Sandoz legal costs weigh down profits

Sandoz weighed down by legal costs in the first half of the year Keystone-SDA

Swiss generic drugs giant Sandoz saw profits plummet by 70% in the first six months of the year as a result of huge legal costs.

Profits slumped to $109 million after the company was fined around $480 million in the United States.

The Rhine-based multinational had previously set aside provisions for this anticipated legal cost.

The half-yearly report published on Wednesday also lists restructuring costs of $54 million, costs relating to empowerment of $47 million, costs for optimising production facilities of $41 million and software deployment costs of $33 million.

Turnover grew by 10% in US dollars, or 5% in local currencies, to $5.76 billion. This performance was driven in particular by a 25% rise in revenue from biosimilars, to $1.86 billion.

Revenue from the core generics business stabilised, falling by 1% in local currencies but rising by 4% when converted into US dollars, to $3.89 billion. Attributed to disruptions in the penicillin market, the decline stood at 3% over the first three months of the year

The share of biosimilars in turnover thus reached 33%, compared with 29% 12 months earlier, the Rhineland-based multinational highlighted in its half-yearly report.

On the profitability front, earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for any items deemed non-recurring, jumped by 15% to $1.21 billion, driven by an increase of around 90 basis points to 20.9%. Basic net profit rose by 18% to $750 million.

The figures presented are more or less in line with the forecasts of analysts surveyed by AWP.

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Translated from French, reviewed by an English Department journalist.