Novartis AG (NVS), the Swiss pharmaceutical giant, delivered a strong performance in the third quarter, exceeding analyst expectations and raising its full-year guidance. The company reported sales of $12.823 billion, a 9% increase compared to the same period last year (+10% on a constant currency basis). This outperformance surpassed the consensus estimate of $12.76 billion, demonstrating the strength of Novartis’s core business.
Volume growth contributed significantly to the positive results, adding 12 percentage points to the overall sales increase. Adjusted earnings per share (EPS) also came in above expectations, reaching $2.06, up from $1.74 a year ago and beating the consensus of $1.96. Core operating profit for the quarter rose to $5.15 billion, a healthy increase from $4.41 billion in the previous year.
Novartis’s impressive performance was driven by strong growth across its key products. Cosentyx, a treatment for psoriasis and psoriatic arthritis, saw sales jump by 27% to $1.69 billion, fueled by recent launches and strong volume growth in core indications. The company’s heart failure drug, Entresto, also performed exceptionally well, with sales rising 26% to $1.87 billion. This growth was attributed to increased penetration in the U.S. and Europe following guideline-directed medical therapy for heart failure, and expanded use in China for hypertension.
Kesimpta, Novartis’s multiple sclerosis treatment, also saw robust demand, with sales increasing 28% to $838 million. This growth reflects the drug’s high efficacy and convenient self-administered dosing.
The company generated a significant $6 billion in free cash flow during the third quarter, representing an 18% increase year-over-year.
“All key growth drivers contributed to the momentum,” said CEO Vas Narasimhan. “We achieved important indications expansions for Kisqali in early breast cancer and Fabhalta in IgA nephropathy, and we completed our PSMAfore filing for Pluvicto in the US. With the momentum in our business and pipeline, we were able to once again upgrade our full-year guidance and remain highly confident in our mid-term outlook.”
Novartis’s confidence in its future prospects was further reflected in its decision to raise its full-year guidance for 2024. The company now expects full-year core operating income to grow by a “high teens” percentage, up from its previous guidance of a “mid-to-high teens” percentage. Novartis also forecasts full-year sales growth in the low double digits, compared to its previous guidance of high-single to low-double-digit growth.
While Novartis’s strong performance sent positive signals to investors, the company’s shares saw a dip of 3.29% to $111.82 in pre-market trading. This slight decline could be attributed to investors adjusting their expectations following the recent positive developments and strong guidance.
Overall, Novartis delivered a solid third-quarter performance, demonstrating its continued growth trajectory and strong market position. The company’s focus on innovation, key product launches, and expanding indications for its existing drugs, combined with its optimistic outlook, suggests continued success in the years to come.
