Swiss pharmaceutical giant Novartis has revised its full-year guidance upward following a robust first-quarter performance, driven by the growing popularity of its psoriasis and arthritis drug Cosentyx.
In a statement released on Tuesday, Novartis announced that it expects its net sales for 2024 to grow by a high-single to low double-digit percentage, with adjusted operating income projected to increase by a low double-digit to mid-teens percentage. This is a significant upgrade from its previous forecast, which anticipated “mid single-digit” sales growth and “high single-digit” percentage growth in adjusted operating income.
Cosentyx, which recently received approval for treating hidradenitis suppurativa—a painful and scarring acne-like skin condition—has witnessed rapid uptake in the U.S. and Europe. The introduction of a new intravenous infusion option for Cosentyx has also contributed to increased demand, according to Novartis’ finance chief, Harry Kirsch.
“We’d been expecting a strong quarter from Novartis to kick off first-quarter European pharma reporting, and that’s precisely what we saw this morning,” noted analysts from Barclays in a research note.
Novartis reported a 16% rise in quarterly adjusted operating income to $4.54 billion, surpassing the average analyst estimate of approximately $4.3 billion. Revenue climbed 10% to $11.83 billion, outperforming expectations.
Aside from Cosentyx, other key growth drivers for Novartis in the quarter included heart failure drug Entresto and multiple sclerosis drug Kesimpta. Despite Entresto facing patent expiration next year, it continues to contribute significantly to the company’s revenue.
In addition to its strong financial performance, Novartis announced leadership changes, with former Bristol Myers Squibb (BMS) CEO Giovanni Caforio set to become the chairman of the board of directors at the company’s 2025 annual shareholders meeting. Current chairman Joerg Reinhardt will not seek re-election after serving 12 years, in line with the group’s tenure limits.
CEO Vas Narasimhan’s strategic focus has shifted towards drug development and deal-making. Novartis recently agreed to pay up to $1.01 billion for an experimental prostate cancer drug by Arvinas and completed a 2.7 billion euro ($2.9 billion) acquisition of cancer treatment developer MorphoSys in February.
Novartis’ finance chief, Kirsch, indicated that the company continues to seek deals valued at less than $5 billion that align with its preferred therapeutic focus areas.
With its strong performance and strategic initiatives, Novartis is well-positioned to capitalize on the growing demand for its innovative pharmaceutical products and further solidify its position as a global leader in healthcare.