Weaker sales of key drugs leads to mixed quarter for Novartis

Novartis reported a mixed third quarter on Tuesday, as the pharmaceutical giant lifted its profit outlook for the year but faced disappointing sales in key areas.

Its shares were in the red in early Swiss trading due to weaker-than-expected sales of its heart failure drug, Entresto, and a cancer drug, Pluvicto, which only exceeded estimates because of a one-time gain.

Entresto, Novartis’s top-selling medication, fell short of analyst expectations by 1.4%, raising concerns over the company’s growth in the critical segment.

The company had pursued a strategy focussed on innovation, restructuring its portfolio in recent years, including the spinoff of its Sandoz generics unit in 2022, to concentrate on cutting-edge treatments.

Novartis CEO Vas Narasimhan highlighted efforts to expand production and usage of Pluvicto, aiming to grow its referrals and reach.

While Novartis was still exploring next-generation obesity drugs with fewer side effects and longer dosing intervals, Narasimhan emphasised that the company was not dependent on the burgeoning obesity drug market.

“We feel like we have a full pipeline of medicines in cancer, in immunology, in neuroscience and cardiovascular disease such that we’re not really reliant on the obesity wave,” he said.

Third-quarter core earnings per share climbed to $2.06, above the $1.94 analyst estimate, with sales also surpassing forecasts.

Novartis said it expected core operating income to rise in the high teens percentage-wise for the year, alongside low double-digit sales growth, both at the upper end of its previous guidance.

However, there was a lack of detailed outlook on 2025.

At 0931 CEDT (0831 GMT), shares in Novartis were down 3.3% in Zurich at CHF 96.52.

Reporting by Josh White for Sharecast.com.