At some point, it's time to call it a day and take the profits. Besides, I wanted to reduce my tech share anyway.

Profit flows into $7974 (-0.57%) and pharma top-ups $SDZ (+4.07%) & $SFZN. (+5.49%)

Sandoz Group AG has presented its strategy for the next ten years, which aims to further position the company as a leading provider of affordable medicines.

affordable pharmaceuticals. The plan is to drive growth in the core generics business through targeted product launches, particularly in the area of oral dosage forms and injectables,

and injectables.

In addition, the presence in the biosimilars market is to be further expanded with an extended portfolio and a strong pipeline.

A particular focus is on exploiting the market opportunities arising from the imminent expiry of patents for drugs worth over USD 600 billion worldwide.

Sandoz is pursuing the goal of increasing patient access to

access to affordable medicines over the next ten years and plans to focus on emerging segments such as the GLP-1 market.

GLP-1 market.

Sandoz Group Q3 2024 $SDZ (+4.07%)

Financial performance

Net sales: In the third quarter of 2024, Sandoz generated net sales of USD 2.6 billion, an increase of 12% in constant currencies compared to the third quarter of 2023. For the first nine months of 2024, net sales increased by 9% to USD 7.6 billion.

Growth in biosimilars: Strong growth of 37% in constant currencies for the third quarter of 2024, driven by the existing portfolio and recent product launches.

Generics growth: Generics sales increased by 4% in constant currencies in the third quarter of 2024.

Earnings situation

Core EBITDA margin: The forecast for the core EBITDA margin in the 2024 financial year is around 20%.

Key figures and profitability ratios

Net debt/core EBITDA ratio: This ratio is expected to remain below 2.0x in the medium term.

Segment information

• Europe: Net sales for Q3 2024 amounted to USD 1.4 billion, an increase of 12% in constant currencies.
• North America: Net sales of USD 598 million in Q3 2024, an increase of 18% in constant currencies.
• International: Net sales of USD 635 million in the third quarter of 2024, an increase of 8% in constant currencies.

Competitive position

Sandoz is the global leader in generics and biosimilars with a strong portfolio and strategic product launches in key regions.

Forecasts and management commentary

Sales forecast: Growth in the high single-digit range in constant currencies is expected for the 2024 financial year.

Product launches: Upcoming launches include Pyzchiva® in the US in the first quarter of 2025 and Wyost®/Jubbonti® in the second quarter of 2025.

Risks and opportunities

Opportunities: A strong biosimilar portfolio and recent approvals, such as for Pyzchiva® and Enzeevu™, create solid growth opportunities for Sandoz.

Risks: Price erosion and potential legal risks associated with new product launches.

Summary

Sandoz shows a strong financial performance with significant growth in biosimilars and generics. The company is strategically well positioned to achieve further growth with a solid pipeline offering and upcoming product launches. Management remains focused on executing the strategy and achieving the financial targets for 2024. Challenges such as price erosion and potential legal risks related to new products remain. Overall, Sandoz is well positioned to maintain its leadership position in the generics and biosimilars market.

Positive aspects

Strong growth in biosimilars: Sandoz recorded an impressive 37% growth in biosimilars in Q3 2024, supported by both established products and recently launched new products, underlining its leading position in this segment.

Increased sales guidance: Sandoz has raised its full-year 2024 sales guidance to high single-digit growth in constant currencies, reflecting strong demand in biosimilars and generics.

Successful product launches: Key milestones include the launch of Pyzchiva® in Europe and the FDA approval of Enzeevu™, strategically strengthening Sandoz's portfolio in essential therapeutic areas.

Confirmation of EBITDA margin: The confirmed EBITDA margin target of around 20% for FY 2024 illustrates Sandoz' operational efficiency and effective cost management.

Geographic expansion: Strong sales growth in all regions, particularly double-digit growth in Europe and North America, demonstrates the successful implementation of strategic launches and an increasing market presence.

Negative aspects

Price erosion: Despite strong volume growth, price erosion impacted net sales by 1 percentage point in the third quarter and 2 percentage points in the first nine months of 2024, which could dampen sales growth.

Decline in generics sales in North America: The generics segment in North America saw a decline due to the timing of new product launches, which could weigh on overall growth in this important market.

Potential legal risks: Future revenues could be jeopardized by potential litigation surrounding new products such as Enzeevu™, which could delay launches and impact growth projections.

Impact of divestments: The divestment of the Chinese business in the second quarter weakened growth in the international segment, indicating potential difficulties with market stability in certain regions.

Debt management: Although Sandoz maintains a net debt to core EBITDA ratio below 2.0x, active management of the debt portfolio to maintain an investment grade rating indicates continued debt risks.

$SDZ (+4.07%) - Approval for Enzeevu

The generics manufacturer has received approval in the USA for the biosimilar Enzeevu. Enzeevu is an active ingredient for the treatment of neovascular age-related macular degeneration, which Sandoz hopes will lead to growth in the important US market. The copycat drug Enzeevu is based on the blockbuster Eylea from Regeneron.

GG

$SDZ (+4.07%) - Convincing quarterly figures from Sandoz

The generics manufacturer generated sales of $2.6 billion in the second quarter of 2024, which corresponds to an increase of 9% in constant currencies. In the first half of 2024, sales rose by 7% to $5.0 billion. The biosimilar business in particular grew by 29%. Based on the positive business performance, Sandoz has raised its full-year sales growth guidance to a mid to high single-digit range in constant currencies.

Own position:

38 shares at 27.60

Happy Investing

GG