The Sandoz model is now based on two distinct drivers: on the one hand, the strong commercial traction of its biosimilars (28% of revenues) and, on the other, its ability to revalue its generics (the remaining 72%), despite declining volumes.
Generic drugs and biosimilars both aim to replace a drug that has fallen into the public domain. However, they are not subject to the same rules or market dynamics. Generic drugs are identical copies of small chemical molecules (ibuprofen, paracetamol, etc.). Their production is standardized, their price is controllable, and they can be substituted automatically. Biosimilars, on the other hand, are "near-copies" of complex biological drugs (such as therapeutic antibodies) made from living cells. They are more expensive to develop and take longer to approve.
Sandoz is a heavyweight in both categories, but its growth strategy is focused primarily on biosimilars. In this respect, the latest data from IQVIA, the global leader in pharmaceutical prescription data, released in April shows encouraging momentum, with Hyrimoz, a biosimilar of Humira, now accounting for 28.1% of US prescriptions in its category. This treatment is intended for chronic autoimmune inflammatory diseases. One concern, however, is that the Cordavis contract, which accounted for around two-thirds of Hyrimoz volumes, is due to expire and is expected to be renegotiated by 2026. Management insists that volumes will remain stable, but analysts anticipate price pressure when the contract is renewed as competition intensifies in this segment.
On the generics side, IQVIA data also reveal an interesting trend: despite a 6.2% year-on-year decline in volume in April, gross sales rose by 11.1%, reflecting an 18.4% price increase. Over a rolling three-month period, the increase was as high as 20.7%. Sandoz is therefore currently managing to offset the structural erosion in volumes through favorable price adjustments.
The commercial situation is not the only point of friction. The US threat of tariffs—particularly on certain imports from China—has raised eyebrows amongst analysts. Sandoz has estimated its current exposure at $10m–$15m through its Chinese partners and has mentioned a potential impact of $60m–$65m if broad taxation were to be applied. This would represent 3% of 2025 EBITDA, an absorbable but not insignificant amount.
Fortunately, the group manufactures mainly in Europe and has already incorporated recent regulatory adjustments (particularly on clinical requirements for biosimilars) that will generate savings.
Analysts remain optimistic about the stock, which is back to its record levels of last February. The three-year targets offer comfortable visibility. The company is valued at 18x next year's earnings. This level remains entirely acceptable given the expected growth and Sandoz's position relative to its competitors.
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