Sandoz to close generic development centre

Sandoz, the generic arm of Swiss drug maker Novartis, has decided to shut its facility for development of generic drugs in India. The facility, known as Sandoz Development Centre located near Mumbai, employed around 157 people, who are now given notice till February, sources, close to the development, told Business Standard. 

While industry sources said that the closure could also be due to the challenges faced by Novartis in India, mainly on its cancer drug Glivec, the company maintains that the closure "is part of a strategic decision, mirroring shift of its focus from generics to differentiated, complex medication. It is not linked to any other event in India". 

Confirming the closure, Novartis India Vice Chairman and Managing Director Ranjit Shahani said: "Sandoz has made a decision to close its development centre in Mumbai. Sandoz recently optimised its development centre network in alignment with its long-term development strategy, to better leverage existing technology and expertise." 

According to Shahani, the company has also closed several development centres in Latin America and the US. "This week, we already announced a significant reduction of one of our European centres," he added. 

Sandoz announced the decision to shut the development centre to it employees on Thursday in presence of some of the global heads of the company, a source said. "The management explained that it has conducted a study through McKinsey which showed that there is more growth for the company in differentiated products than in generics, following which the company took a decision to close the Centre," he said. 

While a pharma industry expert said the closure of the development centre would mean Sandoz may not be able to launch any new generic products in India going forward, Sandoz said its operations in the country will not be impacted in any way. "We absolutely will continue to launch new products through Sandoz in the future, India is a key market for our generics division as well as for Novartis. It is not necessary for a company to have its own development centre to do bioequivalence studies, those can be commissioned to any established Clinical Research Organisation.” 

Earlier this year, Sandoz had closed its facility developing active pharmaceutical ingredients (API) used in medicine formulations, which was also part of the same Centre. At that time, the company had asked around 50 people to leave. 

Apart from development, Sandoz has its presence in India through manufacturing and commercial operations in the formulation segment. According to a trade source, Sandoz’s popular brands in India include Calcium Sandoz, Adelphane, Curam, Ebutol, Rimactazid etc. 

Shahani said the company’s manufacturing site at Kalwe is not being impacted by the latest development. 

He also said Sandoz is committed to absorbing as many of the impacted employees by the closure in other Sandoz and Novartis operations in India, and beyond. "The collaboration between human resource departments across the Novartis divisions is under full steam," he said. 

Shares of Novartis India ended at Rs 681.85 on the Bombay Stock Exchange on Thursday, up 1.65% from their previous close.

(This is a revised version of the story.)