Sandoz shares jumped after the Swiss pharmaceutical group reported accelerating biosimilar sales, improving profitability and stronger-than-expected quarterly revenue. A historic wave of patent expirations offers substantial growth potential—but competition, regulation and persistent generic-drug price erosion remain important risks.
August 5, 2026
Sandoz shares gained approximately 6% in Zurich on Wednesday, having risen as much as 7% earlier in the session, after the company reported strong second-quarter growth led by its expanding biosimilar portfolio.
Quarterly net sales reached $3.01 billion, slightly ahead of the $2.99 billion expected by analysts. Revenue increased 9% on a reported basis and 7% at constant currencies.
The most important figure was the 22% constant-currency increase in biosimilar sales, an acceleration from 18% in the first quarter. Biosimilars now account for one-third of Sandoz’s revenue, helping transform a business historically associated with slower-growing generic medicines.
Sandoz’s results at a glance
| Metric | Result |
|---|---|
| Q2 net sales | $3.01 billion |
| Reported Q2 sales growth | 9% |
| Q2 growth at constant currencies | 7% |
| Biosimilar growth at constant currencies | 22% |
| Generic-drug growth | 1% |
| H1 net sales | $5.76 billion |
| H1 core EBITDA | $1.21 billion |
| H1 core EBITDA margin | 20.9% |
| Biosimilars as a share of sales | 33% |
| Share-price reaction | Approximately +6% |
The distinction between reported and underlying growth is important. The 9% headline increase benefited partly from currency movements, while the 7% constant-currency figure provides a clearer indication of the company’s operating performance.
Biosimilars become the central growth engine
Biosimilars are highly similar versions of complex biological medicines whose patents and exclusivity periods have expired. Unlike conventional generics, they are produced using living cells and require more demanding clinical, manufacturing and regulatory processes.
That complexity creates higher barriers to entry—and generally better economics—than the traditional generic-drug market.
Sandoz’s biosimilar sales increased 22% at constant currencies during the second quarter, following an 18% increase in the first three months of the year. Their share of first-half revenue rose to a record 33%, compared with 29% a year earlier.
North America delivered the strongest performance. First-half biosimilar sales in the region advanced 47% at constant currencies, supported by the launches of:
- Wyost, a biosimilar version of Amgen’s Xgeva;
- Jubbonti, a biosimilar version of Amgen’s Prolia;
- and other recently introduced products targeting oncology, immunology and bone diseases.
The launch of Wyost and Jubbonti is particularly significant because the reference medicines generate several billion dollars in annual sales. Amgen reported a sharp decline in Prolia revenue during the quarter as biosimilar competition intensified—evidence that Sandoz and its peers are already capturing market share.
Sandoz’s first-half results detail the acceleration across its biosimilar franchise.
Why patent expirations create a “golden decade”
Sandoz estimates that medicines generating approximately $650 billion in annual sales will lose patent protection or market exclusivity over the coming decade.
CEO Richard Saynor described the opportunity as a “golden decade” for the biosimilar and generic-drug industry.
The upcoming patent-expiration cycle includes major biological treatments in oncology, immunology, ophthalmology, diabetes and obesity. As exclusivity ends, Sandoz can introduce lower-cost alternatives and compete for a portion of the original product’s revenue.
The opportunity is structurally larger than previous patent cycles for two reasons.
First, biological medicines have become a much greater part of global pharmaceutical spending. Many of the industry’s best-selling products are now monoclonal antibodies, hormones or other complex biological therapies.
Second, governments and healthcare systems need to control rapidly rising pharmaceutical costs. Biosimilars can generate substantial savings while increasing patient access, giving regulators and insurers a strong incentive to encourage adoption.
Sandoz currently has approximately 36 biosimilar assets in its development portfolio. That scale allows it to spread research and manufacturing costs across multiple candidates while reducing dependence on the success of any one product.
The obesity-drug opportunity
One of the largest future opportunities involves GLP-1 treatments for diabetes and obesity.
Sandoz recently received its first Brazilian approval for a multi-dose semaglutide pen. Semaglutide is the active ingredient in Novo Nordisk’s Ozempic and Wegovy.
In the United States, the Food and Drug Administration has agreed to review two generic tirzepatide applications submitted by Sandoz. Tirzepatide is the active ingredient used in Eli Lilly’s Mounjaro and Zepbound.
These applications do not mean that Sandoz can immediately compete with Lilly in the United States. Patent protection, regulatory exclusivity and litigation could delay commercial launches for years. However, they demonstrate the company’s intention to build an early position in what could become one of the largest generic-drug markets in history.
Sandoz does not expect semaglutide products to make a material contribution to its 2026 revenue. Their importance is strategic rather than immediate: the company is preparing for a post-exclusivity GLP-1 market that could eventually involve tens of millions of patients.
According to Reuters, management sees the diabetes and obesity category as one of the most important opportunities emerging from the new patent cycle.
Traditional generics return to growth
Sandoz’s generic-drug division returned to modest growth during the second quarter, with sales increasing 1% at constant currencies.
That figure appears unremarkable compared with the 22% biosimilar increase, but it represents an improvement after generics contracted during the first quarter.
Traditional generics still generate approximately two-thirds of group revenue. Their performance therefore remains important to Sandoz’s overall financial results, cash generation and manufacturing utilization.
The market is highly competitive. Once a conventional medicine loses patent protection, several manufacturers can launch equivalent products at approximately the same time. Prices often fall rapidly as pharmacies, distributors and public-health systems award contracts to the lowest-cost supplier.
Sandoz now expects overall pricing to decline by a mid-single-digit percentage in 2026, compared with its previous expectation for a low-to-mid-single-digit decrease. Management attributed the revision partly to short-term market conditions in Germany and strong North American biosimilar launches.
Volume growth, new products and a more favorable sales mix must compensate for that continuing price erosion.
Margins improve as the product mix changes
First-half core EBITDA increased 15% to approximately $1.21 billion. The core EBITDA margin expanded to 20.9%, from 20.0% in the comparable period.
The improvement reflects:
- faster growth from higher-value biosimilars;
- increased manufacturing scale;
- productivity measures;
- disciplined operating expenses;
- and the gradual completion of Sandoz’s separation from former parent Novartis.
Biosimilars generally offer better margins than commoditized generics because they are more difficult to develop and manufacture. Fewer competitors may enter each market, and commercial relationships with doctors, hospitals and insurers are more important than for conventional tablets.
A higher biosimilar contribution should therefore support both revenue growth and profitability.
There are still short-term costs. Sandoz must invest in clinical trials, specialized biological manufacturing and new product launches before those products generate meaningful revenue. The company is also building independent systems and infrastructure following its 2023 separation from Novartis.
The margin trajectory suggests that these investments are being absorbed without preventing underlying profitability from improving.
Full-year guidance confirmed
Sandoz maintained its 2026 guidance rather than raising it.
Management continues to expect:
| 2026 outlook | Guidance |
|---|---|
| Net-sales growth at constant currencies | Mid-to-high single-digit percentage |
| Core EBITDA margin | Expansion of approximately 100 basis points |
| Expected price erosion | Mid-single-digit percentage |
The decision to confirm rather than upgrade guidance appears prudent. First-half results support the annual targets, but stronger comparisons, launch expenses and generic-drug pricing pressure could affect performance during the remainder of the year.
The guidance also excludes the potential impact of new U.S. pharmaceutical tariffs.
Maintaining the forecast was sufficient to reassure investors because the most important element of the report was not a short-term upgrade. It was evidence that biosimilar growth accelerated for a second consecutive quarter.
Regulatory risk remains substantial
Biosimilars face a more complicated regulatory environment than conventional generic drugs.
A generic tablet normally needs to demonstrate that it delivers the same active ingredient into the bloodstream at an equivalent rate. A biosimilar must establish that its biological characteristics, efficacy, safety and immune response are sufficiently similar to the reference medicine.
This creates several risks:
Approval delays
Regulators may request additional analytical, manufacturing or clinical data. Delays increase development costs and can allow competitors to reach the market first.
Patent litigation
Even after the primary compound patent expires, originator companies may hold secondary patents covering manufacturing processes, formulations, devices or treatment methods. Resolving these disputes can delay product launches.
Interchangeability rules
Regulations governing whether pharmacists can automatically substitute a biosimilar vary between countries and U.S. states. Restrictive substitution policies can slow adoption.
Pricing and reimbursement
Public tenders can create rapid price reductions when several biosimilars launch simultaneously. Winning market share at an uneconomic price would increase revenue but weaken profitability.
Manufacturing requirements
Biological production is complex. Quality problems at a manufacturing site can interrupt supply, trigger regulatory action or delay approval across several markets.
Regulatory simplification could reduce some development costs. However, faster approval processes would also lower barriers for competing biosimilar manufacturers.
U.S. tariffs and political risk
Sandoz is discussing pharmaceutical policy and potential manufacturing investment with the U.S. government following proposals for new tariffs on imported generic medicines.
The company does not currently have a significant manufacturing presence in the United States. Producing more medicines domestically could reduce tariff exposure, but building new facilities would require substantial capital and a sufficiently attractive return.
CEO Richard Saynor has argued that tariffs on low-margin generics would ultimately affect patients and healthcare systems because manufacturers have limited ability to absorb additional costs.
This risk is particularly relevant for essential medicines. Generic-drug margins can already be thin, and further cost pressure may cause suppliers to withdraw products, increasing the possibility of shortages.
The full-year guidance does not incorporate the potential effect of new tariffs, leaving investors with an important source of uncertainty.
Legal provisions weigh on reported profit
Despite the improving operating performance, first-half net income declined to $109 million from $377 million a year earlier.
The decrease primarily reflected increased legal provisions. Sandoz recently agreed to pay up to $450 million to settle claims brought by 43 U.S. states and territories concerning alleged anti-competitive conduct in the generic-drug market.
Payments are expected to be spread over several years, beginning in 2027, and the company did not admit wrongdoing. Sandoz said the settlement would not affect its 2026 guidance or medium-term targets.
The case illustrates another risk of the generic-drug industry: intense pricing competition can coexist with significant regulatory scrutiny over how manufacturers communicate and set prices.
Competition remains intense
Sandoz competes with a broad group of generic and biosimilar manufacturers, including:
- Teva Pharmaceutical Industries;
- Viatris and Biocon Biologics;
- Amgen;
- Celltrion;
- Samsung Bioepis;
- Fresenius Kabi;
- Organon;
- and numerous lower-cost manufacturers in India and China.
The competitive landscape differs by product.
In conventional generics, price and supply reliability are often the decisive factors. Scale is essential because margins are low and customers can switch suppliers rapidly.
In biosimilars, development capabilities, regulatory execution, manufacturing quality and relationships with healthcare providers become more important. These characteristics favor established companies such as Sandoz, but they do not eliminate price competition.
A successful biosimilar can attract several rivals shortly after launch. The value of a patent expiration therefore depends not only on the original medicine’s sales but also on how many competitors enter and how quickly prices fall.
Valuation reflects higher growth expectations
Sandoz shares closed around CHF 68.14 after the earnings-driven gain, giving the company a market capitalization of approximately CHF 29.5 billion.
The stock has gained about 47% over the past year as investors have increasingly valued Sandoz as a biosimilar growth company rather than a conventional generic-drug manufacturer.
Approximate valuation metrics include:
| Valuation metric | Level |
|---|---|
| Trailing P/E | 41 times |
| Forward P/E | Approximately 20 times |
| Price-to-sales | 3.3 times |
| Price-to-free-cash-flow | Approximately 34 times |
| Dividend yield | Approximately 1.2% |
The substantial difference between the trailing and forward earnings multiples reflects expectations for higher profits and the normalization of exceptional expenses.
Sandoz no longer appears inexpensive compared with other generic-drug manufacturers. Its premium depends on biosimilar sales continuing to grow at double-digit rates and on margins expanding as forecast.
S&P Global Market Intelligence data compiled by StockAnalysis show that analysts now expect materially stronger earnings than those recorded over the previous 12 months.
What investors should watch next
The principal indicators for the coming quarters are:
- whether biosimilar growth remains above 20%;
- commercial momentum for Wyost and Jubbonti;
- the timing of additional biosimilar launches;
- the effect of generic-drug price erosion;
- progress toward the full-year margin target;
- U.S. tariff negotiations and potential manufacturing investments;
- regulatory developments involving generic GLP-1 products;
- and competition surrounding the largest upcoming patent expirations.
Sandoz will provide an update on its medium-term strategy at its Capital Markets Day in September.
The bottom line
Sandoz’s second-quarter results support the company’s transformation from a mature generic-drug manufacturer into a more attractive biosimilar growth business.
Reported sales increased 9%, biosimilar revenue advanced 22% at constant currencies and the first-half core EBITDA margin improved to 20.9%. The company is also positioned to benefit from an unprecedented $650 billion wave of patent expirations over the coming decade.
The opportunity is substantial, but it is not risk-free. Biosimilar development requires significant investment, regulatory approvals can be delayed and competition may drive prices lower shortly after launch. Traditional generics also remain exposed to persistent price erosion, while possible U.S. tariffs create an additional uncertainty.
After its strong share-price performance, Sandoz must continue delivering rapid biosimilar growth to justify its higher valuation. The latest results demonstrate that the strategy is working—but future returns will depend on converting the coming patent cliff into profitable, defensible market share.
This article is for informational purposes only and does not constitute investment advice.
