Sandoz Reports 29% Growth in Biosimilar Revenues for First Half of 2024

Sandoz reported strong financial results for the second quarter and first half of 2024, with notable sales growth fueled by the strong performance of its biosimilars and generics segments, while also making strategic investments in future growth opportunities.¹

While biosimilars saw a 29% rise, generics grew modestly at 1%. Growth was supported by favorable volume contributions, offset slightly by reduced price erosion. | Image credit: pla2na - stock.adobe.com

Net sales reached $5.0 billion, a 7% increase in constant currencies (6% increase in USD), which was driven by strong biosimilar demand, especially in the US with products like Hyrimoz (adalimumab biosimilar) and Cimerli (ranibizumab biosimilar). In the second quarter, net sales were $2.6 billion, reflecting a 9% increase in constant currencies and a 7% increase in USD.

While biosimilars saw a 29% rise, generics grew modestly at 1%. Growth was supported by favorable volume contributions, offset slightly by reduced price erosion. Europe saw steady sales, North America experienced strong growth, and the international region benefited from increased volume and strategic acquisitions.

The report comes after Sandoz hit several milestones from January to June, including the US and European approvals for its denosumab biosimilars (Wyost and Jubbonti), the acquisition of Cimerli, the US and European approvals of its ustekinumab biosimilar (Pyzchiva), and the German launch of its natalizumab biosimilar (Tyruko). The company also settled its patent lawsuit, clearing the way for Sandoz to launch Wyost and Jubbonti on the US market in first half of 2025.²

“These strategic achievements came alongside solid financial results, as demonstrated by strong double-digit growth in biosimilars and a positive contribution by all three regions for the second quarter and half year…. We expect momentum in our business to continue in the second half of the year, with margin expansion coming from favorable product mix, leveraging expenses on growing topline, and contribution from our transformation program,” commented Richard Saynor, CEO of Sandoz.³

Despite growing earnings, the core earnings before interest, taxes, depreciation, and amortization (EBITDA) margin decreased to 17.5% from 20.8% the previous year, mainly due to inflation and a lower core gross profit margin.¹ The company continues to progress as a standalone entity, meeting key milestones in its biosimilar business.

In the first half of 2024, Sandoz's core gross profit was $2.5 billion with a margin of 50.4%, down from 53.2% last year. The decline was due to price erosion and inflation, though strong biosimilars growth helped improve margins sequentially by 170 basis points.

Core EBITDA was $885 million, with a margin of 17.5%, compared to 20.8% last year, but improved sequentially by 210 basis points. Reported EBITDA was $576 million, down from $720 million, with core adjustments rising to $309 million due to transformation and separation costs. Core net financial expenses increased to $140 million, and core net income dropped to $484 million. Free cash flow improved to $21 million from negative $86 million. Net working capital rose to $3.9 billion, and net debt increased to $3.4 billion. The credit profile remains strong, with stable investment-grade ratings.

Saynor concluded, “Our solid performance through the first six months of the year reflects the ongoing dedication and focus of our more than 20,000 employees worldwide, powered by our common Purpose…. Biosimilar and generic medicines have increasing importance for the sustainability of healthcare. As a global leader in this industry, we are driving access to make a meaningful difference for patients.”

Sandoz recently received FDA approval of Enzeenu, a biosimilar referencing Eylea (aflibercept) for the treatment of neovascular age-related macular degeneration.

References

1. Pioneering access for patients: half-year report 2024. Sandoz. August 8, 2024. Accessed August 26, 2024. https://prod.cms.investors.sandoz.com/sites/spare89_sandoz_com/files/2024-08/Sandoz%20Half-Year%20Report%202024%20final.pdf

2. Sandoz reaches agreement with Amgen resolving all patent litigation related to its US denosumab biosimilars. Press release. Sandoz; April 30, 2024. Accessed August 26, 2024. https://www.investors.sandoz.com/sandoz-reaches-agreement-amgen-resolving-all-patent-litigation-related-its-us-denosumab-biosimilars/

3. Sandoz reports second-quarter sales and half-year 2024 results. Press release. Sandoz; August 8, 2024. Accessed August 26, 2024. https://www.investors.sandoz.com/sandoz-reports-second-quarter-sales-and-half-year-2024-results/