Note: All changes are versus the prior-year period unless otherwise stated
CEO Vas Narasimhan said Novartis delivered a "solid performance in 2020 across our strategic priorities, despite the challenges of COVID-19." He noted "we advanced our next wave of medicines achieving a number of new approvals highlighted by Kesimpta in the US, Leqvio and Zolgensma in the EU and progressed our…mid-stage pipeline."
Narasimhan also reiterated that "we remain committed" to the Sandoz generic unit, which has been the subject of disposal or spin-off rumours, and where sales growth in 2020 has stagnated due to reduced hospital stays during the COVID-19 pandemic.
Meanwhile, Novartis noted that the jump in quarterly profit was driven by higher operating income and benefiting from lower taxes.
Novartis expects sales to rise this year by a low- to mid-single-digit percentage in constant currencies, while core operating income is projected to grow in the mid-single digits, ahead of sales. The company said its guidance assumes "a return to normal global healthcare systems including prescription dynamics by mid-2021." The company added that the outlook also does not take into account any generic versions of Gilenya or Sandostatin LAR that may enter the US market this year. Narasimhan said "we are confident that the progress we have made on our strategic priorities…will result in top- and bottom-line growth through 2025."
The CEO also announced a revamp of Novartis' digital operations, including the February 1 exit of chief digital officer Bertrand Bodson, who "previously indicated that his next aspiration is towards leading a global business." According to Narasimhan, the execution of Novartis' digital transformation, which got under way three years ago, is "well on track with a strong focus on scaling our efforts." As a result, he said the company is merging its Digital Function and Novartis Business Services units to build a new organisation called Customer & Technology Solutions, effective February 1.
Zuercher Kantonalbank analysts commented that Novartis' "outlook is below our expectations."
Narasimhan indicated that US approval timelines for its siRNA cholesterol-lowering therapy Leqvio (inclisiran), which it gained via the $9.7-billion takeover of The Medicines Company, are "largely…out of our control." The drug was approved by the EU last month for adults with primary hypercholesterolaemia or mixed dyslipidaemia, but the FDA issued a complete response letter (CRL), citing "unresolved facility inspection-related conditions" at an Italian plant belonging to Novartis' supplier Corden Pharma. Narasimhan did not provide details on the "unresolved" issues at the Italian plant, but said on Tuesday that a response to the CRL was planned for the second or third quarter.
Meanwhile, expanding Zolgensma to older patients with spinal muscular atrophy (SMA) is also stalled, after primate studies raised safety concerns and led to further FDA scrutiny. The gene therapy is already approved in the US for SMA patients under two years of age with bi-allelic mutations in the SMN1 gene, but last September the US regulator recommended that the company conduct a new study to evaluate an intrathecal formulation of Zolgensma for use in older patients. "We continue to await our animal data in the mid part to second half of this year," Narasimhan said, regarding the prospects of Zolgensma trials resuming.
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