Newly-focussed Novartis off to a good start as it lifts 2019 guidance

Novartis said it had started 2019 with “strong” sales and double digit core operating income growth on Wednesday, as it updated the market on its first quarter.

The Swiss pharmaceuticals giant also noted the launch of Mayzent and the spin-off of Alcon in the period, as it upgraded its profit guidance.

It said it was continuing its transformation to a “focussed” medicines company, with continuing operations net sales up 7% at constant currencies to $11.11bn, driven by its innovative medicines operations.

Of those, Cosentyx saw net sales of $791m, up 41% at constant currencies, with strong demand growth in all indications and regions, while Entresto grew 85% at constant exchange rates to $357m, including the benefit from new data on hospital initiation.

Oncology sales were ahead 9% at constant currencies, which was mainly driven by $106m at Lutathera, $307m at Promacta, $91m at Kisqali, and $45m at Kymriah.

Novartis’ core operating income grew 18% year-on-year at constant currencies in the period to $$3.25m, driven by strong sales growth, with net income ahead 4% at constant exchange rated $1.87bn, impacted by a net impairment charge and lower divestment gains.

Free cash flow stood at $1.9bn, which was in line with the prior year, which included a milestone receipt.

Sandoz sales fell 2% at constant currency, due to continued US price pressure.

Looking ahead, Novartis described 2019 as “catalyst rich”, with potential blockbuster launches on track.

Mayzent (siponimod) had been launched for RMS, including active secondary progressive MS (SPMS), while Brolucizumab (RTH258) was filed in the EU and US with PRV, with a US launch expected within the year.

New data on Zolgensma (AVXS-101) had been presented at MDA, supporting the product as a foundation therapy.

The company’s 2019 guidance for core operating income growth was revised upwards to “grow [at] high single digits” in constant currency, with its sales guidance confirmed to grow in the mid-single digits at constant exchange rates.

In connection with the Alcon spin-off on 9 April, the Novartis board did note that it would report a one-time non-cash IFRS gain of approximately $4.7bn as part of its second quarter discontinued operations results.

“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,” said chief executive officer Vas Narasimhan.

“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.”