Novartis shares under heavy pressure after disappointing figures
Published: Wednesday, Jan 31st 2024, 09:40
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Novartis shares fell sharply in early trading on Wednesday. The pharmaceutical group missed analysts' expectations at all levels with the figures for the fourth quarter presented this morning. The operating profit margin, for example, was almost 2 percentage points below the AWP consensus.
At 9.20 a.m., Novartis fell by 4.6 percent to 88.32 francs, with the low for the day even lower at 87.68 francs. The year-to-date gain of 9.1 percent is thus more or less halved. The overall market (SMI) is also down 0.5 percent due to Novartis.
The Basler Group increased Group sales in the fourth quarter compared to the previous year despite negative currency effects. However, some analysts had hoped for double-digit percentage growth. In retrospect, this is now proving to be too optimistic.
Among the most important medicines, the cardiac drug Entresto sold slightly better than expected overall. Preparations such as Zolgensma, Lutathera and Pluvicto, on the other hand, contributed less than expected to quarterly sales. Analysts were particularly disappointed by the decline in sales of the MS drug Gilenya.
Analysts had also hoped for more from the financial targets for this year. The guidance for the 2024 financial year is slightly below consensus at turnover level, according to Zürcher Kantonalbank, for example. At core EBIT level, it is even "somewhat disappointing". According to JPMorgan, analysts are likely to lower their estimates for this key figure by 2 to 4 percent in the current year.
ZKB also sees the delay in the submission of the KRAS inhibitor opnurasib and the discontinuation of the development of the Sjögren's indication with remibrutinib as negative factors for sentiment, as well as the fact that sabatolimab failed to meet the primary endpoint in a Phase III trial.
Bank Vontobel is somewhat more gracious in its assessment. It says that the fourth quarter did not look as strong as expected. However, this can be explained by the somewhat higher costs in the fourth quarter, as usual, as well as the unexpectedly strong currency effect. Overall, the final quarter can still be regarded as solid.
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