Earnings growth targeted
Roche deal floods Novartis coffers
2/2/2022, 8:55 am
Novartis reports a solid fiscal year. In healthcare, the Swiss are observing a normalization despite the ongoing corona pandemic. In many cases, sales of cancer drugs picked up again. The company sees itself on course.
The Swiss pharmaceutical company Novartis has tripled its profit thanks to the sale of its multi-billion dollar Roche stake. In the end, more than 24 billion euros remained in the till, as the company announced. Shareholders are to receive CHF 3.10 per share certificate. In the current year, the group from Basel intends to increase sales and adjusted operating profit. “Our market growth drivers continue to perform well in all regions and strengthen our confidence in our medium to long-term growth prospects,” said CEO Vasant Narasimhan.
Meanwhile, there is nothing new about the strategic review of the generics subsidiary Sandoz. A decision should be made by the end of the year, with all options on the table – from remaining in the group to a separation. There is currently no trend towards one of the options, said the Novartis boss. The group put Sandoz to the test in October. Analysts assume that Novartis will sell the division or take it public. Sandoz accounts for a fifth of Novartis annual sales, but lags behind the dominant patent drug business in terms of profitability.
Last year, Novartis earned $51.6 billion, six percent more. Adjusted operating income rose eight percent to $16.6 billion. Novartis thus met its own requirements. After the restrictions to contain the coronavirus pandemic were eased in many countries, business with cancer drugs, for example, picked up speed in the second half of the year. In addition, healthcare operations returned to normal after patients were reluctant to visit the doctor and undergo surgery at the beginning of the year and hospitals had ordered fewer.
The engines of growth were the drug Cosentyx for psoriasis – the top-selling drug with sales of 4.7 billion dollars – and the heart drug Entresto. Novartis had recently raised the sales forecast for the two drugs. Zolgensma gene therapy for the treatment of muscle wasting contributed 1.4 billion sales revenue thanks to expanded access in Europe and emerging markets. The most expensive drug in the world, costing a good two million dollars per single dose, is used to treat the hereditary disease spinal muscular atrophy (SMA) in young children, which is usually fatal.