Novartis exceeded analyst expectations in the third quarter, driven primarily by the strong U.S. sales of Cosentyx, as well as the robust performances of Kesimpta and Kisqali.
Novartis released its third-quarter financial report Tuesday, touting a 10% year-over-year growth in net sales and again lifting its full-year earnings outlook, buoyed by the strong performance of its prescription medicines.
The Swiss multinational brought in more than $12.8 billion in net sales for the quarter, beating consensus forecast by 1%. Core earnings-per-share (EPS) was 2.06, coming in 6% ahead of analyst estimates and representing a 20% jump from the same period last year. Novartis’ third-quarter net income was nearly $3.2 billion, with free cash flow of almost $6 billion.
Jefferies analyst Peter Welford in an investor note attributed Novartis’ Q3 performance to the anti-IL-17A antibody Cosentyx (secukinumab), which is indicated for psoriasis, ankylosing spondylitis and psoriatic arthritis. Cosentyx surged 28% in the quarter to earn $1.7 billion, beating the consensus projection by 7%.
Novartis also highlighted its heart failure therapy Entresto (sacubitril/valsartan) as a key growth driver in the third quarter, with $1.86 in net sales and a 26% year-over-year growth. Welford, however, called the drug’s performance “a big Entresto miss,” falling short of analyst forecasts by 2%. Other drivers for Novartis include the breast cancer therapy Kisqali (ribociclib) and the multiple sclerosis medication Kesimpta (ofatumumab).
Pluvicto (lutetium (177Lu) vipivotide tetraxetan), Novartis’ targeted prostate cancer therapy, grew 50% year-over-year to bring in $386 million in the quarter, though this calculation benefited from a one-time revenue adjustment in Europe. Without this adjustment, Pluvicto would have seen a 36% bump in sales, which according to a trader interviewed by Reuters falls short of expectations.
Novartis is down around 3% in Tuesday morning trading, in response to its Q3 results.
Still, the pharma appears to be optimistic about its business for the remainder of the year. As in the first two quarters of 2024, Novartis on Tuesday again lifted its forecast for its net sales, which it now expects to grow in the low-double-digit range, whereas previous guidance pegged growth from the high single to low double digits. Novartis now anticipates core operating income growth in the high teens range.
As for its pipeline, Novartis announced on Tuesday that it will need a longer follow-up time to determine the appropriate regulatory path forward for its BET inhibitor pelabresib. The drug candidate joined the Novartis fold in February 2024 when the pharma bought MorphoSys for $2.9 billion. Novartis is trialing pelabresib, in combination with Jakafi (ruxolitinib), in the Phase III MANIFEST-2 study for myelofibrosis. In conjunction with this acquisition, Novartis took an $800 million impairment in the third quarter.
