Novartis Raises Sales Outlook for Mid-Term, Acquires Kate Therapeutics

Novartis NVS announced that it has increased its sales guidance for the mid-term. The company now expects total sales to witness a compound annual growth rate (CAGR) of 6% during 2023-2028 compared with the previous estimate of 5%.The rise in guidance was due to the strong momentum of NVS’ key drugs and its upcoming launches.Shares of Novartis have risen 4% year to date compared with the industry’s growth of 4.8%.Image Source: Zacks Investment ResearchNVS Raises Mid-Term OutlookFor 2024-2029, sales are expected to witness a CAGR of 5%. NVS stated that it remains on track to deliver core operating income margin of 40%+ by 2027, benefiting from continued strong sales growth and productivity improvements.The rise in the mid-term outlook was driven by an increase in peak sales estimates for Cosentyx, Kisqali, Kesimpta, Pluvicto and Leqvio.NVS expects strong momentum in its business with eight key drugs anticipated to generate $3-$8 billion in peak sales. The company projects 15 submission-enabling readouts in the coming years to further bolster its growth profile.In the long term, NVS has identified more than 30 assets in the pipeline to support mid-single-digit growth after 2029.NVS Acquires Kate TherapeuticsWhile organic growth continues to drive business, NVS is also focused on strategic bolt-in acquisitions to strengthen its pipeline.Novartis has acquired Kate Therapeutics to strengthen its portflio of gene therapies.  Per the terms of the agreement, Kate Therapeutics’ shareholders are entitled to receive up to $1.1 billion, comprising a cash payment that was paid at the closing of the transaction and additional amounts payable on achievement of specified milestones.Kate Therapeutics is a San Diego-based, preclinical-stage biotechnology company focused on developing adeno-associated virus (AAV)- based gene therapies to treat genetically defined neuromuscular diseases. The primary programs include preclinical candidates for Duchenne muscular dystrophy, facioscapulohumeral dystrophy and myotonic dystrophy type 1.NVS Collaborates With Ratio TherapeuticsNovartis also entered into an exclusive worldwide license and collaboration agreement with Ratio Therapeutics Inc. for a next-generation SSTR2-targeting radiotherapeutic candidate, which adds to the company’s deep radioligand therapy pipeline.Ratio will collaborate with Novartis to drive preclinical activities to research and select an SSTR2-targeting development candidate. On the other hand, Novartis will assume responsibility for all remaining development, manufacturing and commercialization activities. Per the terms of the agreement, Ratio will receive combined upfront and potential milestone payments of up to $745 million. It is also eligible to receive tiered royalty payments.NVS’ Efforts to Expand BusinessNovartis’ performance in the third quarter was impressive, with both earnings and sales beating estimates. The increase in annual guidance was another positive, indicating strong momentum across all key drugs in the upcoming quarters.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.NVS is 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. NVS’ Zacks Rank & Stocks to ConsiderNVS currently carries a Zacks Rank #3 (Hold).A couple of better-ranked stocks in the pharma/biotech sector are Pfizer PFE and Gilead Sciences GILD, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Over the past 60 days, Pfizer’s earnings estimates have risen from $2.62 to $2.91 per share for 2024, while that for 2025 has increased from $2.85 to $2.92. PFE’s shares have lost 12.2% year to date.Pfizer’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 74.50%.Over the past 60 days, Gilead Sciences’ earnings estimates for 2024 have risen from $3.79 to $4.28 per share, while those for 2025 have increased from $7.24 to $7.40.Gilead Sciences’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 15.46%. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want 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 Novartis AG (NVS): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Gilead Sciences, Inc. (GILD): 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