Novartis, the Swiss pharmaceutical giant, announced impressive second-quarter results on July 18. Let’s take a closer look at the key details:
Sales Surge Past Expectations
Sales for the second quarter reached $13.62 billion, surpassing last year’s figure of $12.78 billion. Analysts had anticipated sales to be around $13.45 billion.
Net Profit Shows Solid Growth
Net profit for the quarter increased to $2.32 billion, up from $1.70 billion in the same period last year. However, it fell short of consensus expectations of $3.55 billion.
Key Growth Drivers
Several of Novartis’ key drugs performed exceptionally well. Kesimpta, a multiple-sclerosis medicine, exceeded consensus expectations by 13%. Kisqali, a breast-cancer drug, surpassed expectations by 8%. Meanwhile, Scemblix, a leukemia treatment, performed remarkably well, coming in 25% above consensus estimates. The company’s innovative-medicines division outperformed expectations by 4%. The generics division, Sandoz, which is expected to be spun off soon, met consensus expectations. Furthermore, Novartis experienced a significant boost in sales due to the improved performance of its heart-failure top seller, Entresto, which saw a 37% increase in sales.
Upward Revision of Guidance
Novartis raised its guidance for the future. The company now expects group sales to grow in the high single digits, compared to the previous forecast of mid-single digits. Furthermore, core operating income is expected to grow in the low double digits, as opposed to the previous forecast of high single digits. Analysts at UBS view this new guidance as being in line with current consensus, and Stifel analysts predict a likely upward revision of consensus.
Sandoz Spinoff Confirmed
Novartis confirmed its plans to spin off Sandoz, its generics unit, early in the fourth quarter. An extraordinary general meeting has been scheduled for September 15. According to Jefferies analysts, Sandoz’s sales and margins are expected to exceed consensus expectations.
With these remarkable results, Novartis continues to solidify its position in the pharmaceutical industry.
