How Novartis’s Sandoz Business Performed in Q1

Sandoz, Novartis’s generics business

Sandoz, Novartis’s (NVS) generics business, is a market leader in differentiated generics—products that are difficult to develop and manufacture. Sandoz revenue grew 4% YoY (year-over-year) to ~$2.5 billion in the first quarter. The chart below shows Sandoz’s revenue since Q1 2017.

How Novartis’s Sandoz Business Performed in Q1

Product performance

Whereas Sandoz’s US sales fell in the first quarter, this decline was substantially offset by sales growth in Europe, Asia, Africa, Australasia, Canada, and Latin America.

At constant exchange rates, US sales fell 18% YoY to $708 million, mainly due to a 6% impact by price erosion partially offset by 2% volume growth. Meanwhile, European sales grew ~7% YoY to ~$1.3 billion, Asian, African, and Australasian sales fell ~4% to ~$323 million, and Latin American sales rose ~4% to ~$102 million.

Biopharmaceuticals

In the first quarter, biopharmaceutical revenue grew 13% YoY to $335 million, driven by European sales of Rixathon and Erelzi and partially offset by lower Glatopa 20mg[1.milligram] sales in US markets.

Retail generics

Retail generics revenue fell ~2% YoY to $2.0 billion, mainly driven by a 21% decrease in US sales at constant exchange rates.

Anti-infective franchise

At constant exchange rates, anti-infective franchise revenue fell 4% YoY to $370 million, mainly due to US pricing. The Vanguard FTSE Developed Markets ETF (VEA) invests 0.8% of its holdings in Novartis, 0.5% in GlaxoSmithKline (GSK), 0.4% in AstraZeneca (AZN), and 0.4% in Sanofi (SNY).