Swiss pharmaceutical major Novartis AG (NYSE: NVS) has reported its financial results for the second quarter of 2023, with both sales and profits surpassing analyst forecasts. Net sales for the quarter reached USD 13.622 billion, marking a 9% year-on-year (YOY) increase in constant currency terms. Core net income also saw a significant rise, climbing 19% to USD 3.81 billion.
Raising Full-Year Guidance and Initiating Share Buy-Back Program
The robust performance has prompted Novartis to revise its guidance for the full-year performance upwards. Net sales are now projected to experience high single-digit growth over the 12 months, and group core operating income is anticipated to see low double-digit growth. Capitalizing on its substantial cashflows, Novartis has initiated a new USD 15 billion share buy-back program, which is set to be completed by the end of 2025.
Key Drivers of Global Performance in Q2’23
Notable contributors to Novartis’ global performance during Q2’23 include hypertension therapy Entresto, with a 33% increase in sales to USD 1.5 billion; multiple sclerosis treatment Kesimpta, which saw a staggering 105% growth to USD 489 million; targeted radiopharmaceutical Pluvicto, generating USD 240 million in sales; and breast cancer drug Kisqali, with a 66% rise in sales to USD 493 million.
Challenge to Entresto Patent and China Performance
A setback for Entresto came in the form of a US district court ruling in favor of a generic challenge to the drug’s patent. Novartis is appealing this decision, and no generics have received tentative or final approval in the US. In China, Novartis outperformed expectations with a 14% YOY increase in sales to USD 895 million, making it the fastest-growing multinational corporation in the market for the quarter. Innovative Medicines were a key driver of this success, with sales up 16% YOY.
Sandoz Split and Pipeline Developments
The spin-off of Sandoz has received full board approval and is expected to occur in Q4 of this year. The unit’s net sales reached USD 2.4 billion, growing at a rate of 4% YOY. Novartis is focusing on innovation, targeting five core therapeutic areas and three emerging therapeutic platforms. The company is also anticipating the approval of cholesterol-lowering drug Leqvio in China and Japan during H2’23, which could significantly boost sales.
Discontinued Programs
Novartis has discontinued the development of two pipeline candidates: NIS793 for metastatic pancreatic ductal adenocarcinoma (mPDAC) and MBL949, a GDF15 analogue for obesity treatment, due to lack of efficacy.-Fineline Info & Tech
