Novartis boosts annual sales guidance as Cosentyx, Entresto lead third-quarter growth

Headline results for the third quarter:

Innovative medicines sales

$8.6 billion

+6%

Sandoz sales

$2.4 billion

-6%

Alcon sales

$1.8 billion

+3%

Revenue

$12.8 billion (forecasts of $12.8 billion)

+3%

Profit

$1.6 billion

-22%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Our strong operational performance continues as we delivered margin accretive growth, driven by the innovative medicines division, and we are on track to deliver our full year guidance," CEO Vas Narasimhan remarked.

The executive added "we progressed our breakthrough medicines pipeline including…the planned acquisition of Endocyte in radioligand therapy." Narasimhan indicated that the company is "looking for acquisitions that strengthen us in our key therapeutic areas, or that help us build out these three platforms: cell therapy, gene therapy and radioligand therapy."

Other results:

  • Oncology product sales: $3.3 billion, up 7 percent
    • Tasigna: $444 million, down 8 percent
    • Gleevec/Glivec: $380 million, down 15 percent
    • Promacta/Revolade: $295 million, up 30 percent
    • Tafinlar/Mekinist: $291 million, up 30 percent, due to increased demand driven by melanoma and non-small-cell lung cancer
    • Jakavi: $248 million, up 23 percent
    • Kymriah: $20 million
  • Gilenya: $818 million, up 2 percent
  • Cosentyx: $750 million, up 35 percent, with strong volume growth across all indications in the US and EU
  • Lucentis: $491 million, up 2 percent
  • Entresto: $271 million, up 112 percent
  • Biopharmaceuticals: $349 million, up 21 percent on a constant currency basis, led by Rixathon and Erelzi in Europe and Zarxio in the US
  • Emerging growth markets: $3.2 billion, up 2 percent, with China up 13 percent

What analysts said:

"Today is less about the earnings number and more about the company’s transition to much more of a pure-play pharma business, which seems to be going down well with investors," Berenberg analyst Laura Sutcliffe commented.

Looking ahead:

Novartis now expects annual sales to grow in the mid-single digits on a constant currency basis, lifted from an earlier estimate of growth in the low to mid-single digits. The company added that revenue in innovative medicines is forecast to show mid to high-single digit growth, up from an earlier prediction of mid-single digit growth. Novartis reaffirmed that core operating income will increase in the mid to high-single digits.

Pipeline update:

Novartis disclosed that it received a complete response letter from the FDA related to a filing seeking approval of canakinumab, also known as ACZ885, for cardiovascular risk reduction. The company said it "is evaluating the feedback provided." Novartis filed for US and European approval of canakinumab in this indication in late 2017, having previously reported that in the late-stage CANTOS trial, the IL-1-beta antibody significantly reduced the risk of major adverse cardiovascular events in certain patients who have had a prior heart attack.

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