Headline results for the second quarter:
- Innovative medicines sales: $10.6 billion, up 15%
- Sandoz sales: $2.4 billion, up 11%
- Overall revenue: $13 billion (forecasts of $12.5 billion), up 14%
- Profit: $2.9 billion (forecasts of $3.4 billion), up 55%
Note: All changes are versus the prior-year period unless otherwise stated
What the company said:
"Novartis delivered a strong second quarter, driven by the momentum of our key growth brands, including Cosentyx, Entresto, Zolgensma, our oncology portfolio and the launch of Kesimpta which continues to accelerate," remarked CEO Vas Narasimhan.
- Oncology product sales: $3.9 billion, up 11%
- Tasigna: $523 million, up 9%, mainly driven by emerging growth markets
- Promacta/Revolade: $513 million, up 22%, driven by use in chronic immune thrombocytopenia and as first-line treatment for severe aplastic anaemia
- Tafinlar/Mekinist: $425 million, up 15%, with increased demand in BRAF+ adjuvant melanoma and non-small-cell lung cancer
- Jakavi: $398 million, up 28%, led by "strong" demand in the myelofibrosis and polycythemia vera indications
- Gleevec/Glivec: $263 million, down 9%, hit by increased generic competition
- Kisqali: $225 million, up 42%, with continued growth in Europe, emerging growth markets and the US
- Kymriah: $147 million, up 25%, mainly due to growth in Japan, Europe and emerging markets
- Lutathera: $118 million, up 12%
- Piqray: $82 million, up 4%, with growth from launches in Europe and emerging markets partially offset by declines in the US due to the impact of the COVID-19 pandemic
- Cosentyx: $1.2 billion, up 24%, boosted by demand in the US and Europe, as well as "strong" volume growth in China following the drug being put on the country's National Reimbursement Drug List (NRDL) in the first quarter
- Entresto: $886 million, up 53%, led by demand for use in heart failure patients with reduced ejection fraction
- Gilenya: $721 million, down 2%, hit by increased competition
- Lucentis: $551 million, up 37%, benefiting from a low prior year comparison due to COVID-19 related disruption and strong growth in China following NRDL listing in 2019
- Xolair: $355 million, up 23%, driven by the chronic spontaneous urticaria and severe allergic asthma indications
- Zolgensma: $315 million, up 54%, driven by expanding access in Europe, while US sales were broadly in line with the year earlier
- Aimovig (ex-US territories excluding Japan): $53 million, up 61%
- Kesimpta: $66 million
- Biopharmaceuticals: $524 million, up 12%, despite increased competition particularly in Europe
- Emerging growth markets: $2.7 billion, up 17%, with sales in China growing 18% on a constant-currency basis to $811 million
Novartis reaffirmed that it 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 added that innovative medicine sales are forecast to make mid-single-digit gains in 2021 as well, with Sandoz revenue declining in the low- to mid-single digits.
The drugmaker noted that "while demand is starting to return to pre-COVID-19 levels in most geographies and therapeutic areas, we still see a slight impact on parts of our business for example in oncology, generics and certain geographies." Chief financial officer Harry Kirsch explained that the coronavirus pandemic was still affecting cancer patients' diagnostic rates, thus hitting sales of products sold via hospitals. He estimated that business was probably averaging 80% to 90% of pre-COVID-19 levels.
Novartis said it expects "further easing of COVID-19 restrictions in the second half of the year with a positive impact on business dynamics."
What analysts said:
Stefan Schneider of Vontobel noted that the results clearly beat expectations, but Novartis' failure to lift its guidance "indicates that the pandemic situation has not yet returned fully to pre-pandemic levels and that the situation remains somewhat unpredictable due to the emerging variants."
Novartis disclosed that its recent FDA resubmission of Leqvio (inclisiran), an siRNA therapy targeting PCSK9, has a target action date of January 1 next year. The agency had previously issued a complete response letter citing "unresolved" issues at a third-party production facility.
The company added that it discontinued development of ECF843 in moderate-to-severe dry eye disease as results from a Phase II did not support continuation of the programme. In 2017, Novartis exercised an option to in-license the recombinant human lubricin (rh-Lubricin) protein from Lubris.