Novartis lifts annual profit outlook as Cosentyx, Entresto lead first-quarter sales growth

What the company said:

"Novartis is off to a strong start in 2019 with the Mayzent launch, successful Alcon spin-off and strong operational execution leading us to revise 2019 profit guidance upwards," remarked CEO Vas Narasimhan, adding "this quarter has been all about transformation for us."

The company noted that net income in the first quarter was hit by a net impairment charge and lower divestment gains, while sales in the Sandoz unit were negatively affected by 9 percentage points of price erosion mainly in the US. Novartis saidWednesday that Richard Saynor, the current senior vice president of classic and established products, commercial and digital platforms at GlaxoSmithKline, will become CEO of Sandoz effective no later than August 1.

Other results:

Oncology product sales: $3.3 billion, up 4 percent

Tasigna: $434 million, down 7 percent, with declines in the US

Gleevec/Glivec: $307 million, down 22 percent, hit by generic competition in most major markets

Promacta/Revolade: $307 million, up 19 percent, driven by increased use in chronic immune thrombocytopenia

Tafinlar/Mekinist: $297 million, up 11 percent, due to continued demand in metastatic melanoma and non-small-cell lung cancer, and strong uptake of the adjuvant melanoma indication in the US and Europe

Jakavi: $258 million, up 10 percent, boosted by the myelofibrosis and polycythaemia vera indications

Lutathera: $106 million, led by the US with over 120 centres actively treating, while the European launch is "progressing well"

Kisqali: $91 million, up 107 percent, driven by use in first-line metastatic breast cancer patients

Kymriah: $45 million, up 275 percent, led by new treatment sites in the EU

Cosentyx: $791 million, up 36 percent, due to "strong demand" across all indications, beating forecasts of $775 million

Gilenya: $766 million, down 7 percent, mainly as a result of "competitive pressures" in the US

Lucentis: $533 million, up 2 percent

Entresto: $357 million, up 79 percent, with growth across all regions

Biopharmaceuticals: $351 million, up 5 percent, driven by Europe with continued strong double-digit growth from Rixathon, Hyrimoz and Erelzi

Emerging growth markets: $2.8 billion, flat versus the prior year, despite double-digit growth in China

Looking ahead:

Novartis now expects operating income to grow in the high single digits on a constant currency basis in 2019, lifted from an earlier forecast of growth in the mid-to-high single digits. The company reaffirmed that sales this year are predicted to grow in the mid-single digits on a constant currency basis, excluding Alcon and the Sandoz US oral solids and dermatology business. Novartis indicated that the guidance assumes no generic competitor to Gilenya will enter the US market in 2019.

The FDA is shortly set to make a decision on Novartis' application seeking approval of the gene therapy Zolgensma (onasemnogene abeparvovec) for the treatment of spinal muscular atrophy Type 1. Narasimhan said that two deaths linked to the drug in clinical studies were unlikely to impact the timeline. Commenting on one death disclosed last month, the executive said the baby may have had pneumonia when it received Zolgensma infusion, before dying of respiratory sepsis. "When you can't definitively prove one thing or another, the investigator is required to say there could be a potential contribution" from Zolgensma, Narasimhan noted.

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