Saturday, April 20, 2024

Novartis Achieves Impressive Sales and Operating Income Growth, Spins Off Sandoz, Hits Key Innovation Goals

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Novartis, the global pharmaceutical giant, has successfully transitioned into a “pure-play” innovative medicines business following the spin-off of Sandoz. The third quarter results, discussed here, pertain to continuing operations.

Q3 saw a remarkable growth of 12% (cc) in sales, equivalent to a 12% growth in USD. Core operating income, during the same period, surged by an impressive 21% (cc), amounting to 17% in USD.

The growth is primarily attributed to the strong performance of key products, including Kesimpta (+124% cc), Entresto (+31% cc), Kisqali (+76% cc), Pluvicto (+217% cc), and Scemblix (+157% cc).

Operating income for Q3 increased by 13% (cc), although there was a slight dip of 4% in USD, which can be attributed to higher impairments due to the discontinuation of early-stage development projects.

Net income for Q3 registered an impressive growth of 37% (cc), which translates to 14% in USD. This substantial increase was primarily due to higher operating income.

Novartis achieved strong free cash flow in Q3, amounting to USD 5.0 billion, representing a 24% increase in USD. This was driven by increased net cash flows from operating activities.

Q3 core earnings per share (EPS) demonstrated an impressive growth of 29% (cc), which is equivalent to a 24% growth in USD, reaching USD 1.74.

The nine-month performance for Novartis has been robust, with sales growing by 10% (cc), and 8% in USD. Core operating income increased by 19% (cc), amounting to 13% in USD.

During Q3, Novartis achieved key milestones in innovation. These milestones included FDA approval for the intravenous formulation of Cosentyx in three indications, as well as positive Phase 3 data for several pipeline assets with blockbuster potential. Notable among these are Pluvicto, iptacopan, remibrutinib, and Lutathera.

Furthermore, Kisqali completed its Phase 3 NATALEE iDFS 500 event analysis. The company has also initiated a share buyback program of up to USD 15 billion, which is set to be completed by the end of 2025.

In light of its strong momentum, Novartis has raised its full-year 2023 guidance for core operating income. The net sales are expected to grow in the high single digits, while core operating income is anticipated to grow in the mid to high teens, as opposed to the earlier projection of low double-digits to mid-teens growth. This boost in guidance is a testament to Novartis’ continued commitment to delivering innovative solutions and achieving substantial growth in the pharmaceutical industry.

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