Shareholders of Novartis (SIX:NOVN) (NYSE:NVS) have approved the proposed spinoff of Sandoz, the company's division specializing in the development and marketing of generic and biosimilar drugs. The decision was made during the shareholder vote held on Friday.
As part of the spinoff, Novartis shareholders will receive one Sandoz share for every five Novartis shares, or one Sandoz American Depositary Receipt (ADR) for every five Novartis ADRs. The distribution will occur through a dividend-in-kind, according to company statements. An ordinary capital decrease for Novartis was also approved during the voting process.
The spinoff is scheduled to take place on or around October 4, as per the company's announcement. Currently, Sandoz stands as the world's second-largest producer of these drugs.
Despite the significant announcement, Novartis' stock saw limited activity on Friday. Approximately 474,000 shares exchanged hands, well below its daily average trading volume of about 1.4 million shares. However, NVS stock did see an increase of 1.2% by Friday morning.
Sandoz's focus is primarily on biosimilars - cheaper versions of biologics drugs created using modified living cells. The company currently has 25 such drugs in its pipeline and plans to launch an additional five over time.
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