uploads///Chart

Novartis’s 4Q17 Earnings: Sandoz Business

By

Feb. 5 2018, Updated 7:34 a.m. ET

Sandoz

Sandoz, Novartis’s (NVS) Generics business, is one of the market leaders in differentiated generics such as products that are difficult to develop and manufacture. Sandoz reported flat revenues at ~$2.6 billion in 4Q17 compared to 4Q16.

Sandoz reported a decline of 4.0% in operating revenues, offset by a 4.0% positive impact of foreign exchange. The chart below shows Sandoz’s revenues since 1Q16.

Article continues below advertisement

Performance of Sandoz’s products

Sandoz reported a decline in its US sales in 4Q17. This decline was substantially offset by growth in sales from the European markets, as well as Asia, Africa, and Australasia, as well as Canada and Latin America. The decline in revenues was mostly due to the 8.0% impact of price erosion, partially offset by 4.0% growth in volume in 4Q17.

Its US sales decreased 17.0% to $796.0 million in 4Q17, compared to $961.0 million in 4Q16. The sales from the European markets increased ~11.0% to ~$1.2 billion in 4Q17 compared to ~$1.1 billion in 4Q16.

The sales from the Asia, Africa, and Australasia markets increased ~4.0% to ~$377.0 million in 4Q17 compared to $364.0 million in 4Q16. The sales from Canada and Latin America increased ~12.0% to ~$187.0 million in 4Q17 compared to $167.0 million in 4Q16.

Biopharmaceuticals

Sandoz’s biopharmaceuticals portfolio reported revenues of $309.0 million in 4Q17 for 6.0% growth at constant exchange rates compared to its 4Q16 revenues. This growth was driven by an increase in sales from European markets following new product launches. This increase also resulted from the growth of Zarxio in the US markets, and it was partially offset by lower sales of Glatopa 20 mg in the US markets.

Article continues below advertisement

Retail generics

Sandoz’s retail generics portfolio reported revenues of $2.1 billion in 4Q17, an ~1.0% decline in revenues at constant exchange rates compared to its 4Q16 revenues. These revenues were driven by a 19.0% decrease in operating revenues from the US market, and they were partially offset by growth in operating revenues from the international markets.

Anti-infective franchise

Sandoz’s anti-infective franchise reported revenues of $370.0 million, a 2.0% decline in revenues at constant exchange rates compared to 4Q16.

The PowerShares International Dividend Achievers ETF (PID) holds 10.1% of its total investments in healthcare companies. PID holds 1.4% in Novartis AG (NVS), 1.5% in Sanofi (SNY), 1.0% in Novo Nordisk (NVO), and 4.7% in Teva Pharmaceuticals (TEVA).

Advertisement

More From Market Realist