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Novartis’s Sandoz in Q2 2018

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Sandoz, the generics arm

Sandoz is Novartis’s (NVS) generics business and is a market leader in differentiated generics. Sandoz reported nearly flat revenues at ~$2.46 billion in Q2 2018 compared to $2.45 billion in the second quarter of 2017. Revenue growth was driven by a 2% favorable impact of foreign exchange, offset by a 2% decline in operating revenues.

The above chart compares the quarterly revenues for Sandoz since the first quarter of 2017.

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Biopharmaceuticals

The biopharmaceuticals portfolio reported a 34% growth in operating revenues to $363 million in Q2 2018 compared to the second quarter of 2017. Growth was driven by strong sales in the US and European markets following the increased demand for Erelzi and Rixathon in the European market and Omnitrope and Zarxio in the US market.

Retail generics

Retail generics reported an 8% decline in operating revenues to $2 billion in Q2 2018 compared to the second quarter of 2017. US sales decreased ~22% at constant exchange rates during the quarter.

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Anti-infective franchise

The anti-infective franchise reported a 9% growth in operating revenues to $332 million compared to the second quarter of 2017.

Geographical performance

Due to the competition, US markets reported a 16% decline in operating revenues to $692 million during the quarter.

The continued uptake of retail products and biosimilars drove growth in the European market, which reported a 7% growth in operating revenues to $1.2 billion during the quarter.

The Asia, Africa, and Australasia market and the Latin America market both reported a 2% decline in operating revenues to $341 million and ~$98 million, respectively, during the quarter.

The Invesco BLDRS Europe Select ADR ETF (ADRU) holds 6.3% of its total investments in Novartis ADR (NVS), 3% in GlaxoSmithKline ADR (GSK), 2.9% in AstraZeneca ADR (AZN), and 2.6% in Novo Nordisk ADR (NVO).

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