Novartis shares rise after lifting 2019 profit outlook
Novartis shares rise as Swiss drugmaker lifts 2019 profit outlook
ZURICH (Reuters) – Swiss drugmaker Novartis raised its 2019 profit target on Wednesday, striking an upbeat tone over a legal fight with peer and partner Amgen and on the safety of a key gene therapy that could win approval next month.
Its shares rose 2.8 percent by 0837 GMT.
Chief Executive Vas Narasimhan said he now sees 2019 core operating income growing at a high-single-digit percentage rate, up from the previous forecast of mid- to high-single-digit percentage growth. Sales are seen growing at the mid-single-digit rate, helped by heart failure drug Entresto and psoriasis medicine Cosentyx.
Cosentyx is Novartis’s top seller after first-quarter sales rose 41 percent to $791 million, while Entresto sales jumped 85 percent to $357 million.
“Taken together, we’re really well positioned for growth,” Narasimhan told reporters on a call.
Two additional pillars of Narasimhan’s growth plans are Zolgensma, the gene therapy for rare spinal muscular atrophy (SMA), and Aimovig, the migraine drug on which Novartis has partnered with Amgen.
Asked about two deaths of babies in Zolgensma trials, including one in Europe in January that investigators deemed “possibly related to treatment”, Narasimhan said he did not anticipate an impact on the timing of the U.S. Food and Drug Administration approval decision, due by May 31.
The baby may have had pneumonia when it received a Zolgensma infusion, he said, and was diagnosed with five separate viral infections 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 said. “That does not mean the investigational agent actually contributed.”
A U.S. drug review group this month recommended Zolgensma should be priced below the $4-5 million level Novartis has pegged as the gene therapy’s value.
“We’ll of course take that into consideration,” Narasimhan said of the still-undisclosed price tag.
The 43-year-old Harvard-trained doctor said he is looking forward to taking on the Amgen dispute in court after the U.S. biotech sought to terminate the companies’ partnership on Aimovig, a potential blockbuster, this year.
The dispute centers on Novartis’s Sandoz unit’s contract manufacturing deal with Alder Biopharmaceuticals to help produce an Aimovig rival, eptinezumab, which on Tuesday was accepted for FDA review.
“We hope to come to some sort of conclusion with respect to this in the coming years,” Narasimhan said. “But in the meantime, it’s business as usual.”
Novartis reported first-quarter core net income rose 13 percent to $2.81 billion, compared to the $2.76 billion average estimate in a poll.
Sales excluding eyecare business Alcon, spun off to shareholders this month, rose 7 percent to $11.1 billion, compared to the $10.9 billion poll average.
Reporting by John Miller; Editing by Michael Shields and Alexandra Hudson