Novartis Clocks 4% Drop In Quarterly Sales, Once Again Perks Up Sandoz Earnings Outlook - Novartis (NYSE:NVS)

  • Novartis AG NVS has reported a core EPS of $1.58 in Q3 FY22 compared to $1.71 a year ago, beating the consensus of $1.57.
  • Net sales were $12.54 billion, down 4% Y/Y or up 4% at constant currency (CC), missing the consensus of $12.99 billion.
  • Operating income was $2.2 billion (-33%, -23% cc), mainly due to higher impairments ($0.5 billion) and higher restructuring costs ($0.4 billion).
  • Core net income reached $3.4 billion (-11%, -2% cc), as growth in core operating income was more than offset by the loss of Roche’s core income. 
  • Quarterly revenue from heart failure drug Entresto jumped 31% to $1.14 billion. Sales from the breast cancer drug, Kisqali, jumped 49% to $327 million based on increasing recognition of OS and quality of life benefits.
  • Last week, the U.S. Supreme Court rejected Novartis’ effort to block the launch of generic versions of its multiple sclerosis drug Gilenya.
  • Sales from Kesimpta for multiple sclerosis more than doubled to $289 million, mainly driven by the U.S. launch momentum.
  • Guidance: Novartis reiterates its FY22 guidance, with sales and core operating income to grow mid-single digits.
  • For Sandoz, NVS expects sales to grow low to mid-single digits. Core operating income is expected to grow low single digits, revised upwards from low single digits and broadly in line, respectively.
  • Price Action: NVS shares closed at $77.71 on Monday.

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