Thanks Neil.
The problem with the first solution is that the projection of the (flat) sketch plane for the cut will be distorted since it is only tangent to the cylinder at one point (actually a line). Each point of the cut needs to be tangent to the cylinder (imagine a laser cutting the tooth profile as the cylinder spins on its axis).
The sheetmetal approach would solve that problem. I have never done sheetmetal modelling in Solidworks. Is it possible to add additional solid body features to the sheetmetal in its rolled up state and still keep it as a single part?