Novartis AG's NVS generics unit Sandoz tells investors it can add $3 billion in annual sales over the next five years from launching new products after it spins out of its parent company later this year.
Sandoz says the biosimilar pipeline has trebled in size over recent years, with 24 products, on top of a core generic pipeline of more than 400 products.
Sandoz reported sales of $9.1 billion in 2022, with a record of six consecutive quarters of single-digit growth.
Net sales are expected to grow in the mid-single digits through 2028, with free cash flow set to more than double its current level of $800 million over the same period.
The $3 billion in additional sales will come increasingly from biosimilars and complex generics.
Novartis confirmed it expected Sandoz to generate mid-single-digit net sales growth this year and anticipated that the growth rate would remain in this range between 2024 - 2028.
The division's core margin on earnings before interest, taxes, depreciation, and amortization is expected to be 18% - 19% in 2023, down from 21.2% last year, reflecting global inflationary pressures and the investments required to implement the spinoff.
The core EBITDA margin range should climb to 24% - 26% in the mid-term.
Citing Novartis chief Vas Narasimhan, Reuters reported the market for generics as "highly attractive" as $400 billion - $500 billion worth of branded products is expected to go off-patent over the coming decade.
Price Action: NVS shares are up by 1.17% at $99.65 premarket on the last check Thursday.
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