Both Novartis and Sandoz released their latest financial reports Tuesday morning, marking the first quarterly earnings produced since the long-awaited spinoff was completed earlier this month.
As part of its pivot to a “pure-play” innovative medicines business, Novartis reported that sales grew 12% year-over-year at constant currencies (CC). Meanwhile, Novartis’ core operating income swelled 21% at CC thanks to the strong growth from Kesimpta, Entresto and Kisqali, among other products.
The Swiss pharma giant’s net income rose 37% at CC during the quarter while its earnings per share rose 29% to $1.74. The company’s free cash flow from continuing operations also ballooned 24% to just over $5 billion.
The most significant development for Novartis during the quarter was its shareholders approving of the plan to spin off Sandoz. A few weeks after that decision, Sandoz listed on the SIX Swiss Exchange.
Novartis added that in relation to the Sandoz spinoff, the company will report a one-time non-cash, non-taxable IFRS gain of approximately $5.9 billion in its next quarterly earnings report.
Looking ahead, Novartis raised its full-year core operating income and said it expects its net sales to grow by a high single-digit while core operating income grows to the mid-to-high teens.
“Novartis delivered a very strong quarter, with double-digit sales and core operating income growth leading to a further upgrade to 2023 guidance. We have successfully executed the spin-off of Sandoz, allowing us to fully focus on high-value innovative medicines,” Novartis CEO Vas Narasimhan, MD said in a statement. “Our growth drivers, including Kesimpta, Entresto, Kisqali and Pluvicto, continue to perform well in the market. Our robust pipeline also continues to deliver, and we have achieved important innovation milestones for Pluvicto, iptacopan, remibrutinib and Lutathera. We are confident in our mid-term growth outlook and remain committed to creating value for our shareholders.”
As for its ongoing $15 billion share buyback, the drugmaker plans to have the process completed by the end of 2025.
Novartis released its financials just weeks after announcing iptacopan (LNP023), its pill for a rare kidney disease, led to significantly lower protein levels among patients in a late-stage trial, setting up a potential regulatory filing next year.
Meanwhile, Sandoz achieved $7.1 billion in net sales year-to-date, marking a 6% increase at CC.
While buoyed by a strong performance in its generics division, Sandoz reported double-digit growth out of its biosimilars segment.
Aside from the Novartis separation, there were a series of strategic milestones that the company considered highlights of Q3. These included the launch of Hyrimoz, a treatment for psoriatic arthritis, approval from the Food and Drug Administration for Tyruko and the closing of the Mycamine acquisition.
Sandoz also confirmed its full-year financial guidance, with net sales expected to grow by mid-single-digit at CC as well as a core EBITDA margin in the range of around 18% to 19%.
“Sandoz achieved strong sales growth year-to-date, driven primarily by volume growth in both our generics and biosimilars,” Sandoz CEO Richard Saynor said in a statement. “We made significant advances on several key biosimilars and are investing to drive long-term growth and deliver on our purpose of pioneering access for patients. With the spin-off successfully completed on October 4, 2023, we are excited to enter a new era as the standalone global leader and European champion.”