Novartis Heart, Cancer Drugs Post Disappointing Sales Growth

(Bloomberg) — Novartis AG’s best-selling drug and a key new cancer medicine posted disappointing sales last quarter, even as the Swiss drugmaker lifted profit guidance for a third straight quarter. 

Sales of heart failure medication Entresto fell short of expectations, while closely watched cancer drug Pluvicto only beat estimates because of a one-time gain. The results pushed Novartis shares down as much as 4.3% in early Swiss trading, paring the rise this year to 15%. 

The miss on Entresto — Novartis’s top seller — was notable, Jefferies analyst Peter Welford said in a note. The drugmaker is also facing patent expirations for Entresto as well as two other medicines next year. 

Chief Executive Officer Vas Narasimhan sought to allay concerns about 2025 sales, telling Bloomberg Television that the company expects to grow next year and maintain a mid-term target for 5% compound annual sales growth, despite the patent expiries. “We see consistent margin expansion in the coming years,” he said. 

Novartis is pushing for growth after its leadership wrestled for years to hone one of the most wide-ranging portfolios in the pharmaceutical industry and concentrate on innovation. A major step was the spinoff of former generic-drug unit Sandoz last year.

Sales of Pluvicto have been a key focus for investors, as Novartis seeks to boost production and broaden its use. The drugmaker’s aim has been to expand its reach in terms of referrals, which Novartis feels “really good about,” Narasimhan said on a call with reporters.  

On obesity, the CEO reiterated that Novartis is focused on next-generation technologies that could improve the profile of current weight-loss drugs in terms of side effects, the frequency of dosing or the preservation of muscle. 

“In the meantime, we feel like we have a full pipeline of medicines in cancer, in immunology, in neuroscience and cardiovascular disease such that we’re not really reliant on the obesity wave,” he said.

What Bloomberg Intelligence Says:

Novartis’ 2024 guidance raise implies a consensus hike of 1-2% but a lack of commentary on 2025 — important given US patent expirations for cardiovascular drugs Entresto and Promacta, combined an estimated 10% of sales — may disappoint given its strong share-price re-rating (up 18% since mid-April).

— John Murphy, BI pharma analyst

Novartis 3Q Beat Needs 1-2% Consensus Raise, 2025 Unclear: React

Third-quarter core earnings per share rose to $2.06, the Basel, Switzerland-based drugmaker said on Tuesday. That topped analysts’ estimates, helped by the stronger-than-expected performance of psoriasis medicine Cosentyx. 

Core operating income will rise by a high-teens percentage this year, while sales will grow by low double digits, Novartis said. Both targets are at the top end of its earlier guidance range.

–With assistance from Lisa Pham and Lizzy Burden.

(Updates with Bloomberg TV interview from fourth paragraph)

©2024 Bloomberg L.P.