Sandoz’s shares have surged more than 200% since the Novartis spin-off, lifting the stock to a record this month amid investor optimism over its generics and biosimilars pipeline. The rally follows a collaboration with Shanghai Henlius Biotech and strong first-half revenue in the U.S. and biosimilars segment.
The company’s upcoming investor day on September 8 is anticipated to provide clarity on its mid-term targets and expansion plans for generic Semaglutid, the active ingredient in Novo Nordisk’s blockbuster diabetes and weight-loss drugs. Analysts at Jefferies describe the event as a potential catalyst for the stock, noting that Sandoz could demonstrate how it plans to unlock long-term earnings and value growth.
Sandoz’s push into generics for GLP-1 medications, including Semaglutid, comes as patents expire in key markets. The company secured approval in Brazil for its Semaglutid-based diabetes treatment Owozy, with launches planned in the second half of 2024. In Canada, regulatory clearance is pending, with a market launch targeted by the end of 2026. Analysts estimate these launches could add up to $200 million in generics revenue by 2027, with Brazil and Canada contributing roughly $150 million under conservative assumptions.
The competitive landscape remains challenging. In Brazil, Sandoz faces rivals including EMS and Sun Pharmaceutical Industries, while Apotex Health launched the first generic Semaglutid in Canada in May. Dr. Reddy’s Laboratories paused production of its Ozempic generic until at least October due to unspecified impurities in a key ingredient. Goldman Sachs and Jefferies analysts have not yet factored GLP-1 generics into their forecasts, citing limited visibility, which analysts suggest could unlock additional upside potential.
Sandoz currently trades at about 21 times expected earnings, a premium of more than 30% to the Stoxx 600 Health Care sector. Berenberg analyst Beatrice Fairbairn notes that near-term potential and the current product mix appear priced in, but sees growing upside from GLP-1 launches beginning in 2027. She cautions, however, that market development remains uncertain.
