Sandoz announces further investment in key manufacturing facility in Austria, to support increased global demand for essential antibiotics

  • EUR 50m planned investment to support increased manufacturing capacity for finished dosage form penicillins, the leading class of antibiotics worldwide
  • New project brings total planned investment into Sandoz antibiotics network across Europe to over EUR 250 million
  • Technology upgrades at Kundl site will help to meet increasing global penicillins demand and partially offset impact of high energy costs at unit cost level
  • Sandoz stresses importance of fundamental market reforms to ensure long-term sustainability of European-based antibiotic manufacturing and supply

Basel, November 7, 2022 – Sandoz, a global leader in generic and biosimilar medicines, today announced an additional investment of EUR 50 million to support increased European manufacturing capacity for finished dosage form (FDF) penicillins, the leading class of antibiotics worldwide.

The new commitment follows plans announced last year to invest more than EUR 100 million in new manufacturing technology for production of oral amoxicillin active pharmaceutical ingredient (API) at Kundl, Austria. This investment will increase manufacturing capacity for FDFs of amoxicillin and other key penicillin products.

Sandoz also announced last year that it was investing an additional EUR 50 million for sterile API production at Palafolls, Spain. Combined with Austrian federal government plans to contribute or coordinate public funding of approximately EUR 50 million, the total amount now being invested in the Sandoz antibiotics network across Europe is over EUR 250 million.

Speaking today at a groundbreaking ceremony in Kundl, Sandoz CEO Richard Saynor said: “Antibiotics remain the backbone of modern medicine and we are seeing rapidly increasing demand following the unprecedented market swings of the past few years. This investment will help to meet that growing patient need, to support the creation of hundreds of new jobs, and to partially offset the impact of high energy prices by lowering unit costs.”

Sandoz Global Operations Head Glenn Gerecke added: “This new building, which will be ready for operation by early 2024, is part of our broader plan to drive long-term competitiveness while making a further important contribution to security of supply for critical penicillin medicines.”

The new three-floor building will be connected to the existing penicillin production facility and will cover an additional area of 1875m². It will focus on bulk formulation and fill-finish activities for penicillins for global distribution.

Automation, state-of-the-art technology for API manufacturing and simplified processing will allow Sandoz to integrate all production steps into a single process in one location, resulting in increased capacity and supply reliability. The expansion will support a double-digit increase in our future output capacity for penicillins.

Saynor added: “Minimizing production costs, particularly in the face of soaring energy costs in Europe, is key to our future success, but we also need a market framework that is sustainable in the long run.

“In economic terms, antibiotics in Europe are still treated largely as commodities, but with one big difference – producers have to supply at fixed price levels, regardless of supply and demand changes. We urgently need to change the operating framework, to introduce basic concepts such as inflation-linked pricing and tenders with criteria that go beyond price.”

Sandoz is the global leader in generic antibiotics and has been producing quality antibiotics out of Kundl for the past 75 years. It remains committed to building on that leadership and continuing a stable supply of essential antibiotics to the patients who rely on them.

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “look forward,” “believe,” “committed,” “investigational,” “pipeline,” “launch,” or similar terms, or by express or implied discussions regarding potential marketing approvals, new indications or labeling for the investigational or approved products described in this press release, or regarding potential future revenues from such products. You should not place undue reliance on these statements. Such forward-looking statements are based on our current beliefs and expectations regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that the investigational or approved products described in this press release will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Neither can there be any guarantee that, if approved, such generic or biosimilar products will be approved for all indications included in the reference product’s label. Nor can there be any guarantee that such products will be commercially successful in the future. In particular, our expectations regarding such products could be affected by, among other things, the uncertainties inherent in research and development, including clinical trial results and additional analysis of existing clinical data; regulatory actions or delays or government regulation generally; the particular prescribing preferences of physicians and patients; competition in general, including potential approval of additional generic or biosimilar versions of such products; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures and requirements for increased pricing transparency; litigation outcomes, including intellectual property disputes or other legal efforts to prevent or limit Sandoz from selling its products; general political, economic and business conditions, including the effects of and efforts to mitigate pandemic diseases such as COVID-19; safety, quality, data integrity or manufacturing issues; potential or actual data security and data privacy breaches, or disruptions of our information technology systems, and other risks and factors referred to in Novartis AG’s current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

About Sandoz
Sandoz, a Novartis division, is a global leader in generic pharmaceuticals and biosimilars. Our purpose is to pioneer access for patients by developing and commercializing novel, affordable approaches that address unmet medical needs. Our ambition is to be the world’s leading and most valued generics company. Our broad portfolio of high-quality medicines, covering all major therapeutic areas, accounted for 2021 sales of USD 9.6 billion.

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