On Monday, Barclays (LON:BARC) initiated coverage on Sandoz Group AG (SIX:SDZ:SW) stock with an Overweight rating and set a price target of CHF 45.00. The company, a global leader in the off-patent pharmaceutical market, was spun off from Novartis (LON:0QLR) (SIX:NOVN) in October 2023. Sandoz has shown a notable performance since its separation, with its stock value increasing by 46% compared to the sector’s 16% rise.
The analyst from Barclays highlighted Sandoz's Generics business, which is primarily focused in Europe, as a key component of the company's profit and loss statement. This segment is considered less susceptible to the price deflation and volatility that affects the U.S. generics market. Sandoz is also expanding its Biosimilars business by planning to launch new products globally.
Sandoz has recently introduced Tyruko and Pyzchiva in Europe, which are biosimilar to Biogen (NASDAQ:BIIB)'s Tysabri and Johnson & Johnson (NYSE:JNJ)'s Stelara, respectively. Additionally, the company launched Hyrimoz, a high concentration biosimilar to AbbVie (NYSE:ABBV)'s Humira, in both the U.S. and European markets. These launches are part of Sandoz's strategy to strengthen its position in the biosimilar space.
With two new biosimilars expected to be released before the end of the next year, Barclays anticipates further growth potential for Sandoz. The firm's positive outlook is supported by forecasts that surpass the consensus and the prospect of projected multiple expansion for the company. The price target of CHF 45.00 suggests a roughly 25% upside from the previous Friday's closing price.
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