Exchange rates and weak eyecare sales held back Novartis’ revenues in the second quarter, but analysts expect new heart failure drug Entresto to set the company back on the growth track.
Group sales fell 5% to $12.7bn in the quarter, with the pharma division also slipping back around 4% to $7.8bn on the back of generic competition for high blood pressure drug Diovan (valsartan) and other products such as its oestrogen patch Vivelle-Dot.
The forthcoming US launch of Entresto (valsartan and sacubitril) is predicted to drive upwards momentum for the pharma division in the coming months as it starts its trajectory towards what some analysts believe will be peak sales of around $5bn.
Novartis’ decision to set the drug’s price a little higher than expected – at $12.50 per day – has not generated any tangible resistance in the US, according to chief executive Joe Jimenez, who said the company expects steady take-up of the product in the coming months and an acceleration in 2016.
Meanwhile, there were other bright spots in Novartis’ pharma portfolio, including oral multiple sclerosis therapy Gilenya (fingolimod) which grew 26% to $700m in the quarter and leukaemia therapy Tasigna (nilotinib), up 21% to $412m.
Tasigna is a key product for Novartis as it is the follow-up to big seller Glivec (imatinib), which is facing the threat of generic competition outside the US. Sales of the drug – which remains Novartis’ top product – dipped 1% to $1.18bn in the quarter.
Cancer drug Afinitor (everolimus) also put in a good performance – up 19% to $423m – although the product is likely to come under pressure from newer cancer agents such as Bristol-Myers Squibb’s Opdivo, which has just outperformed it in a kidney cancer trial.
In its respiratory portfolio, Novartis said long-acting muscarinic antagonist/long-acting beta agonist (LAMA/LABA) product Ultibro (indacaterol and glycopyrronium bromide) added $66m to its coffers, three times the sales recorded in the same period of 2014.
Pharma chief David Epstein said the drug is outperforming competitors in markets where other LAMA/LABA combinations been launched, according to data from IMS. It competes with drugs such as GlaxoSmithKline’s Anoro (umeclidinium bromide and vilanterol) and Boehringer Ingelheim’s just approved Spiolto (tiotropium and olodaterol).
Novartis said it is also encouraged by a strong performance in its generics division Sandoz, with overall sales up 11% and biosimilar turnover up 57%. The division also has a new growth driver in the form of Glatopa, its recently-approved generic of Teva’s MS blockbuster Copaxone (glatiramer acetate).
Jimenez said: “Novartis had a strong quarter for innovation, with US approval and launch of both Entresto and Glatopa being key highlights. We are confident we will deliver on our priorities for the year, and confirm our full-year guidance.”
For 2015 as a whole, the company is predicting a sales increase in the mid-single digits, with operating income rising in the high-single-digit range.