Earnings call transcript: Sandoz Q3 2025 sees biosimilars boost growth

Sandoz Group AG reported a strong performance for the third quarter of 2025, driven by robust growth in its biosimilars segment. The company achieved a 6% increase in net sales at constant currencies for the quarter, with biosimilars alone growing by 13%. Despite facing price erosion, the company upgraded its full-year core EBITDA margin guidance to 21-22%. The market responded positively, with Sandoz’s stock showing a slight increase of 0.08% in early trading, continuing its impressive 41.6% gain over the past six months. According to InvestingPro data, Sandoz is currently trading near its 52-week high of $66.20, with the stock appearing overvalued based on InvestingPro’s Fair Value assessment.

Key Takeaways

• Sandoz achieved 6% net sales growth in Q3 2025 at constant currencies.
• Biosimilars segment grew by 13%, contributing significantly to overall performance.
• The company upgraded its full-year core EBITDA margin guidance to 21-22%.
• Sandoz launched 115 new medicines in the first nine months of 2025.
• European market remains the strongest, accounting for over 50% of sales.

Company Performance

Sandoz demonstrated solid growth in Q3 2025, primarily driven by its biosimilars division which saw a 13% increase in sales. This growth reflects the company’s strategic focus on biosimilars, with 31% of net sales in Q3 attributed to this segment. The European market continues to be a stronghold for Sandoz, contributing more than half of its total sales. The company’s strategic initiatives, including expanding manufacturing capabilities in Slovenia and a partnership with Just-Evotec, are set to bolster its competitive position.

Financial Highlights

• Net sales growth: 6% at constant currencies in Q3
• Biosimilars growth: 13% at constant currencies
• Upgraded full-year core EBITDA margin guidance: 21-22%
• Volume growth contribution: 8 percentage points
• Price erosion: 3 percentage points

Outlook & Guidance

Sandoz expects mid-single-digit sales growth for the full year and is preparing for new product launches in Europe and the U.S. The company remains optimistic about its biosimilar pipeline and anticipates regulatory changes that will support further development in this area. Sandoz projects an EPS of 3.31 USD for FY2025 and 3.89 USD for FY2026, with revenue forecasts of 11.07 billion USD and 11.9 billion USD, respectively.

Executive Commentary

CEO Richard Saynor expressed confidence in the company’s biosimilar strategy, stating, "We are making excellent progress on our biosimilar launches." He emphasized the global market potential, saying, "We see this as a global market, not just a U.S. market." These comments highlight Sandoz’s commitment to expanding its reach and capitalizing on biosimilar opportunities.

Risks and Challenges

• Continued price erosion, expected to remain at 3-5%, could impact margins.
• Regulatory changes, while mostly positive, may pose unforeseen challenges.
• Competition in the biosimilars market is intensifying, particularly in Europe.
• Supply chain disruptions could affect manufacturing and distribution.
• Macroeconomic pressures, such as currency fluctuations, may impact financial performance.

Q&A

During the earnings call, analysts inquired about the impact of regulatory changes and competition on Sandoz’s future performance. The company expressed confidence in its ability to launch the Afclear biosimilar in Europe despite competitive pressures. Executives also addressed concerns about price erosion, reiterating their expectation of a 3-5% decline, which they are actively managing through strategic pricing and cost efficiencies.

Full transcript - Sandoz Group AG (SDZ) Q3 2025:

Craig Marks, Head of Investor Relations, Sandoz: Good morning ladies and gentlemen and welcome to the Sandoz call today. I will now pass on to Craig Marks, Head of Investor Relations, for his opening remarks. Thank you and welcome to the Sandoz 9 months 2025 update call which focuses on sales. We plan to publish our full financial results for the year on the 25th of February. Earlier today we published a press release and an accompanying presentation on our website which we’ll follow on today’s call. You can find these documents at sandoz.com investors. Joining me on today’s call are Richard Saynor, Chief Executive Officer, and Remco Steenbergen, Chief Financial Officer. Please turn to Slide 2. Our sales announcement, presentation, and discussion include forward-looking statements. Please see our disclaimer here. Please turn to Slide 3. Richard will begin today’s presentation with a.

Richard Saynor, Chief Executive Officer, Sandoz: Summary of the highlights from the first.

Craig Marks, Head of Investor Relations, Sandoz: Nine months of the year followed by.

Richard Saynor, Chief Executive Officer, Sandoz: An update on the business.

Craig Marks, Head of Investor Relations, Sandoz: Remco will cover the sales performance.

Richard Saynor, Chief Executive Officer, Sandoz: As full year guidance.

Craig Marks, Head of Investor Relations, Sandoz: Following the wrap up of the presentation, we’ll be happy to take your questions.

Richard Saynor, Chief Executive Officer, Sandoz: With that, I will now hand over to Richard.

Craig Marks, Head of Investor Relations, Sandoz: Please turn to slide four. Thank you, Craig, and hello everyone. It is a pleasure to welcome you all to today’s call and I’m looking forward to taking you through another strong Sandoz performance. Please now turn to slide 5. I am pleased that the momentum in our business has continued. We are making excellent progress on our biosimilar launches and the pipeline as well as delivering strong ongoing commercial execution. In the first nine months, we achieved 5% net sales growth at constant currencies, though the underlying result amounted to 6% in quarter three alone. Growth further accelerated to 6% at constant currencies and 7% on an underlying basis, with biosimilars growing by 13% at constant currencies. We also saw good performance across all geographies, including a significantly improved result in North America.

In line with our commitment, we successfully introduced several key medicines this year, including Pisteva, Wyost, and Jubbonti in the U.S. Looking ahead, we are preparing for additional launches, notably Wyost, Jubbonti, and Afclear in Europe as well as Tyruko in the U.S. These launches will further strengthen our commercial footprint and long-term growth potential. This momentum supports our confidence in upgrading our full-year core EBITDA margin guidance. Today, we continue to expect net sales to grow at constant currencies by mid-single-digit percentages, and while we anticipate that the core EBITDA margin will be in the range of 21% to 22%, now let’s move to more details of the business performance starting with slide 6. This was our 16th straight quarter of growth, primarily driven by biosimilars that represented a record 31% of net sales.

The effect of this positive mix of sales, as well as the momentum in the business, was a key driver in the decision to upgrade our core EBITDA margin guidance today. Please turn to slide 7. Before we deep dive into biosimilars, let’s take a look at generics. In the first nine months of the year, we’ve delivered a full launch program with 115 medicines launched and around 280 total launches around global markets. Notable launches include ListX and Einsucros in the U.S. Our pipeline is strong with over 400 assets currently in development, targeting around $220 billion in originator sales, covering approximately 65% of LOE opportunities. It is worth noting that our generics growth of 2% this year has been materially impacted by a shortfall in our penicillin B2B business. This began with the imposition of U.S. tariffs that led to reduced associated exports from China to the U.S.

In turn, this then prompted Chinese suppliers to very significantly lower prices for key penicillin APIs, including some that we sell to other businesses. As the last remaining fully vertically integrated producer in Europe, we are pleased to see growing recognition by policymakers of the need for sustainable European supply of penicillins. More action is required and we call on the European Union and national governments to implement measures that reduce geopolitical exposure and safeguard the long-term sustainability of European-produced penicillins. Please turn to Slide 8. Turning now to biosimilars. We achieved half of our 2025 biosimilar launch milestones so far this year and we are fully on track to deliver the balance by the end of the year. In the first half, we launched Pisteva in the U.S., followed by the successful rollout of the first ustekinumab biosimilar auto injector in Europe.

Our Q2 launch of Wyost and Jubbonti in the U.S. has also gone extremely well. These were the first and only interchangeable denosumab biosimilars in the U.S., providing new affordable treatment options for over 10 million patients. I’m looking forward to the remaining biosimilar launches before the end of the year, namely Wyost, Jubbonti, and Afclear in Europe, as well as Tyruko in the U.S. Please turn to Slide 9. Biosimilars continue to be a powerful growth engine for Sandoz, delivering constant double-digit performances and enhancing our margin. Our biosimilar portfolio is not only growing but evolving through strategic launches, geographic expansion, and innovation. Let me now dive into the performance of our biosimilars, starting with Pisteva on Slide 10. It is encouraging to see the overall biosimilar ustekinumab participation in Europe increasing, outpacing the adoption rates we saw with adalimumab.

This signals a growing confidence in biosimilars among healthcare providers and payers. We’ve seen strong momentum in Europe where Pisteva has quickly gained traction following its launch last year. This has been supported earlier this year by the successful European launch of the first biosimilar ustekinumab auto injector. Our European market share has been broadly stable in a market experiencing strong growth. Finally, we’re planning for additional Pisteva launches next year, including entry into exciting markets like Brazil. Please now turn to Slide 11. Switching to Hyrimoz, now our largest selling medicine. It continues to demonstrate strong and consistent performance globally with stable market share amid rising biosimilar participation. As shown in the chart, our global market share has been maintained, and at the same time biosimilar participation has steadily increased, climbing from 55% to around 65% in 18 months, a clear indication of growing acceptance and adoption in Europe.

Hyrimoz remains a strong foothold while international sales growth has been exceptional this year. In the U.S. we lead the market through a dual strategy, namely private label and own brand. Together they offer the broadest payer coverage, enabling us to capture originator share and reinforce our leadership position. This performance reflects the strength of our portfolio, the effectiveness of our commercial strategy, and our commitment to improving access to high quality biosimilars worldwide. Now please turn to Slide 12. Let me now move to Tyruko, our biosimilar natalizumab, which continues to deliver encouraging progress in Europe. We are proud to be the first and only biosimilar approved in Europe for relapsing remitting multiple sclerosis, a major step forward in expanding treatment options for patients. Looking ahead, we have additional launches planned in the U.S.

and across various European and international markets, reinforcing our commitment to leadership in neuroimmunology and biosimilars. Please turn to Slide 13. Omnitrope continues to deliver strong performance as the market leading biosimilar for growth hormone related disorders, with a global market share reaching 37%. This steady upward trajectory from 24% in 2022 reflects our ability to consistently grow share in a competitive landscape, supported by good sales growth and rapidly expanding markets. The international region has been a key driver of our performance this year. Even as we navigate increasing levels of competitor activity in the region, our commercial execution, trusted brand, and global reach position Omnitrope to continue being a leader in this space. Please turn to Slide 14. Let’s now look at the recent U.S. launch of Wyost and Jubbonti, which marked a major milestone in our biosimilar strategy.

With both medicines achieving first to market status and demonstrating strong early momentum, we rapidly established commercial footprint covering over 80% of denosumab volumes, ensuring broad access across key provider networks. We led with an interchangeable product exclusively, and in addition, Q code exclusivity drove an important early advantage in market positioning. We’re seeing early wins with major players and recognition by the NCCN as a substitute for reference brands. Denosumab further validated our clinical and commercial approach. This launch not only reinforces our leadership in biosimilars, but also sets the stage for continued growth and patient impact in osteoporosis and the oncology space. Now please turn to slide 15. Sandoz continues to advance one of the industry’s most comprehensive biosimilar pipelines with 27 assets spanning all stages of development.

We have five near-term launches and assets in clinical development, five assets in regulatory review, and have nine additional assets in early development targeting $50 billion of originator sales. Now let’s turn to slide 16. Finally, as we continue to lead in biosimilars, regulatory streamlining is emerging as a powerful enabler of growth and innovation. With 27 assets currently in development, our pipeline targets approximately $200 billion in originator sales and covers 64% of expected loss of exclusivity events over the next decade. Recent regulatory shifts are helping reduce complexity and cost across clinical development, ultimately accelerating access for patients and easing pressure on healthcare systems. These changes not only strengthen our pipeline, but also open up additional opportunities to expand our leadership position in biosimilars. By embracing regulatory innovation, we are well positioned to deliver more medicines more effectively to more patients worldwide.

With that, I’ll hand over to Remco. Please turn to slide 17.

Richard Saynor, Chief Executive Officer, Sandoz: Thank you Richard and hello everyone. Please move to slide 18. I’m very pleased to expand on our sales performance, which reflected strong momentum and execution across our business. Our mid single digit growth in the first nine months has comprised progressively improving results as we have moved through the year, with biosimilars again growing by a double digit %. At a regional level, the launches of Tyruko in 2023 and Pisteva in 2024 are continuing to drive European growth, while the international result reflected the ongoing success of Omnitrope and Hyrimoz in North America. The success of the rollout of Wyost and Jubbonti has been accompanied by the standout launch of Paclitaxel at the end of last year. Finally, I’m pleased that we have upgraded our full year core EBITDA margin guidance today, a direct result of the favorable mix of sales driven by the contribution of biosimilars.

Please turn to slide 19. Breaking down our sales performance this year, you can see that volumes contributed 8 percentage points to growth, while price erosion returned to a more familiar 3 percentage points. Let’s now dive into the business and regional mix on slide 20. Biosimilars increased as a proportion of total net sales to 29% this year compared to 27% in the first nine months of 2024. When looking at the Q3 performance, biosimilars comprised a record 31% of net sales, driving the upgrade to our core EBITDA margin guidance. Our regional sales mix has remained broadly unchanged, with over half of our business in Europe, where we hold a strong leading position. International represents a quarter of net sales, with 22% coming from North America. Please turn to slide 21.

Biosimilars delivered strong underlying growth, 17% in both Q3 and in the year to date, with launches in the last 12 months having a key impact. Generic sales increased by 3% in Q3 and by 2% in the first nine months, despite the effect of the B2B performance that Richard mentioned earlier. The overall generics result primarily reflected the impact of launches in 2024. Now let’s have a look at the performance of our three regions on slide 22. So far this year, our geographic performance has been nicely balanced, with the regions having delivered similar levels of underlying growth. European sales grew by 6% in both Q3 and in the first nine months of the year. Strong growth in biosimilars continued, led by demand for Binocrit and the contribution from the launches of Pisteva and Tyruko.

International sales grew by 4% in the quarter and by 6% for the first nine months due to strong contributions from Ironmas and Omnitrope. North America sales grew by an underlying 7% in the first nine months and by a full 12% in Q3 with the ongoing benefit of the 2024 Paclitaxel launch accompanied by this year’s ListX ironsucrose and Wyost and Jubbonti rollouts, please turn to slide 23. Now let’s look at our guidance for the year. After achieving a mid single digit growth in net sales in the first nine months, we expect a similar result over the full year. The higher mix of sales in favor of biosimilars means that we now expect a 21% to 22% core EBITDA margin this year. This represents an upgrade from the prior guidance. Outside of guidance, our foreign exchange expectations are unchanged for 2025.

We anticipate that if the latest spot rates were to prevail for the rest of the year, we would continue to anticipate 2 percentage points tailwind to net sales over the full year. The core EBITDA margin would continue to face a limited adverse impact of less than 50 basis points which will be in line with what we had in 2024. If you look at currency movements based on average rates in the first nine months, we would anticipate an immaterial impact on net sales and on the core EBITDA margin. With this I hand back to Richard. Please turn to slide 24.

Craig Marks, Head of Investor Relations, Sandoz: Thank you so much, Remco. I’d now like to take a moment to wrap up the presentation on slide 25. The key takeaway from today’s update is another strong performance supported by excellent progress in our biosimilar platform. Our performance is exactly in line with our plans and strategic roadmap, including the launch program and the pipeline. Looking ahead to the rest of the year, we’re preparing for several exciting launches that will support our strong momentum and keep us on track to meet our ambitious midterm outlook. This is more than just performance. It’s progress with purpose, positioning us well for sustained and attractive growth. I am grateful to my colleagues around the world for delivering another excellent quarter and I thank you all for your continued support and confidence in Sandoz.

With this, please turn to slide 26 and I will ask the operator to open the lines for Q&A. Thank you, ladies and gentlemen. We will now begin our Q&A session. If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. If you have dialed in, please press star 9 to enter the queue. Once your name has been announced, you can ask a question. If you want to withdraw your question, please lower your hand using the raise hand function in the Zoom app or via telephone, press star 9. Thank you. Our first question comes from Harry Sephton with UBS. Please unmute your line and ask your question. Brilliant. Thank you very much for taking my questions. The first one, following the HHS briefing yesterday, there’s clearly an intent to meaningfully increase competition in the U.S.

biosimilar market. Richard, I just wanted to get your high level thoughts on whether you see this as an initial step to potentially commoditize the U.S. biosimilar market. You talked previously about how the U.S. small molecule generics market isn’t an attractive market for Sandoz. Just want to get your high level thoughts on what the implications from this could mean. My second question, just on the 2026 launches, can you confirm your expected timing for the SEMA Canada launch and whether you’re expecting that you’ll be in the first wave of January generic launches there? Also, just on the relaunch of Simerle, what your expectations are there in terms of timing and also the market environment given that it will be quite different now that there is an aflibercept biosimilar available as well. Thank you, thank you very much for your questions, Harry.

Look, I’m super pleased with the HSS enamel. We’ve been working very closely with the AAM and Karen, our U.S. President, to position this. I think this is a really good move. I’m very excited about that. Also encouraged to see similar moves with other regulators, particularly Canada and Europe. To be brutally honest, if you looked at the number of biosimilars for things like adalimumab, denosumab, I would argue that a lot of the commoditization happens already. I don’t think that it will fundamentally change the framework. This is still an expensive hobby. It’s still probably $80 to $100 million. You still need manufacturing. We always look at this as a global market, not just a U.S. market. You still have the patent challenges. This is just a step in the right direction.

If you look, there’s something like 150 biologics that either come off patent or will come off patent in the next 10 years. That is a significant opportunity and clearly the vast majority of those, we don’t see anybody developing a biosimilar. This move means that we can expand our pipeline over the next few years. We can bring more products to patients and I’m really, really excited. If you think even further out, you then get into ADCs, bispecifics, and other more complex biologic products. This is a huge opportunity and I’m really thrilled about this moving in this direction. On sema, I’ve got nothing really more to add than from previous calls. Clearly our aspiration will be to launch amongst the first wave. As I said, this was outside any guidance we’ve given for the business. We see this very much as an experiment.

I have no idea how this market’s going to evolve, how this product will evolve. It’s a unique set of circumstances and it’s also noting that nobody as yet has got an approval, so it’s way too early to give any more details in terms of timing. Clearly we would aspire to be amongst the first wave. Similarly, again, we would look to return that to the market in Q1. Also, given the guidance that our intention, we’ve settled on the Aflibercept launch. Again, we’d look to launch that next year. I think the combination of the two, and so we’re pleased that we’re to bring that back for patients sometime in Q1 and then launch Aflibercept later in 2026. Thank you. Our next question comes from Florent Cespedes with Bernstein. Please unmute your line and ask your question.

Richard Saynor, Chief Executive Officer, Sandoz: Good morning everyone.

Craig Marks, Head of Investor Relations, Sandoz: Florent Cespedes from Bernstein. Quick question on 2026, could you share with us which are the next biosimilar products that you expect to launch on the different markets? This would be great. My second question on the penicillin situation, what is the next step? What do you anticipate in terms of decision from the European authorities and some color on the time frame? Thank you. A lot of the launches that will show material growth in 2026 are being launched as we speak, both in Europe. Clearly, we’re excited to be launching Jubbonti for both the major indications in Europe. We’re seeing great traction in the U.S., which will clearly flow into next year. We’re looking to launch Tyruko in the final quarter, Tyruko this year, which again will flow very strongly and also bring that to a number of the European markets, additional European markets.

We’re about to launch Aflibercept across many of the European markets in the final quarter and again launching Aflibercept and reintroducing Simile in 2026, as well as numerous other launches in many of our international markets and also assuming that the base business will continue to grow, just as we’re seeing strong growth in the adalimumab market globally and also the Omnitrope market globally. I think a mixture, but clearly everything now is in play, everything is approved, and I think we’re well positioned to set ourselves up for 2026. Penicillins, I mean, partly. Look, it had an impact. I wanted to use this platform to really highlight the critical nature of this product. We’re the only vertical manufacturer of penicillins left in the Western world. You’ve heard my frustration in the past that we sell this product more cheaply than a packet of M&Ms.

We’re working with regulators and governments both in the U.S. and in Europe. We recently got the Ausback Memorandum, which was requesting European governments acquire at least 23% of all their antibiotics from vertical suppliers. Our challenge now is we turn that into law and we execute that. These are critical assets, and it’s important that governments understand the role that they play and move that forward. I’m pleased about the memorandum, but now we need to turn that into action, and I wanted to use this platform to highlight the importance of that. It’s not material to the overall business. It had an impact in quarter three, but I think it was important that I use this opportunity to talk about it. Thank you. Our next question comes from Simon Baker with Rothschild & Co. Please unmute your line and ask your question. Thank you for taking my questions.

Just continuing on the HHS announcement, a couple of things, if I may. Firstly, Richard, with that lower development cost level that these regulations envisage, what could that do to that $200 billion pipeline size that you have? On this point about commoditization, if this were a commoditized market, then each of you would have a 10% market share of adalimumab, and that’s obviously not the case. Your share is way, way above that. I think, could you just give us your thoughts on the sustainability and also just, really, your advantages within the biosimilars market in terms of commercial skills and the sustainability of that? Moving on to a couple of product questions, I wonder if you could give us a bit more color on Tyruko penetration in the EU. It looks like it’s kind of going sideways at the moment. Is that a function of where it’s launched?

Will that change as more markets come on stream, or are there any other dynamics there? For Pisteva, you pointed out that the rate of biosimilar participation is faster than Humira. I just wonder if you could remind us by how much, just to sort of quantify that impact. Thanks so much. Okay, thank you, Simon. Really great questions. I think the size of the opportunity is still about $200 billion in total, absolute. It doesn’t really change that. Again, let’s take a step back. We select our pipeline from a European lens and we see the U.S. as an opportunity. I know we tend to over-index the U.S. a little bit, but give it the visibility of the data. We would never develop a biologic specifically for the U.S.; we would develop it for Europe and then clearly file it in the U.S.

Otherwise, if you look at the situation with Enbrel, we wouldn’t have a business because somebody thinks that a 30-year patent life is somehow acceptable. You still have all of those challenges. First and foremost, it’s focusing on that. Yes, I think it reduces potentially the cost of development, but there are many other components. We talk about legal, you talk about the commercialization. I’m delighted with our denosumab performance. We were by far the strongest performer of denosumab in the market. We launched first, we had the only Q code. We really knew how to work and position this product. Similarly with adalimumab, we’re by far the largest player with by far the best coverage in that market. I think our commercial capabilities coupled with our clinical, legal, and manufacturing platforms, and then similarly we see these as global assets. We don’t see this as U.S. assets.

We’re the number one biosimilar player in Europe. We’re very strong, we’re seeing strong growth in international. All of those things. It’s a little bit, when you look back, I have a lot of respect for some of the Indian players in small molecule generics, yet the reality is they’re nowhere in Europe because they struggle to build scale. I think you see a very similar pattern in biosimilars. I think we’re extremely well positioned. We’ve launched more biosimilars than anybody else. We have a stronger pipeline than anybody else. Clearly we would see this as an opportunity to further invest and expand and really leverage that strength. Tyruko, yes. I mean, now, we would look to see growth as we launch this product. A lot of this product is tendered, so you tend to get a rapid conversion and then it tends to stabilize.

We will see growth as we both introduce that into North America and we continue to launch it in other European and international markets as we go into 2026. Pisteva, yes, I think it’s more of a reflection of clinicians and payers now are rapidly accepting biosimilars. I think the days of debate around the acceptability of biosimilars really has gone and clearly we see a nice performance with Pisteva and now in a nice position that we’re the only company launching an auto injector across Europe. I think again, well positioned to deliver growth as we go into 2026. Pleased with where we are. As I said, we’ve been lobbying this from HSS and similar from the European regulators for a while. I think common sense has prevailed.

Richard Saynor, Chief Executive Officer, Sandoz: If I may add to what Richard has said, and particularly on the HHS. I think when we take a step back and we look at the size of the pie and the $200 billion on biologics and generics is unchanged. What it of course does is that a lot of the biological medication for which no biosimilar has been developed or will be developed because the size is too small, becomes suddenly accessible. We think that with the large molecule also from a competitive perspective, not much changed. As we said, we are very well positioned, but we can grab a larger part of that pie and the competitive barrier is still very high. It takes a long time. We look very, very enthusiastically because if you fast forward 10 years from now and you look what part of the pie we can go after, it’s incredible.

The second part is that the pie, once a biosimilar is in the market, has often grown because a lot of medication cannot be used because it’s too expensive. When we come in the market, that pie grows. If they’re coming more, we can go after more molecules and the market will grow. It’s a gigantic growth opportunity. To put so much effort behind it, I think the additional point versus generics is still with APIs coming from China. With biosimilars, it’s a vertical integrated manufacturing process. It’s much more difficult. We can produce in Europe. Scale is an incredible benefit. We have to scale on the commercial, but we also have that on the development and manufacturing. If I listen to your questions, this part I just wanted to add because that’s why we are so excited and we think it’s just an incredible, incredible opportunity.

Craig Marks, Head of Investor Relations, Sandoz: Right, thank you very much. Our next question comes from Charlie Haywood at Bank of America. Please unmute your line and ask your question. Charlie Haywood, Bank of America. Thanks for taking the questions. I have two, please, for Remco. The first one, on your initial 24 to 26% midterm margin outlook, you’ve obviously added one biosimilar, two private label biosimilar contracts, and your biosimilars mix has already reached your 2028 target of 30%, which drove partly or drove your margin upgrade today. Given that momentum, how are you feeling about this midterm margin target, and is it fair to assume you’re trending towards the upper half? The second one, just on 2026, I think the potential upside from the biosimilar launches, launches Semad private label, and similarly relaunch into 2026 are well known.

We wanted to ask if there are any headwinds or potential moving parts outside of that that you would flag into next year, or is this really a very clean year on paper?

Richard Saynor, Chief Executive Officer, Sandoz: Thank you, Charlie. Thank you for that question. At this point in time, not surprised. I would say that the midterm guidance stays great. We expect a mid single digit growth and between 2024 to 2026, and for 2026 versus this year, you can expect a continual progressive growth in two directions, also for the margin. Of course, we are looking also at the prior discussions which were asked, right. With the enormous amount of opportunities which are there over the coming years, we of course also have a look. Hey, how can we capitalize on this? If you have to think about next year’s and the one off, say depending on how Just-Evotec develops, if that.

Craig Marks, Head of Investor Relations, Sandoz: would come to a conclusion, we will.

Richard Saynor, Chief Executive Officer, Sandoz: Have some additional costs next year related to just the Just-Evotec partnership. You have to take that in consideration because that was not there before. We are very happy because on balance we progressively want to move on and we want to find the right balance between the short and the long term. As you said before, there’s so much opportunity and so much more we can grasp. We find the right balance and we want this company in 10 years from now to be even more formidable than it’s now. That’s what we’re working on in the short and the long term. For the moment, the midterm guidance stands correct but with lots of opportunities.

Craig Marks, Head of Investor Relations, Sandoz: Thank you. Our next question comes from Thibault Boutherin. Please unmute your line and ask your question. Yeah, hello. Thank you. Just a question on Afclear in Europe and the launch in Q4. Eight biosimilars approved and ready to launch. It looks very competitive. Bayer is also saying they seem very confident they can hold off to some extent biosimilar with a switch to high dose. If you could comment on your expectations here and how you differentiate in that context. Second question just on the biosimilar Humira. Is it fair to expect another price cut in private label next year and could it be the same extent as this year? If you could comment on the pricing here and then just a clarification or sort of Tyruko U.S. You seem quite confident. I think it was not the case to that extent before.

If you could just help us understand the degree of confidence for the approval by the end of the year would be helpful. Thank you. Okay, thank you. So Afclear. We’re very confident in the launch. We’re used to competition, you know, denosumab, eight competitors in the U.S. In Europe we used a significant number of competitors. You look at ustekinumab, I think it was 11 or 12 and we still took a lead position. I think every originator always says that they’re in a unique position to maintain share at sea. I think we have an amazing commercial platform and some great colleagues in Europe who I know will execute and I’ve seen some of the plans and I’m very excited about them. I think we’re well positioned to capture a significant share of the market given the strength that we have and the footprint that we have.

I think your question on Humira. Yes, clearly it’s a competitive market. We’ve always been extremely open about that and I would anticipate that as we continue to maintain our relationship as an own label or an own label product that clearly pricing would come down next year as we continue to renew our contract with that provider. I think probably similar range to this year. And to Tyruko, yeah, very confident that we will launch. We’ve aligned in terms of the JCV assay and now we’re just positioning for the prelaunch phase and as again we’re now committed to launch this specifically this quarter. Thank you. Our next question comes from Sidhartha Modi at Barclays. Please unmute your line and ask your question. Hi there. Thanks for taking my question. The first one is on your Jubbonti, like you have had a very, very good launch in the U.S.

and obviously you are on track launching in Europe. Just wanted to know, have you kind of signed any long-term contracts in Europe so that you can lock in low single-digit, you know, selling price declines, or the pricing would still remain under pressure every cycle? The second question is slightly different on competition. Obviously, on Monday we saw Cigna releasing a press release, and they have spoken about direct rebate-free PBMs and full rebates to patients being passed on to the patients at the time of drug dispensing, and also linking patient cost to lowest available amongst copay, DTC, and PBM negotiated prices. I just wanted to understand the implication of this change, and probably other PBMs would follow suit. What are the changes that you kind of anticipate from this change, and does this mean anything for volume growth and margins?

Thank you very much for two great questions. Look, Jubbonti, and whilst I’m clearly delighted with the performance we saw in the U.S., really running really well on to our expectations, maybe a little bit ahead. Europe, it’s really market by market. Europe for us, it’s nearly 40 markets. Each one works in a different way, whether it’s physician-led and a branded market or tender-driven. I think we’re well positioned to leverage this both in oncology. You’ve got to remember that we’re the largest oncology company in Europe, and I’m also excited in the long term to open offer this product for patients, particularly female patients for osteoporosis. This is an excellent drug, but I think was prohibitively expensive. Looking to open up that access over the coming years with this. I think it’s got quite a lot of long-term growth in it as well, particularly for the osteoporosis indications.

Your question about Cigna, it’s fascinating. I think somebody you’d have to ask direct to Cigna. When you dig into the details, it only affects about 2 million patients, so it’s a tiny proportion of patients. I think it’s a positive move. The more clarity that people see in terms of the level of rebating around the market, I think is a positive sign. Directionally positive in the short term, I think it’s immaterial, and certainly in terms of the number of patients being offered this, it’s tiny. I think it’s only about 2 million patients in total. It’s a very small step. I’m encouraged about the direction and I’m always being encouraged to see more transparency. I don’t think you’ll have any material change to our business certainly in the short to mid term. Again, what you are seeing is some nicer reforms starting to come through.

We talked about HSS, you’re starting to see price transparency. I think we’re being listened to with tariffs. I’m actually more optimistic about the mid to long term. I think we need to see more on patent reform and again those things are being discussed and it was never going to be one thing that fundamentally changes the U.S. market. It’s several bits. I’m encouraged that this administration does seem to be starting to address them. Our next question comes from Beatrice Fairbairn at Berenberg. Please unmute your line and ask your question. Hi, thank you for taking my questions. Just on your H1 2025 results presentation, I noticed that there was a target for about 180 new generics launches in FY 2025. I suppose, could you possibly elaborate on where you are tracking relative to that and kind of what your expectations are for the full year? Thank you.

Yeah, I guess. On track, I think I said in my presentation, I think we’ve launched about 115 of those. It nets out to about 280 absolute launches globally, and with the vast majority, we don’t break them out normally because it’s sort of relatively modest launches. I mean, there were a couple of standout ones in the U.S., particularly iron sucrose and ListX, which are having a nice impact and we’re very pleased. Again, I think it also, you know, we spent a lot of time talking about biologics. When you look at the forward landscape, just about half of the LOE landscape, about $200 billion, is technically small molecules already. It does include GLP-1s. There’s still a significant opportunity and so we would continue to want to deliver on that space as well as growing and expanding the biologics opportunity that we see. Thank you.

Our next question comes from Sophia Greff Bull Nielsen at JPMorgan. Please unmute your line and ask your question. Good morning. Thanks for taking my questions. Firstly, just how are you thinking about the contribution of additional biosimilar launches to the top line in Q4? Should we anticipate another sequential step up in local currency growth? If so, how are you thinking about the growth profile as we head into next year? And then just on denosumab in the U.S. You’ve mentioned you’re delighted with the initial launch. Could you give any more detail on how market share is developing there? What do you expect as we see additional new entrants? You mentioned an addressable patient population of around 10 million. How much of the volume opportunity do you see is coming from switches from the originator relative to growth expansion in the market from biosimilar entry?

Okay, I think it’s Remco. Do you want to take the first question? Yeah, I take. Thank you, Sophia.

Richard Saynor, Chief Executive Officer, Sandoz: Thank you, Sophia. Good morning. Overall, we expect Q4 to be in a similar place as Q3 if we look at the consensus, which is around 5% for the full year. The consensus sits around 7% for Q4; we did 6% in Q3. So that is something like that you have to take into account, correct, in line with our guidance. The second question, give to Richard.

Craig Marks, Head of Investor Relations, Sandoz: Yeah, thank you. So denosumab. I think, as I said, I’m very delighted with the launch and I think clearly launching with a Q code and launching first to market allowed us to work very closely with payers and providers and we’ve really seen a strong uptake actually, particularly perhaps a little more than we expected in the osteoporosis side of the equation, which actually stands well for the long term use of this product. I think we’re acquiring both new patients but also switching patients as well. Very, very pleased with the uptake. Also, let’s not forget we launched it in Canada and there we took a market share of 65% at launch. I think, you know, really strong execution, well accepted product and certainly also excited that we’re launching it in Europe.

I think some nice growth there that we can see as we expand the use, as I said earlier, particularly in osteoporosis. Thank you so much. Thank you. Our next question comes from Joris Zimmermann, Octavian. Please unmute your line and ask your question. Yeah, hi, this is Joris from Octavian in Switzerland. Thanks for taking my question. I have two related to the midterm and also the longer term opportunities in biosimilar. First, on the midterm you mentioned that you have five assets in regulatory review currently. Could you maybe give us a bit more detail about the timelines you see here and how that could shape the midterm biosimilars opportunity for Sandoz?

Then related to the HHS press release and the whole discussion ongoing about access for biosimilars in the U.S., is there specific indications or biologics that you currently haven’t looked at and that you would say are white spots in the Sandoz pipeline that you might take a look again now? Thanks. Thank you so much, Joris. I’ll answer your second question first and then I’ll come to you. I mean, yes, but I can’t really disclose it because I don’t want to make my life any harder than it already is with the competition. I think what Remco highlighted is there’s a lot of assets maybe in the $1 billion to $2 billion range that economically people deprioritized.

Given the, I guess the relatively newness of the biosimilar market, I’m super excited that we can really target those, particularly in immunology and oncology because we have a strong platform we can launch in that space. It’s highly accretive and in many ways I’d much rather have ten $1 billion products than one $10 billion asset. I think that’s our opportunity. Also, looking back, there’s something like 40 biologics that have come off patent that no one has yet ever developed to biosimilar. There is way more opportunity than there is financial firepower for any company to develop. I think we’re almost a kid in the candy store in terms of where do we want to go and how do we extract that. Super, super excited about the direction of travel in terms of short-term assets. I mean, clearly in the U.S.

we’re talking about Aflibercept a little bit further out in 2029, ocrelizumab, ocrolimumab, we’ve got pembrolizumab, nivolumab, and ipilimumab all sort of coming in the latter part of this decade. Clearly, on top of that, we’re constantly looking at potential BD and strategic partners. I would assume, don’t be too surprised if we then come back with other products that we would launch in that space as well. Also, you’ve got to remember that 2027, 2028 is quite a low period in terms of LOE. This isn’t necessarily a function of Sandoz; this is a function of the market that we don’t see many big LOEs coming in that period. Excited about our pipeline. Also, really excited as we look to expand and leverage that further. Thank you. Our next question comes from Natalia Webster with RBC. Please unmute your line by pressing Star6 and ask your question.

Richard Saynor, Chief Executive Officer, Sandoz: Natalia, if you’re there, we cannot hear you.

Craig Marks, Head of Investor Relations, Sandoz: Hi, can you hear me okay now? Yeah.

Richard Saynor, Chief Executive Officer, Sandoz: Yes, we can.

Craig Marks, Head of Investor Relations, Sandoz: Good morning. Perfect. Sorry about that. Thanks for taking my question. Firstly, just on the Just-Evotec partnership on slide 34, you lay out the biosimilars under development with them. Are you able to comment a bit more on what the improved yields and cost savings from the continuous manufacturing could mean for margins over the longer term? Appreciating some nearer term costs there. Secondly, on the Slovenia expansion, are you able to provide a bit more color on how that is going and also around the phasing of anticipated investment that you’ve announced there. Thank you. Perhaps if I take you to Slovenia. Remco. Yeah. I mean, look, we talked about, we were always excited about this as a technology. We’ve never been specific about the potential cost effectiveness. Certainly, we see a significant opportunity in terms of speed of development.

Using the J.POD as a manufacturing platform, clearly by bringing it in house, means that it also further improves the margins because the royalty mixture and everything else that’s associated with that and our ability to use and expand the technology for further assets without additional payments also makes it highly attractive as a platform. We also then have optionality both to leverage the facility in Toulouse, but if we so wish, put that technology into other locations around the world. I think it gives us a lot more flexibility. I’m super excited about the technology and hopefully we can give you an update in the not too distant future in terms of what our position is there. Slovenia.

Richard Saynor, Chief Executive Officer, Sandoz: Yes, Slovenia. Very exciting for us. As you know, overall we have three projects ongoing in Slovenia: one for development, one for the API, and one for the fill finish. All three are clearly on track versus the progress. Also, very happy with all the capabilities in Slovenia. As many of you know from the prior, say, owner of us, there’s a lot of activities in Slovenia. We have been able to get a very capable group of people in Slovenia to handle this activity. Everything is on track. We still expect as of 2028 to start with the production, fully up to speed. There are clearly also benefits, correct, because it will be fully integrated. Also, from cost, it will be state of the art.

Craig Marks, Head of Investor Relations, Sandoz: Correct.

Richard Saynor, Chief Executive Officer, Sandoz: Hopefully at a later point in time, as Richard said before, the Just-Evotec manufacturing abilities can be taken on board. We’re very, very excited, particularly then looking in the years 2030, 2035, with everything which comes then online that we can with our scale very cost efficiently produce the biosimilars going forward and in that sense have a very competitive pace. All on track and yeah, more to come in the coming years.

Craig Marks, Head of Investor Relations, Sandoz: Thank you. Our final question comes from Urban Fritsch at ZKB. Please unmute your line and ask your question. Yes, good morning, this is Urban Fritsch from ZKB. Three questions, please. First on HHS, we talked quite a bit about what you might expect, but still, I mean, you know what it takes to develop biosimilars. Would you expect that the existing players predominantly will expand their pipeline or would you also expect that quite a number of completely new players, specifically from Asia, would also enter the market? Second question, also a bit more on the market. We talked a bit about the growth, expansion of market, so the addressable penetration or the penetration for addressable population. Can you put some numbers behind that, maybe on historic experience, maybe for biosimilar Humira or Omnitrope, which has been growing for years now? That would be question number two.

Question number three, could you talk a bit about the pricing dynamics in the U.S. for generics and then also for biosimilars? Thanks a lot.

Richard Saynor, Chief Executive Officer, Sandoz: Thank you.

Craig Marks, Head of Investor Relations, Sandoz: Ervin, three great questions to finish on. I mean look, who knows what our competitors will do and in a sense that’s a question for them, not so much for us. We’re clear about we see this as a great opportunity. Again this is a world market, it’s not just the U.S. Take a step back. We see our pipeline very Eurocentric. Of course we want to launch and bring those products to the market. Clearly a feature of the U.S. generally. I think having a strong commercial footprint, as you can see from denosumab, is important. Traditionally, players tend to see this market as a more simplistic market and then they struggle to commercialize those assets in the rest of the world. I think we’re uniquely positioned both to perform extremely well in the U.S. and really leverage and grow our business and pipeline globally.

Super, super excited and I think the exciting thing is seeing the European regulators, Canadian, Australian regulators, all moving into a much more sensible space in terms of data expectations. That does present us a significant opportunity and I think then linked to your second question which is a nice follow up. I think the days of when we first launched biologics like Omnitrope, which was the first biosimilar, 20 odd years ago, I think the world has moved on. We’ve established ourselves as a credible high quality supplier. The concerns that physicians and payers have had are really evaporating and so really the point there is already on ustekinumab is pretty much in a similar penetration rate to adalimumab. Even though Ada has been on the market for six, seven years in Europe, you’re seeing a much faster adoption and a much greater exception.

Clearly what’s so cool about these drugs is Omnitrope is still one of our largest products, 20 years old and it’s still growing. Great performance of international. There aren’t many products in this generics industry where you can say that 20 years on you’re still getting leverage and growth. Similarly, adalimumab strong growth as we really offer patient treatments. At launch it was five years from diagnosis to treatment for RA, now it’s months. We’re transforming patients’ lives, opening up and really saving a significant healthcare system. I think that’s true to many of the products that we will bring to market over the coming years. The opportunity to democratize and access to these medicines is really, really exciting. We’ve not discussed price erosion, GX and biologics. Certainly we’ve seen, I guess, a more normalization of price erosion, roughly around about 3% this year.

We always assume 3% to 5% in our planning assumptions. I think as the market sort of stabilizes in terms of supply, I would expect that trend to broadly continue. I think our assumption as we go into next year is probably price erosion 3% to 5%. I think one of the potential headwinds as you think about your models for next year for the business, but nothing dramatic, certainly nothing remarkably one way or the other. I guess more of a return to normal in terms of pricing dynamics, and then actual specific pricing depends on the market, depends on the level of competition. Obviously on a drug like natalizumab we see very little price erosion because we’re a sole player in that market.

There are others, clearly, like adalimumab, we have to compete in a sense, economics 101, so really depends on the market and depends on the product. Thank you so much for your final question. With that, thank you so much for your interest and support in Sandoz. Really delighted to take you through our results and look forward to connecting with you over the coming weeks and months.

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