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 have now been given notice till February, sources close to the development told Business Standard.

While the company maintains that the closure of the Centre is part of a strategic decision to shift focus from generics to differentiated products, sources said that this could also be due to the challenges faced by Novartis in India, mainly on its cancer drug Glivec.

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 the 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," the source added.

The move is significant because closure of the development centre would mean Sandoz may not be able to launch any new generic products in India in future. This is because it would need a development centre to do bioequivalence studies prior to manufacturing and launch of such products, said a pharma industry expert.

Earlier this year, Sandoz had closed its facility to develop 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.

In India, Sandoz also has 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 per cent from their previous close.