Novartis lifts guidance again as Q3 results top expectations, boosted by sales debut of Zolgensma gene therapy

Headline results for the third quarter:

Innovative medicines sales

$9.7 billion

+13%

Sandoz sales

$2.5 billion

+3%

Overall revenue

$12.2 billion (forecasts of $11.7 billion)

+10%

Profit

$2 billion

+26%

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

 

What the company said:

CEO Vas Narasimhan said "Zolgensma and Piqray launched with strong momentum and Beovu just launched with a clearly differentiated label." He added "we also continue our innovation performance with a number of positive milestones highlighted by ofatumumab's remarkable efficacy in relapsing multiple sclerosis, with the potential to be the first self-administered, subcutaneous, B-cell therapy."

Narasimhan indicated that 99% of patients with spinal muscular atrophy who were eligible for Zolgensma were receiving it, although some have to go through an appeal process to do so. He added that, even with appeals, patients were on average receiving the $2.1-million gene therapy within 30 days of requesting it.

The CEO also noted that Zolgensma's uptake has not been negatively impacted by a data manipulation controversy that has sparked criticism and could lead to criminal penalties from the FDA. Novartis recently pinned the blame for the irregularities on two former AveXis executives.

 

Other results:

  • Oncology product sales: $3.7 billion, up 12%
    • Tasigna: $487 million, up 10%, with gains in the US and emerging markets, partially offset by a decline in Europe
    • Promacta/Revolade: $380 million, up 29%, boosted by growth across all regions from increased use in chronic immune thrombocytopaenia and further uptake as a first-line treatment for severe aplastic anaemia in the US and Japan
    • Tafinlar/Mekinist: $345 million, up 19%, led by demand in metastatic and adjuvant melanoma as well as non-small-cell lung cancer, with ongoing uptake of the adjuvant melanoma indication in Europe
    • Gleevec/Glivec: $320 million, down 16%, hit by generic competition in most major markets
    • Jakavi: $279 million, up 13%, driven by demand in the myelofibrosis and polycythaemia vera indications
    • Kisqali: $123 million, up 71%, with "strong growth" in the US driven by use in metastatic breast cancer patients and "solid uptake" continuing in Europe and other regions
    • Lutathera: $119 million, up 113%, led by the US, with over 160 centres actively treating patients, and ongoing launches in Europe
    • Kymriah: $79 million, up from $20 million in the prior-year period, with ongoing uptake in the US and Europe, and more than 20 countries now providing coverage for at least one indication
    • Piqray: $43 million, Novartis says US launch for patients with a PIK3CA mutation in HR+/HER2- advanced breast cancer has "progressed well"
  • Cosentyx: $937 million, up 25%, with continued momentum in the US, where sales were up 31%, as well as the rest of world, boosted by "strong first-line access" in all three indications
  • Gilenya: $829 million, up 1%, benefitting from stock and trade movements in the US, partly offset by higher competitive pressure worldwide
  • Lucentis: $500 million, up 2%, driven by "strong market growth"
  • Entresto: $430 million, up 59%, growth fueled by increased demand in both the hospital and ambulatory settings
  • Zolgensma: $160 million, above analyst expectations of around $98 million, Novartis says that so far coverage plans are in place covering about 90% of commercial patients and roughly 30% of Medicaid patients; Zolgensma is currently under review in Europe and Japan, with decisions expected in the first quarter and first half of 2020, respectively
  • Biopharmaceuticals: $430 million, up 23%, boosted by strong double-digit growth in Europe from Rixathon (rituximab), Hyrimoz (adalimumab) and Erelzi (etanercept)
  • Emerging growth markets: $2.3 billion, up 10%, led by strong double-digit growth in China

 

Looking ahead:

Novartis projects sales in 2019 for its focused medicines company to grow by a high single-digit percentage at constant currencies, up from its previous outlook of mid-to-high single digits, while core operating income is now expected to climb by a mid-to-high teen percentage. Divisional sales have also been revised upward, with innovative medicines anticipated to grow from high-single to low-double digits, while Sandoz sales are expected to increase by low-single digits. The forecast assumes that no Gilenya generics will enter in the US market this year.

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