Novartis Beats on Q3 Earnings and Sales, Raises 2024 Outlook

Swiss pharma giant Novartis AG NVS reported better-than-expected results for the third quarter of 2024. Core earnings (excluding one-time charges) of $2.06 per share beat the Zacks Consensus Estimate of $1.94    and were up from $1.74 reported a year ago. The year-over-year growth was driven by an increase in sales.Revenues of $12.8 billion climbed 9% from the year-ago figure. On a constant currency basis, sales increased 10%, driven by the momentum in Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto and Leqvio. The top line beat the Zacks Consensus Estimate of $12.6 billion.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Shares of Novartis have risen 14.6% year to date compared with the industry’s growth of 17.1%.Image Source: Zacks Investment ResearchPerformance of Top NVS DrugsAll growth rates mentioned below are on a year-over-year basis and at constant exchange rates.In October 2023, Novartis completed the spin-off of its generic and biosimilar unit, Sandoz, following which the latter became an independent company. The results of the Sandoz division and selected portions of corporate activities attributable to the Sandoz business are reported as discontinued operations.With the successful spin-off of the Sandoz business, Novartis operates as a single global operating segment. It is now concentrating on four core therapeutic areas — cardiovascular- renal-metabolic, immunology, neuroscience and oncology.Cardiovascular drug Entresto’s sales rose 26% from the year-ago level to $1.86 billion. The increase was driven by robust demand-led growth, with increased penetration in the United States and Europe following guideline-directed medical therapy in heart failure, as well as in China with increased penetration in hypertension. Entresto’s sales, however, missed the Zacks Consensus Estimate of $1.89 billion and our model estimate of $1.91 billion.Cosentyx’s sales (psoriasis, spondylitis and arthritis) increased 28% to $1.7 billion, which beat the Zacks Consensus Estimate of $1.5 billion and our model estimate of $1.45 billion. Sales were driven by recent launches, including the hidradenitis suppurativa indication (HS) and the intravenous formulation (IV) in the United States, and volume growth in core indications.Kesimpta (multiple sclerosis) sales totaled $838 million, up 28% on increased demand. Kesimpta sales missed the Zacks Consensus Estimate of $839 million and our model estimate of $846 million.Kisqali’s (breast cancer) stellar performance continued, with sales soaring 43% to $787 million. Sales grew strongly across all regions, based on increasing recognition of consistently reported overall survival in HR+/HER2- advanced breast cancer.However, Kisqali sales missed the Zacks Consensus Estimate of $796 million and our model estimate of $825 million.Strong performances by Jakavi (up 18% to $500 million) and Tafinlar + Mekinist (up 12% to $534 million) also boosted the top line.Pluvicto (prostate cancer) raked in sales of $386 million, up 50% on solid growth in the United States and Europe. Novartis received approval for Pluvicto's expanded manufacturing capacity at Millburn, NJ. With an unconstrained supply of Pluvicto at present, the company is now focused on initiating new patients. Sales beat the Zacks Consensus Estimate of $371 million and our estimate of $374 million.Scemblix sales surged 72% to $182 million, driven by its strong launch uptake in chronic myelogenous leukemia.Leqvio sales skyrocketed 119% to $198 million on steady growth in demand.Ilaris sales came in at $372 million, which increased 12% year over year on improved sales in the United States and Europe.Xolair (asthma and allergies) sales grew 15% year over year to $418 million, driven mainly by emerging growth markets and Europe. Novartis has a collaboration agreement with Roche (RHHBY) for Xolair. Novartis and Roche co-promote Xolair in the United States.Luthathera (cancer) sales totaled $190 million, up 19%, driven by growth in sales across all regions due to increased demand and earlier line adoption (within indication) in the United States and Japan.Gene-therapy Zolgensma (spinal muscular atrophy) sales of $308 million were up 1%. Sales missed the Zacks Consensus Estimate of $317 million and our model estimate of $338.7 million.Promacta sales totaled $569 million, which remained flat year over year. Tasigna sales declined 9% to $419 million.The core operating income margin was 40.1%, up from 37.4% in the year-ago quarter, driven by higher net sales.NVS Raises 2024 GuidanceBased on strong momentum, Novartis now expects net sales to grow low double-digit (previous guidance: from high single to low double-digit).Core operating income is now expected to grow in high teens (previous guidance: from mid to high teens).The guidance assumes no generic competition for Tasigna, Entresto and Promacta in the United States in 2024.Novartis AG Price, Consensus and EPS Surprise Novartis AG price-consensus-eps-surprise-chart | Novartis AG QuoteKey Updates From NVSKisqali obtained FDA approval for a broad indication for HR+/HER2- stage II and III early breast cancer (eBC) at high risk of recurrence, approximately doubling the population eligible for CDK4/6 inhibitor adjuvant therapy, with the inclusion of those without nodal involvement. The CHMP also issued a positive opinion for Kisqali in eBC.The FDA granted accelerated approval to Fabhalta for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk of rapid disease progression.The FDA granted Priority Review status to Scemblix for the treatment of adult patients with newly diagnosed Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase.Our Take Novartis’ performance in the third quarter was impressive. The increase in guidance was also positive, indicating strong momentum across all key drugs in the upcoming quarters. The label expansion of Cosentyx for HS and IV formulation drove the drug’s growth during the reported quarter.The pipeline progress is encouraging as well. The approval of Kisqali for eBC should further fuel sales of this drug, which has been boosting the top line. Approval of new drugs and label expansion of existing drugs should enable the company offset the adverse impacts from generic competition of Tasigna, Promacta and Entresto (mid-2025).NVS is now focused on strengthening its core pharmaceutical business with strategic acquisitions and deals. Earlier, Novartis acquired MorphoSys AG. The acquisition added pelabresib (late-stage BET inhibitor for myelofibrosis) and tulmimetostat (early-stage dual EZH2 and EZH1 inhibitor for solid tumors or lymphomas) to NVS’ pipeline.  The MorphoSys acquisition should further expand its oncology pipeline.NVS Rank and Other Stocks to ConsiderNovartis currently carries a Zacks Rank #2 (Buy). Some other top-ranked pharma stocks are Bayer BAYRY and AstraZeneca AZN, which carry a Zacks Rank #2 each.Estimates for Bayer’s 2024 earnings per share (EPS) have increased from $1.35 to $1.38 over the past 90 days, while the same for 2025 has risen from $1.42 to $1.44. Bayer’s shares have lost 23.2% year to date. AstraZeneca’s EPS estimates have risen from $4.04 to $4.07 per share for 2024 over the past 90 days, while that for 2025 has risen from $4.71 to $4.72. AstraZeneca’s shares have risen 12.8% year to date.AstraZeneca’S earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 4.74%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report Novartis AG (NVS): Free Stock Analysis Report Bayer Aktiengesellschaft (BAYRY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks