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What’s Expected of Novartis’s Sandoz Segment in 4Q17?

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Sandoz, the generics segment

Sandoz, Novartis’s (NVS) generics arm, includes pharmaceuticals and biotechnological active substances in its portfolio. Sandoz is expected to report growth in operating revenues for 4Q17.

The above chart compares Sandoz’s revenues and NVS’s total revenues during the past few quarters.

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Sandoz’s performance

Sandoz’s positive revenue growth in 4Q17 is expected to be driven by strong sales in European markets and the rest of the world (excluding the US), partially offset by lower sales in US markets. This growth is expected to be driven by an increased demand for biosimilar products for Zarxio and other biopharmaceutical products.

Biopharmaceuticals

The global sales of biopharmaceuticals including biosimilars, Glatopa, and contract manufacturing revenues are expected to report growth for 4Q17, following the strong demand of Glatopa and Zarxio and the launch of new biosimilars Rixathon and Erelzi in European markets in 2017.

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Anti-infective franchise

The anti-infective franchise is expected to report growth in revenues for 4Q17, driven by the increased sales of anti-infective products but partially impacted by the discontinuation of the low-margin products.

Retail generics

Retail generics are expected to report nearly flat revenues for 4Q17, as the fall in revenues from US markets will be substantially offset by increased sales from outside of US markets, including European markets and the rest of the world.

Notably, the Vanguard FTSE Europe ETF (VGK) has 11.8% of its total investments in healthcare companies. VGK has 1.9% in Novartis AG (NVS), 0.9% in Sanofi (SNY), 0.8% in Novo Nordisk (NVO), and 0.8% in AstraZeneca (AZN).

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