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Novartis (NYSE:NVS) is trading higher premarket on Tuesday after Q1 results beat estimates and the company raised its FY23 sales and core operating income outlook.
Q1 Core EPS rose +17% on US$ basis (+25% constant currency – cc basis) Y/Y to $1.71.
Operating income was $2.9B (0% +9% cc Y/Y). However, other income from legal matters was more than offset by higher restructuring and impairment charges.
Group net sales grew +3% (+8% cc) Y/Y to ~$12.95B, driven by volume growth of 16 percentage points, price erosion of 4 percentage points and a negative impact from generic competition of 4 percentage points, according to the company
“Novartis delivered strong growth to start 2023, driven by our in-market growth brands, in particular Entresto, Kisqali and Kesimpta,” said Novartis CEO Vas Narasimhan.
Q1 net sales from the Innovative Medicines segment increased +3% (+7% cc) Y/Y to $10.57B, mainly due to Entresto, Pluvicto, Kesimpta and Kisqali partly offset by generic competition mainly for Gilenya.
Heart failure drug Entresto‘s sales grew +28% (+32% cc) Y/Y to ~$1.4B. Multiple sclerosis therapy Kesimpta‘s sales increased +97% Y/Y (+100% cc) to $384M. Breast cancer drug Kisqali revenue jumped +74% (+81% cc) Y/Y to $415M.
Sales of prostate cancer radiopharmaceutical therapy Pluvicto amounted to $211M. Leukaemia therapy Scemblix sales increased +204% (+202% cc) Y/Y to $76M
Myelofibrosis drug Jakavi sales grew +6% (+13 cc) Y/Y to $414M.
Meanwhile, Psoriasis drug Cosentyx sales declined -7% (-4% cc) to ~$1.08B. Multiple sclerosis therapy Gilenya sales declined -62% (-60% cc) Y/Y to $232M. Gene therapy Zolgensma sales declined -15% (-14% cc) Y/Y to $309M.
Outlook for Innovative Medicines 2023: Sales expected to grow mid-single digit (from low-to-mid single digit) at cc.
Q1 Sandoz net sales grew +4% Y/Y (+8% at cc) to ~$2.38B.
Novartis said sales growth was mainly driven by Europe, which benefited from strong volume growth due to momentum from prior year launches and a strong cough and cold season. However, pricing had a negative impact of 7 percentage points.
Global sales of Biopharmaceuticals grew +11% Y/Y (+17% cc) to $518M, driven by ex-US growth.
Novartis noted that the the planned spin-off remains on track for H2 2023.
Sandoz Outlook 2023: Sales expected to grow mid-single digit (from low-to-mid single digit).
Buyback:
In Q1, Novartis bought back 31.5M shares for $2.8B on the SIX Swiss Exchange second trading line under the up-to $15B share buyback announced in December 2021.
Outlook 2023:
“Our pipeline momentum gives us confidence in our growth outlook, highlighted by the NATALEE Phase 3 positive readout for Kisqali in early breast cancer, and we look forward to upcoming readouts for iptacopan in multiple indications and Pluvicto in earlier lines of therapy,” said Narasimhan.
Novartis excluding Sandoz (Innovative Medicines (IM) +Corporate) – The company expects sales to grow mid-single digit (from low-to-mid single digit).
Core Operating Income is expected to grow high single digit to low double digit (from mid-to-high single digit).
Novartis including Sandoz (IM + Sandoz + Corporate) – Novartis expects sales to grow mid-single digit (from low-to-mid single digit).
Core Operating Income is expected to grow high single digit (from mid-single digit).
NVS +2.46% to $103.06 premarket April 25
