Novartis delivered solid third quarter with Growth Products[1] offsetting Gleevec patent expiration; several positive readouts for potential blockbusters [1]
- Q3 net sales (-1% cc[2] and USD) broadly in line with prior year due to strong performance of Growth Products
- Gilenya (USD 790 million, +15% cc) continued double-digit growth
- Cosentyx (USD 301 million) on track for blockbuster status in first full year after approval
- Oncology growth drivers including Tafinlar + Mekinist (USD 172 million, +29% cc), Promacta/Revolade (USD 168 million, +44% cc) and Jakavi (USD 149 million, +47% cc)
- Sandoz Biopharmaceuticals[1] (USD 262 million, +41% cc) delivered strong growth
- Q3 core[2] operating income down 3% (cc and USD), reflecting generic erosion and growth investments, partially offset by productivity initiatives
- Core M&S up 0.8 percentage points (cc) to 24.3% of sales, supporting new launches and Alcon
- Core operating income margin declined 0.6 percentage points (cc)
- Core EPS was USD 1.23 (-3% cc)
- Free cash flow[2] was USD 2.6 billion (-7% USD) in Q3; USD 6.5 billion (+3% USD) in 9M
- Q3 net income up 7% (cc and USD) from higher operating income and income from associated companies
- Strong pipeline progress with key data readouts, filings and regulatory decisions in Q3
- LEE011 plus letrozole demonstrated superior PFS as first-line treatment of HR+/HER2- advanced breast cancer vs. letrozole alone; granted FDA Breakthrough Therapy designation
- BAF312 in SPMS[3] met primary endpoint, significantly reducing risk of disability progression
- AMG 334 met primary endpoint in first Phase III episodic migraine study
- Ilaris received three new FDA approvals for Periodic Fever Syndromes
- Sandoz biosimilar etanercept, Erelzi, received FDA approval
- Entresto (USD 53 million in Q3) grew steadily; FY sales guidance of ~USD 0.2 billion confirmed
- Continuing to invest in Alcon growth plan
- Contact lenses delivered another quarter of growth; Dailies Total1 Multifocal launches in US and EU expected to continue growth trajectory
- Innovation continued to accelerate in Surgical with FDA approvals for CyPass, UltraSert Toric IOL
- 2016 Outlook confirmed
- Net sales expected to be broadly in line with prior year (cc)
- Core operating income expected to be broadly in line or decline low single digit (cc)
Basel, October 25, 2016 - Commenting on the results, Joseph Jimenez, CEO of Novartis, said:
"Novartis delivered a solid Q3 despite the Gleevec generic impact in the US, due to the strong performance of our Growth Products. We continued to drive innovation, with positive pipeline readouts for LEE011 in advanced breast cancer, BAF312 in SPMS and AMG 334 in episodic migraine. We are continuing to invest for the future, as we manage the Gleevec loss of exclusivity in 2016 and 2017."
Read the full media release (PDF 0.1 MB) [2]
[1] Growth Products are defined on page 2. Biopharmaceuticals are defined on page 3.
[2] Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 46 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.
[3] SPMS = secondary progressive multiple sclerosis.