Novartis chief executive Vas Narasimhan has said he thinks the company is going through a new product launch phase that is unprecedented in its history, and that is starting to be felt in its top-line.
The Swiss group raised its guidance for 2019 sales and operating profit again today as it posted an 8% increase in revenues to $11.8bn, driven by seven recently-launched products that all posted growth of 25% or more in the quarter.
Topping the table once again is Novartis’s psoriasis drug Cosentyx (secukinumab), which grew 25% to $858m, with heart failure therapy Entresto (sacubitril/valsartan) rocketing 81% after being recommended for first-line use in hospitalised patients by a European cardiology association in May.
There was also increased demand for generics and biosimilars sold by Sandoz, a division that has been struggling to grow its business in recent years and has been the subject of perennial spinoff rumours, particularly after the recent exit of its CEO Richard Francis.
Vas Narasimhan
In the second quarter Sandoz sales were up 3% to $2.4bn, with double-digit gains in Europe for its trio of biosimilars – Rixathon (rituximab), Hyrimoz (adalimumab) and Erelzi (etanercept). That reverses an 8% decline in the first-quarter.
Narasimhan also said it was particularly pleasing to see strong growth in its emerging oncology business, which rose 9% with contributions from new prostate cancer therapy Lutathera, Kisqali (ribociclib) for breast cancer and CAR-T Kymriah (tisagenlecleucel).
He added there is strong momentum in the company both operationally and from its pipeline, with the second quarter seeing two new approvals – spinal muscular atrophy gene therapy Zolgensma (onasemnogene abeparvovec) and Piqray (alpelisib) for breast cancer – that both have blockbuster sales potential.
Zolgensma ‘on track’
When it comes to Zolgensma – billed as potentially a multibillion-dollar brand – Novartis is seeing strong demand, as well as little evidence so far of barriers to its take-up from public and private payers in the US given the therapy’s $2.1m list price. The picture is “so far, so good” Narasimhan told CNBC this morning.
It wasn’t all positive news for the company of course. Kymriah’s $58m contribution in the quarter is only slightly up on the $45m it made in the first, suggesting that the company is still facing headwinds getting it to patients. Meanwhile, Lutathera’s contribution was only $3m more in the second quarter compared to the first three months of the year, suggesting a slowdown in momentum.
Narasimhan also confirmed that the company was setting aside a sizeable sum of $700m in the hope of settling a bribery lawsuit in the US.
Novartis now expects 2019 core operating income to grow at a low-double-digit to mid-teens percentage rate, up from high single digits before, with sales in the mid to high-single digit range.