Sandoz (SDZ) Morgan Stanley Healthcare Conference summary

Strategic and operational highlights

• Achieved 12 consecutive quarters of growth, with 7% growth in H1 and strong momentum in biosimilars, especially in the US and ex-US markets.

• Multi-year private label deal with Cordavis (CVS) led to 19% US biosimilar Humira access, with 80% of that share held, and further growth expected as more PBMs displace branded Humira in 2025.

• Ex-US biosimilar Humira growth remains robust, with expanding patient pools and steady momentum in Europe and international markets.

• Biosimilar Stelara launched in Europe with strong reception; US launch planned for Q1 2025, with commercial strategies under consideration.

• Not aiming for generic market leadership in the US, but targeting sustainability with 70 new product launches expected by 2028 to offset erosion.

Financial performance and margin outlook

• H1 EBITDA margin at 17.5%, with a target of 22.5% in H2 to meet annual guidance, driven by biosimilar mix, higher sales, and transformation cost savings.

• $50 million in cost savings expected in H2, with restructuring across all functions except direct sales force; annual run-rate savings of CHF 200 million targeted by 2026.

• CapEx plans of $2.3 billion plus additional hundreds of millions for GLP-1 opportunities, with flexibility to adjust based on growth and biosimilar uptake.

Market and product development

• GLP-1 market entry planned in phases: Canada and emerging markets from 2026, regulated markets from 2032, with investments focused on fill-finish and injector capacity.

• Supply strategy includes long-term Novartis agreement, new Slovenia plant (operational by 2028), CDMO partnerships, and potential J.POD technology adoption for capacity and cost advantages.

• M&A and business development focused on selective, small-scale deals, with 1% inorganic growth per year as a supplement to internal transformation.