Sandoz beats estimates, guides for accelerated growth

Sandoz Group AG, the Swiss pharmaceutical company, reported full-year 2025 results that met analyst expectations and issued fiscal 2026 guidance slightly above consensus on Wednesday, February 25, 2026, demonstrating confidence in its biosimilar portfolio despite ongoing pricing pressures in its generics business. The company posted full-year revenue of $11.09 billion, representing a 5% increase at constant currency and matching analyst consensus, with a 7% improvement from the $10.36 billion reported in fiscal 2024. This growth was primarily driven by their biosimilars segment, which expanded by 13% at constant currency to reach $3.29 billion, while generics revenue increased by 2% to $7.79 billion despite facing pricing headwinds from Chinese penicillin API imports during the second half of the fiscal year. For fiscal 2026, Sandoz projected mid-to-high single-digit revenue growth at constant currency and core EBITDA margin expansion of approximately 100 basis points, with the revenue guidance midpoint of roughly 7% exceeding the 6.8% analyst consensus. CEO Richard Saynor highlighted the company's progress, mentioning their "industry-leading pipeline," record number of launches, and significant investments in securing biosimilars leadership. Financial metrics showed core EBITDA reaching $2.41 billion with a margin of 21.7%, up 160 basis points from the previous year, driven by favorable sales mix and operational efficiencies. Core diluted earnings per share jumped 33% at constant currency to $3.64, and management free cash flow increased 39% to $1.55 billion, reflecting improved profitability. The company's biosimilar launches included notable products such as Pyzchiva in the US, Wyost and Jubbonti as the first FDA-approved interchangeable denosumab biosimilars, and Tyruko as the first multiple sclerosis biosimilar in the US. However, Sandoz acknowledged challenges, including a decline in Pyzchiva market share to 34% in the third quarter from 36% in the second quarter, despite overall biosimilar penetration reaching 50%. The generics business continued to face pressure from US tariffs on Chinese penicillin APIs, causing global price declines that Sandoz expects to persist through the first half of 2026. The company also clarified it does not anticipate a material contribution from any potential generic semaglutide launch in 2026 and proposed an increased dividend of CHF 0.80 per share, up from CHF 0.60, representing 27% of core net income and subject to shareholder approval on April 9, 2026.