Sandoz Projects $3 Billion in Additional Sales Over Next Five Years Amid Planned Spin-off from Novartis

Intelligent Finance APP learned that Sandoz, the generic drug division of Novartis (NVS.US) which is preparing to spin off in the second half of this year, expects that its new products may generate an additional $3 billion in sales over the next five years.

Sandoz said in a statement on Thursday that net sales could grow at a single-digit rate by 2028, adding that free cash flow is expected to more than double from last year's $800 million. Such results could make the full-year dividend account for up to 30% of this year's core net profit, the division said, adding that it plans to increase this ratio to 40% in the medium term.

It is understood that Novartis is planning to spin off Sandoz to focus on more profitable innovative drugs. The generics division will concentrate on biosimilars to increase profits. Sandoz had sales of $9.1 billion last year and currently has more than 20 such products in development.

The division forecast EBITDA margins, excluding some costs, of 24%-26% by 2028, up from 18%-19% this year. But Sandoz added that the forecast was lower than last year's level due to inflationary factors and costs related to becoming a standalone company.