uploads/2018/03/Chart-005-3-1.jpg

How Novartis’s Sandoz Performed in 4Q17

By

Updated

Sandoz performance

Sandoz is one of the market leaders in differentiated generics, which includes products that are difficult to develop and manufacture. Sandoz reported flat revenues at ~$2.6 billion during 4Q17 as compared to 4Q16. This includes a decline of 4% in operating revenues, offset by a 4% positive impact of foreign exchange.

The above chart shows revenues for Sandoz since 1Q16.

Article continues below advertisement

Performance of Sandoz products

Sandoz reported a decline in US sales during 4Q17, substantially offset by growth in sales from the European markets and other international markets including Asia/Africa/Australasia, and Canada and Latin America. The decline in revenues was mainly due to an 8% impact of price erosion, partially offset by 4% growth in volume during 4Q17.

The US sales decreased by 17% to $796 million during 4Q17 as compared to $961 million during 4Q16. The decrease in the US sales was mainly due to pricing pressure and customer consolidation.

The sales from the European markets increased ~11% to ~$1.2 billion during 4Q17 as compared to ~$1.1 billion during 4Q16. The growth was driven by a 3% increase in operating revenues and an 8% positive impact of foreign exchange during 4Q17. The growth was driven by continued uptake of generic products in Germany, the UK, and France.

The sales from the Asia, Africa, and Australasia markets increased by ~4% to ~$377 million during 4Q17 as compared to $364 million during 4Q16. The growth was driven by a 4% increase in operating revenues and the marginal impact of foreign exchange. The growth was mainly driven by strong sales from China.

Sales from Canada and Latin America markets rose ~12% to ~$187 million during 4Q17 as compared to $167 million during 4Q16. The growth was driven by a 9% increase in operating revenues and a 3% positive impact of foreign exchange. The growth was mainly driven by strong sales from Brazil.

Article continues below advertisement

Biopharmaceuticals

The biopharmaceuticals portfolio reported revenues of $309 million during 4Q17, a 6% growth at constant exchange rates as compared to 4Q16 revenues.

Retail generics

Retail generics reported revenues of $2.1 billion during 4Q17, a ~1% decline in revenues at constant exchange rates as compared to 4Q16 revenues.

Anti-infective franchise

The anti-infective franchise reported revenues of $370 million, a 2% decline in revenues at constant exchange rates as compared to 4Q16. The VanEck Vectors Pharmaceutical ETF (PPH) holds 4.8% of its total investments in Novartis (NVS), 5.3% in Bristol-Myers Squibb (BMY), 5.0% in AstraZeneca ADR (AZN), and 5.0% in Mylan (MYL).

Advertisement

More From Market Realist