Sales of Novartis drugs for heart failure, psoriasis and multiple sclerosis were stronger over the first three months of the year than anticipated, helping the Swiss pharmaceutical company report first quarter earnings Tuesday that beat Wall Street forecasts.
The drugmaker also raised its sales guidance for the year and now expects growth of high single to low double digits. Shares rose by as much as 4.5% in Tuesday morning trading on the New York Stock Exchange.
Novartis’ top-selling drugs Entresto and Cosentyx drove the beat, combining to bring in more than $3.2 billion in first quarter sales. Demand for the former has grown following new treatment guidelines for heart failure, while expansion of the latter into inflammatory conditions beyond psoriasis has helped boost uptake.
Growth for those and other top drugs will continue this year, giving Novartis “confidence” to upgrade its guidance, said company CEO Vas Narasimhan on a conference call with analysts.
Overall, company sales were $11.8 billion in the first quarter, up 10% from the same period one year ago and ahead of consensus forecasts.
Peter Welford, an analyst at Jefferies, called Novartis’ outlook hike a “significant positive surprise” in a Tuesday note to clients, while Stifel analyst Eric Le Berrigaud described it as an “impressive start” to 2024.
Novartis is only six months removed from spinning out its generic drug unit Sandoz into a standalone company — one of the final pieces in Narasimhan’s yearslong plan to focus Novartis on high-margin prescription medicines. At the same time, Novartis has trimmed its drug pipeline to put more resources toward new types of medicines like radiopharmaceuticals.
The company currently sells two such medicines: Pluvicto for prostate cancer and Lutathera for a certain kind of neuroendocrine tumor. First quarter sales were $310 million and $169 million, respectively.
Novartis had planned last year to ask the Food and Drug Administration to expand approval of the former, but delayed the request following mixed clinical trial results. The company now says it has updated data that will support an approval application for Pluvicto’s use treating metastatic prostate cancer ahead of drugs known as taxanes.
Sales of another cancer drug, Kisqali, grew in the first quarter, too, but slower than some analysts had expected. Novartis recently paused enrollment into some Kisqali studies to tweak the drug’s manufacturing.
Also on Tuesday, Novartis disclosed that Giovanni Caforio, the former CEO of Bristol Myers Squibb, would succeed Joerg Reinhardt as chair of the company’s board.
