Novartis AG raised its sales and profit forecasts for the year after a handful of new drugs helped first-quarter earnings beat estimates.
(Bloomberg) — Novartis AG raised its sales and profit forecasts for the year after a handful of new drugs helped first-quarter earnings beat estimates.
Operating profit will likely grow in the high-single digits this year and revenue will likely increase in the mid-single digits, the Swiss drugmaker said in a statement Tuesday. The shares rose as much as 1.7% in early Zurich trading.
Medicines for heart disease, cancer and multiple sclerosis buoyed earnings. The drugmaker got an unexpected boost last month after a treatment called Kisqali succeeded ahead of schedule in a study of people with early breast cancer, a much bigger group of patients than had previously been able to take the drug. Peak annual sales for Kisqali could now reach $8 billion, Barclays Plc analyst Emily Field said.
The cancer results were an important win for Chief Executive Officer Vas Narasimhan, who has wrestled with pipeline setbacks even as he sought to refocus the company on high-growth innovative medicines.
The drugmaker is actively developing other assets in breast cancer to partner with Kisqali, as well as follow-on drugs, Narasimhan said in a call with reporters. “It will be a priority for us to build out breast cancer broadly,” he said.
Meantime, Novartis discontinued or out-licensed about one-tenth of its pipeline projects during the quarter after a comprehensive review.
Earnings per share excluding some items rose to $1.71 last quarter from $1.46 a year earlier, according to the drugmaker. Analysts had forecast profit of $1.57.
Sales of the blockbuster heart medicine Entresto rose 32% at constant currencies to $1.4 billion. Pluvicto, a new prostate cancer treatment, had a “strong US launch.” And Kisqali gained 81% in the quarter.
Novartis is still on track to separate from its generic-drug unit, Sandoz, by the second half of the year.
What Bloomberg Intelligence Says:
Most key products outperformed and SG&A spending was lower. The separation of Sandoz — the company’s generics business — remains on track for 2H with two Capital Markets events planned in June. A detailed 1Q pipeline review shows a 10% shrinkage of Novartis’ portfolio.
— John Murphy, BI pharma analyst
The prior forecast was for sales growth in the low-to-mid single digits and profit in the mid-single digits.
(Updates with shares in second paragraph. An earlier version of this article corrected a misspelling in the Novartis CEO’s name.)
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