(Updated with details, background, quotes and stock quotes)
FRANKFURT, Feb 2 (Reuters) – Novartis said on Wednesday it expects revenue and operating profit growth of around 5% this year as the Swiss pharmaceutical group is yet to make a decision. regarding a possible sale of its generic drugs subsidiary Sandoz. The group discussed in October the possibility of parting ways with Sandoz, after years of restructuring, as pricing pressure intensifies in the off-patent medicines sector.
In its press release on quarterly results, Novartis reaffirmed that it wants to take stock of the subject by the end of 2022. The group is studying the possibility of both selling or keeping the generics business.
Several media have reported that private equity firms have shown particular interest. Novartis Managing Director Vas Narasimhan himself indicated that the asset is attracting interest from various suitors.
All options are still under consideration, he told a news conference on Wednesday.
“We don’t have a bias for either option at this time. We are in the process of finalizing the carve-out financial statements to provide to relevant parties and we will see what proposals will come back,” he said.
DISAPPOINTING FORECASTS
During the quarter ended December 31, Novartis reported a 9% increase in its so-called “core” operating profit, to 3.8 billion dollars (3.37 billion euros), the increase sales of drugs having compensated for the increase in marketing and development costs.
The Novartis title nevertheless fell by 2.58% at midday on the Zurich Stock Exchange, some analysts having judged the forecast of growth around 5% for turnover and operating profit this year slightly lower. below expectations.
Sales of Cosentyx, a drug for the treatment of arthritis and psoriasis, rose 13% to $1.24 billion (1.10 billion euros) but also came in slightly below analysts’ expectations which averaged $1.3 billion, according to Refinitiv data.
Revenues from the Entresto treatment, used in patients with heart failure, jumped 34% to $949 million, in line with market consensus.
For the Sandoz division, the group forecasts a turnover largely in line with that recorded in 2021, i.e. 2.5 billion dollars, and an operating result down between 1% and 5%.
Novartis said that despite its program targeting up to $15 billion in share buybacks by the end of 2023, it would retain sufficient purchasing power to fund the buyout of companies and technologies, its own efforts to search for and payment of attractive dividends.
For 2021, the company has proposed to increase its dividend by 3.3% to 3.10 Swiss francs per share.
(Report Ludwig Burger; French version Dagmarah Mackos, edited by Blandine Hénault)