This is the best feature of the sandvich!
It works exactly like a health pack. It's great to be able to give a medic your sandwich, since he does not have a quick way to self heal. The sandvich will not regenerate after the timer expires - you still need to find a health-pack or dispenser.
Also, if you are under pressure and dont have time to eat the sandvich, you can drop it and walk over it. It only heals 50%, but the speed is the upside. Many times I'm being chased, I turn a corner, throw the sandvich, run over it, turn around, and mow down my attacker. This has been patched for a while now. Sandviches will not replenish your health by simply dropping them and running over them.
Just be careful the enemy can't get to it first. It can also heal them.