Co has not received formal offers for Sandoz to date
Announcement of spinoff not a surprise analysts
Novartis shares inch lower in afternoon trading

ZURICHLONDON, Aug 25 Reuters Novartis plans to spin off its underperforming generics unit Sandoz to sharpen its focus on its patented prescription medicines, the Swiss group said on Thursday, acknowledging it had not received any formal offers for the business to date.

The company started a strategic review of Sandoz last October examining a range of options, including retaining the business, spinning it off or selling it following a protracted period of underperformance driven largely by mounting pricing pressures in the offpatent drug sector.

Apart from some preliminary interest, Novartis has not received any formal binding offers for Sandoz so far but if any highly attractive bids did emerge Novartis would fully consider them, CEO Vas Narasimhan said in a conference call with analysts.

However, we think a spin is by far and away the most likely and best way to separate these two companies, he said.

The spinoff announcement did not come as a surprise given poor market conditions and the struggling broader market for generics, analysts said.

Previous spinouts from pharma company have created nearterm excitement given the strong track record of pharma spins outperforming parents. In this case, the competitive pressures in the generic space are likely to translate into lesser near term interest, Citi analysts…