Novartis AG raised its profit forecast for a third time in the drugmaker’s first report after spinning off its Sandoz generics business.
Operating profit excluding some items will likely grow by a mid- to high-teens percentage this year, the Swiss company said on Tuesday. Demand for new medicines Kesimpta and Kisqali buoyed earnings last quarter.
Novartis’s boost comes in contrast to a more muted outlook last week from crosstown rival Roche Holding AG. Both pharmaceutical giants are facing challenges as investors seek assurance of their growth potential.
Novartis has been narrowing its focus on innovative medicines with the highest profit potential, and the Sandoz spinoff is only the last in a series of steps in that direction. Key for investors is the outlook beyond this year, with competition from copycats looming for the company’s biggest product, the heart drug Entresto, according to Bloomberg Intelligence.
It was a “very good quarter with better-than-expected performance of almost all products,” Laurent Flamme, an analyst with Zuercher Kantonalbank, wrote in a note to investors.
Core net income rose 18% to $3.59 billion last quarter, beating analysts’ estimates.
Novartis shares were little changed in early Zurich trading. The stock has gained 6.7% so far this year, outshining both Roche and the Bloomberg index that tracks European pharma companies.
Pluvicto, a targeted radiotherapy for cancer, saw revenue more than triple. The drug more than doubled the average time before patients’ prostate cancer got worse or they died in a study presented Monday at a medical meeting in Madrid. Whether it extends lives remains unclear.
Novartis had previously predicted that, without Sandoz, core operating profit would rise in the low double digits to mid-teens this year. The sales forecast remains unchanged with an expected gain in the high single digits.
--With assistance from Allegra Catelli.
(Updates with analyst comment in the fifth paragraph, shares in seventh. A previous version of the story corrected the reporting currency.)
