Novartis raises the bar again after a strong run
Published: Tuesday, Oct 29th 2024, 08:50
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The pharmaceutical group Novartis is unstoppable: For the third time this year, the Basel-based company is raising its forecasts. They have now raised their own targets every quarter since 2023.
As the Group announced on Tuesday, turnover in the third quarter amounted to 12.8 billion US dollars. This corresponds to an increase of 9 percent compared to the same period last year. At constant exchange rates (CER), growth amounted to 10 percent.
Both the somewhat newer drugs, such as the breast cancer drug Kisqali or the radioligand therapy Pluvicto, and the already established drugs Entresto (heart disease) and Cosentyx (psoriasis) contributed to this.
On the profit side, Novartis doubled its operating profit in the third quarter to USD 3.6 billion. Novartis attributes this to lower impairment charges and higher net sales. The bottom line was a net profit of 3.2 billion after 1.5 billion in the same period last year.
Focus on medium-term margin targets
However, analysts are primarily looking at the core operating profit adjusted for various factors. At 5.1 billion, this was better than analysts had forecast in advance.
Thanks to another strong quarter, Novartis management has once again raised its own targets for the year as a whole. At the same time, CEO Vas Narasimhan also reaffirmed the Group's medium-term targets. He remains confident that he will be able to achieve them.
The medium-term targets include a core operating profit margin above the 40 percent mark. In the third quarter, Novartis reported a figure in line with this target for the first time at 40.1%.
Outlook raised again
Meanwhile, growth in sales at constant exchange rates in the low double-digit percentage range (previously high single-digit to low double-digit percentage range) is now being targeted for the current year. Core operating profit is now expected to grow in the high teens. Previously, management was aiming for an increase in the mid to high teens.
In these forecasts, Novartis assumes that no copycats for the cancer drugs Tasigna and Promacta and the blockbuster Entresto will come onto the US market before mid-2025.
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