Novartis is considering spinning off or selling its Sandoz generic-drug unit in a bid to revamp the business after the division failed to meet expectations.
The division, which makes generic and biosimilar drugs as cheaper alternatives to branded ones, accounts for a fifth of group sales.
However, sales slumped last year to $9.7bn, due to the onslaught of the coronavirus pandemic. It has also suffered from tougher competition and price pressures.
"Novartis has commenced a strategic review of the Sandoz Division," the Swiss-based group said in a statement alongside quarterly results.
"The review will explore all options, ranging from retaining the business to separation, in order to determine how to best maximize value for our shareholders."
It has given itself until the end of next year to decide its next move.
"It's synergies versus freedom and the ability to allocate capital and all of these considerations will of course be undertaken now," Vas Narasimhan, chief executive, said in a media briefing.
The announcement comes more than two years after Novartis started making the generics unit more independent, splitting off manufacturing and support functions.
Third-quarter operating profit rose 10% to $4.47bn, while net income grew 43% to $2.8bn. However, revenue in the US fell 20% over the period.
The company said it was confident that new medicines will boost growth in the mid- to longer term, raising peak sales estimates for two best-selling products.
Annual revenue from psoriasis and arthritis medicine Cosentyx is set to hit at least $7bn, while sales of heart medicine Entresto will reach at least $5bn, it said on Tuesday.
Zolgensma, a gene therapy that treats spinal muscular atrophy, grew 28% to $375m.
Novartis reiterated its forecast for the year, confirming that sales will grow by a low- to mid-single digit percentage, while earnings will increase by a mid-single digit percentage.
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