GICS Sector : Healthcare
Sandoz Group AG develops, manufactures, and markets generic pharmaceuticals and biosimilars worldwide.It develops, manufactures, and markets finished dosage forms of small molecule pharmaceuticals to third parties.It also provides protein- or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services; and anti-infectives, such as active pharmaceutical ingredients and intermediates primarily antibiotics.
Sandoz reported impressive financial performance in the first half of 2025, with 4% sales growth and a 6% underlying growth rate. The core EBITDA margin expanded by 2.5 percentage points to 20%, while core diluted earnings per share grew 33% at constant currency. Remco Steenbergen, CFO, highlighted the company's strong cash generation, with management cash flow more than doubling to over $500 million.
Publication Date: Aug -08
The biosimilars segment continued to grow rapidly, with underlying sales growth of 17% in the first half and 20% in the second quarter. Hyrimoz, the company's adalimumab biosimilar, achieved a global market share of over 60%. Sandoz is confident in its midterm outlook and confirmed its full-year guidance, expecting mid-single-digit net sales growth at constant currencies and a core EBITDA margin of around 21%.
The company's pipeline includes 27 assets, covering around $200 billion of originator sales. Sandoz plans to further increase the number of assets, supported by regulatory streamlining and growing in-house development capabilities. The company is expanding its manufacturing capabilities in Slovenia and acquired Just-Evotec Biologics' in-house development and manufacturing capabilities in Toulouse, France.
Sandoz reiterated its full-year guidance, expecting mid-single-digit percentage net sales growth in constant currencies and a core EBITDA margin of around 21%. The company expects a $25 million impact this year and $70 million next year from U.S. tariffs on generics and biosimilars. Remco Steenbergen stated, "We are on track to deliver our full-year commitments and will continue to invest in long-term opportunities, centering on biosimilars."
With a P/E Ratio of 0.0, P/B Ratio of 3.13, and P/S Ratio of 2.8, Sandoz's valuation appears reasonable. The company's strong financial performance and growth prospects are reflected in its valuation metrics. Analysts estimate next year's revenue growth at 7.0%. With a Dividend Yield of 1.01% and Free Cash Flow Yield of 0.52%, Sandoz offers an attractive income stream for investors.
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Sandoz Group AG's generics segment growth of 1.5% is driven by increasing demand for affordable medicines, patent expirations of blockbuster drugs, and strategic partnerships to expand product portfolios. Additionally, cost savings from process efficiencies and investments in digitalization also contribute to growth.
Sandoz's biosimilars growth is driven by increasing adoption in developed markets, expansion into emerging markets, and a strong pipeline of products. Additionally, growing demand for cost-effective treatments, patent expiries of originator biologics, and favorable regulatory environments contribute to the 2.5% growth rate.
Sandoz offers a range of biosimilars, which are high-quality, affordable versions of biologic medicines. Biosimilars are used to treat a variety of conditions, including cancer, autoimmune diseases, and inflammatory disorders.
Sandoz offers a broad portfolio of generic medicines, which are high-quality, affordable versions of branded medicines. Generics are used to treat a wide range of conditions, including cardiovascular disease, diabetes, and respiratory disorders.
Sandoz offers a range of value-added medicines, which are differentiated versions of existing medicines. Value-added medicines offer improved convenience, efficacy, or safety compared to existing treatments.
Sandoz offers a range of anti-infective medicines, which are used to treat bacterial, fungal, and viral infections. Anti-infectives are used to treat a variety of conditions, including pneumonia, tuberculosis, and skin infections.
Sandoz offers a range of ophthalmic medicines, which are used to treat eye conditions such as glaucoma, cataracts, and age-related macular degeneration.
Sandoz offers a range of dermatology medicines, which are used to treat skin conditions such as acne, psoriasis, and eczema.
Sandoz Group AG faces moderate threat from substitutes, as patients may opt for alternative treatments or generics. However, the company's strong brand presence and patented products mitigate this threat to some extent.
Sandoz Group AG's customers, including healthcare providers and patients, have limited bargaining power due to the company's diversified product portfolio and strong distribution network.
Sandoz Group AG's suppliers, including raw material providers and contract manufacturers, have moderate bargaining power due to the company's dependence on them for high-quality inputs.
Sandoz Group AG faces low threat from new entrants, as the pharmaceutical industry has high barriers to entry, including significant R&D investments and regulatory hurdles.
Sandoz Group AG operates in a highly competitive pharmaceutical industry, with intense rivalry among established players, including Novartis, Pfizer, and Teva Pharmaceuticals.
| Value | |
|---|---|
| Debt Weight | 33.28% |
| Debt Cost | 8.54% |
| Equity Weight | 66.72% |
| Equity Cost | 17.23% |
| WACC | 14.34% |
| Leverage | 49.89% |
Value: 4.9
Growth: 4.4
Quality: 6.1
Yield: 5.0
Momentum: 3.0
Volatility: 8.3
1-Year Total Return ->
Value: 3.1
Growth: 7.3
Quality: 7.4
Yield: 0.0
Momentum: 5.0
Volatility: 5.7
1-Year Total Return ->
Value: 7.5
Growth: 2.3
Quality: 2.3
Yield: 8.1
Momentum: 3.0
Volatility: 4.3
1-Year Total Return ->
Value: 4.4
Growth: 7.4
Quality: 5.5
Yield: 0.6
Momentum: 1.0
Volatility: 7.3
1-Year Total Return ->
Value: 1.2
Growth: 1.6
Quality: 3.4
Yield: 1.2
Momentum: 7.0
Volatility: 3.7
1-Year Total Return ->
Value: 5.1
Growth: 5.8
Quality: 5.7
Yield: 0.0
Momentum: 0.0
Volatility: 1.0
1-Year Total Return ->