Sandoz hitches its wagon to biosimilars, predicting $3B in sales from pipeline products over next 5 years

Novartis’ generics and biosimilars unit Sandoz—soon to be spun off as a standalone company—has seen a decline in revenue every year since 2016.

But the slide could end soon as the company projects sales of its pipeline products to add $3 billion to the top line over the next five years, thanks largely to its emphasis on biosimilars.

Novartis presented its projection on Thursday, the first of two Capital Markets Days for investors in New York City.

Sandoz said that the sales decline will end this year, predicting mid-single digit net sales growth, which will continue through 2028. The company also said cash flow will double over the period from its $800 million figure last year.

The key to growth will be investing in high-value biosimilars as the company now has 24 such products in its pipeline, which is “industry-leading,” said Sandoz CEO Richard Saynor during Thursday’s investor presentation.

“In the last four years, we’ve nearly tripled the number of biosimilars in partnership and development,” Saynor said. “More than 50% of the launch contribution going forward will come from biosimilars, driving the mix and driving the growth.”

The Swiss company is prepared to launch four biosimilars in the U.S., including a copycat of AbbVie’s mega-blockbuster Humira on July 1. Others in the works include knockoffs of Biogen’s Tysabri and Regeneron and Bayer’s Eylea.

Sandoz projects the market for biosimilars and generics to double over the next nine years, owing to the aging of the population and significant products—such as Humira and Merck’s Keytruda—losing exclusivity over the period.

“I see strong growth drivers in terms of accessing that opportunity,” Saynor said. “And the biosimilar element will be the fastest growing with relatively lower levels of competitive intensity.”

Sandoz strength in both generics—where it has more than 400 products—and biosimilars puts it in an advantageous position compared to others in the industry, Saynor added.

“We have the cash generation and the scale that the small molecules bring, with the long-term cash and margin-expansion opportunities that biologics have,” Saynor said. “There are strong synergies by having the two in terms of development and also in terms of our commercial capabilities.”