Novartis has posted a 7% increase in sales in the first quarter, and has increased its profit forecasts for the year.
The Switzerland-headquartered firm has just spun off its eye care division Alcon, raising $4.7bn in the process, and helping it to create a leaner firm focused on medicines, and especially first-in-class and breakthrough therapies.
The spin-off has helped it raise its 2019 guidance for its core operating income growth, now revised upwards to high single digit growth, and markets have also reacted positively, its share price rising 2.8% this morning.
The company also confirmed its earlier sales guidance for the year of sales guidance of mid single digit growth, and this has been backed up in Q1 with strong performances from drugs such as psoriasis treatment Cosentyx (rising 41% to $791m) and heart failure treatment Entresto, which rose 85% to $357m in the three month period.
The company also saw the approval and launch of its new oral multiple sclerosis drug Mayzent in the US. The drug is forecast to be a blockbuster, and Novartis hopes it can make up for the decline in its older MS pill Gilenya, which saw its revenues decline 7% in Q1.
There are head winds elsewhere, including a further disappointing performance from its generics and biosimilars division, Sandoz. It posted an 8% decline in revenues – the company blaming 9 percentage points of price erosion (mainly in the US) offsetting volume growth of 7%.
Despite discussions of a possible sell-off, Sandoz’s biosimilars division is performing well, with double digit growth in Europe thanks to products such as Rixathon (rituximab), Hyrimoz (adalimumab) and Erelzi (etanercept).
As with most big pharma companies, oncology is a key focus for Novartis, and the quarter saw some encouraging signs, with the franchise up 9% thanks mainly to new cancer treatments Lutathera ($106m), Promacta ($307m), Kisqali ($91m) and Kymriah ($45m).
Having said this, sales of CAR-T therapy Kymriah remain underwhelming, particularly in relation to its rival, Gilead’s Yescarta, which achieved $81m in revenues in the last quarter.
The firm has also hit an unexpected problem in the last few weeks in connection with an other major new brand, migraine treatment Aimovig, with marketing partner Amgen looking to break up the alliance.
Nevertheless, CEO Vas Narasimhan has reason to be upbeat about the company’s outlook, with some key filings set for later this year.
These include rare disease gene therapy Zolgensma, breast cancer candidate alpelisib (BYL719) and Lucentis follow-up brolucizumab.
“Novartis is off to a strong start in 2019 with the Mayzent launch, successful Alcon spin-off, and strong operational execution leading us to revise 2019 profit guidance upwards. We enter an exciting period with expected launches of Zolgensma, BYL719 and brolucizumab and multiple late stage readouts. With our strong pipeline, focus on productivity, and commitment to cultural transformation, we are well positioned for growth in 2019 and the future.”
To steady the ship at Sandoz, where its long-serving head Richard Francis recently departed, the company has now appointed another Richard, Richard Saynor as the division’s new CEO.
The company has poached Saynor from his current role as SVP Classic & Established Products, Commercial & Digital Platforms at GSK.