used for certain hospitalized patients infected with COVID-19.

The U.S. Department of Health and Human Services (HHS) has accepted 30 million doses of hydroxychloroquine sulfate donated by Sandoz and one million doses of chloroquine phosphate donated by Bayer Pharmaceuticals (BAYRY - Free Report) for possible use in treating patients hospitalized with COVID-19 or for clinical studies.

Earlier, Novartis announced that it will provide up to 130 million doses of generic hydroxychloroquine to support the treatment of the global COVID-19 pandemic.

Novartis’ shares have lost 13.2% in the past year compared with the industry’s decline of 7.4%

Notably, there are currently no FDA-approved treatments for the severe illness caused by SARS-CoV-2. Given the alarming levels of spread and severity, some approved drugs or pipeline candidates are being tested to see if they are effective in treating infected patients.

Many other companies have also jumped the bandwagon.

Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) also announced the immediate donation of more than 6 million doses of hydroxychloroquine sulfate tablets through wholesalers to hospitals across the United States. Mylan N. V. too restarted production of hydroxychloroquine sulfate tablets at its West Virginia manufacturing facility in the United States to meet the expected increased demand, resulting from potential effectiveness of the product in treating COVID-19. The company is also taking steps to initiate the production of this product outside the United States in the coming weeks.

Meanwhile, quite a few pharma/biotech companies are working on drugs/treatments to combat this contagious disease as the number of infected patients is growing with each passing day.

Novartis currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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