After Failing to Gain FTC Approval, Sandoz and Aurobindo Call Off $1 Billion Deal

Broken Deal

Generic drugmaker Aurobindo Pharma has called off its $1 billion acquisition plans for multiple assets owned by Sandoz after failing to secure approval from the Federal Trade Commission.

India-based Aurobindo struck a deal with Sandoz, a division of Swiss pharma giant Novartis, in 2018 for 300 dermatology and generic drug assets. Under terms of the deal, Aurobindo would pay $900 million upfront with an additional $100 million in milestone payments. However, in a filing with the Securities and Exchange Commission this week, the company announced it had terminated that agreement.

“Aurobindo today announced the mutual agreement with Sandoz Inc. to terminate the agreement to buy the Sandoz US generic oral solids and dermatology businesses from Sandoz Inc. This decision was taken as approval from the US Federal Trade Commission for the transaction was not obtained within anticipated timelines," the company said in a filing on Thursday, according to LiveMint.

Aurobindo was the only company based in India that bid on the Sandoz products. At the time the deal was announced, N. Govindarajan, managing director of Aurobindo, said the acquisition of the products was in line with the company’s strategy to “grow and diversify” its business in the United States. In addition to the products, Aurobindo was set to acquire manufacturing facilities in Wilson, North Carolina and Hicksville and Melville, New York.

If the deal had gone through, Aurobindo said at the time the proposition was struck, it would have become the second-largest generic drug company in the U.S. based on the number of prescriptions, LiveMint reported. The deal would have also propelled Aurobindo to become the second-largest dermatology company in the United States for both generic and branded dermatology products.

In February, Aurobindo won approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application for multiple doses of Trazodone Hydrochloride tablets, a treatment for major depressive disorder. Also, the company won approval from the FDA for Oxycodone Hydrochloride Oral Solution, an opioid agonist indicated for the management of pain severe enough to require an opioid analgesic, as well as methotrexate tablets, which are used for multiple indications, including severe, active, rheumatoid arthritis and the treatment of gestational choriocarcinoma, chorio-adenoma destruens and hydatidiform mole.

The sale was orchestrated as Novartis and Sandoz were reprioritizing their businesses. As a result of the termination of the agreement with Aurobindo, Sandoz will continue to operate those assets as part of its U.S. business, Novartis said in a brief statement.

Back to news