Novartis will buy Canadian drug firm

ZURICH -- Novartis cemented its number two position in off-patent drugs yesterday by agreeing to buy Canada's Sabex Holding Ltd. for $565 million in cash. Novartis, a Swiss firm with its research headquarters in Cambridge, Mass., predicted more consolidation in the fast-growing sector.

The deal gives the group's Sandoz generic drugs unit, with 2003 sales of $2.9 billion, an entry into the $7 billion market for copycat injectable drugs and boosts its capacity to develop biotech products -- an important skill in the emerging field of biogenerics.

Novartis, the world's fifth-largest seller of prescription drugs, has bought up several generic firms and built Sandoz into the world's second-biggest player in unpatented medicines, after Israel's Teva Pharmaceutical Industries Ltd.

Sandoz chief executive Christian Seiwald said Sabex provided a good fit in terms of technology. ''It also gives us a presence in Canada -- the world's sixth-largest generics market -- where we were not really represented. It gives us significant access to the US business market in injectables," he said.

Between 2003 and 2010, US branded injectable medicines with peak sales of $14 billion are expected to lose patent protection.