Novartis generic medicines unit Sandoz has reached an agreement with GSK to acquire the latter’s cephalosporin antibiotics business, strengthening its antibiotics capabilities.

Under the terms of the agreement, Sandoz will obtain the global rights to GSK’s three established brands including Zinnat, Zinacef and Fortum, in more than 100 markets.

The company will pay $350m to GSK at closing, along with an additional $150m as milestone payments, subject to the terms of the transaction.

The agreement excludes the rights to certain brands that GSK has previously divested in the US, Australia and Germany, and certain of the brands that will be retained by the company in India, Pakistan, Egypt, Japan and China.

Sandoz CEO Richard Saynor said: “This important transaction will further position Sandoz as a global leader in antibiotics – truly essential medicines that are the backbone of modern healthcare systems.

“Cephalosporins are the largest antibiotic segment by global sales and acquiring this leading business, including the established global Zinnat brand, will complement our #1 position in generic penicillins, the other key segment.

“It will also set us up for additional synergies driven by an increased promotional footprint that will support growth of both the acquired brands and the current existing Sandoz portfolio.”

Sandoz said that the deal follows its €150m joint investment with the Austrian government last year to strengthen the antibiotic manufacturing at its Kundl site.

The transaction is anticipated to be completed in the second half of 2021, subject to customary closing conditions including regulatory approvals.

Once the transaction is completed, GSK is expected to supply Zinnat to Sandoz under a manufacturing and supply agreement (MSA).

Also, the company will transfer associated manufacturing operations to Sandoz. The transition process is expected to take around four years from the closing.

GSK said that its divestiture is in line with its strategy to prioritise and simplify its portfolio and invest in the R&D pipeline and focus on new product launches.