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Investing.com -- Sandoz (SIX:SDZ) Group AG reported its full-year 2024 financial results, showing figures largely in line with expectations.
However, the company’s 2025 guidance points to a modest shortfall compared to consensus estimates, leading to cautious investor sentiment.
For 2024, Sandoz’s net sales to third parties reached $10,357 million, reflecting a 9% growth at constant exchange rates (CER).
Biosimilars drove this increase with a 30% CER rise, while generics grew 2% CER. Core EBITDA for the second half was $40 million above consensus, with a full-year margin of 20.1%, exceeding the 19.7% consensus expectation.
Sandoz guides for mid-single-digit (MSD) sales growth at CER in 2025, compared to market expectations of around 7%.
Analysts suggest that an upgrade to mid-to-high single-digit (M-HSD) growth is possible if biosimilar momentum continues.
Price erosion is expected to return to low-to-mid single-digit levels, after a 1% decline in 2024. The core EBITDA margin target of 21% aligns with consensus, with ongoing product mix optimization and transformation initiatives supporting profitability.
Mid-term projections remain unchanged, with annualized MSD CER growth through 2028 and core EBITDA margins expected to expand to 24-26%.
Sandoz also reaffirmed its commitment to a dividend payout of 30-40% of full-year core net income.
Following a partnership with Cordavis, Hyrimoz has become the leading adalimumab biosimilar in the US.
In 11 European countries, Tyruko has been launched as the first biosimilar for relapsing-remitting multiple sclerosis, with a launch in the US expected in 2025 pending FDA approval.
Growth in the US has been driven by the acquisition of Cimerli, a Lucentis biosimilar. Aflibercept (Enzeevu and Wyost/Jubbonti) and ustekinumab (Pyzchiva) are also anticipated to launch in 2025 in the US and the EU.
Jefferies analysts note that Sandoz shares have declined 12% over the past three weeks, but investor sentiment could improve with greater visibility on these upcoming launches.
The new regional sales breakdown also provides a clearer view of value drivers, with US biosimilar sales up 80% and EU sales up 15%.
While Sandoz’s cautious 2025 outlook leaves some investors wary, Morgan Stanley (NYSE:MS) and Jefferies suggest that the mid-term growth potential and strong biosimilar pipeline could support long-term gains.