Novartis' beleaguered generic drugs business put up surprisingly strong sales numbers Tuesday, but Novartis stock fell on lower-than-expected overall revenue.
Waning sales have led the Swiss pharma giant to consider strategic alternatives for its generic drugs, which sell under the name Sandoz. But in the first quarter, Sandoz sales popped 8%, excluding the impact of exchange rates, and outperformed Novartis' innovative medicines business.
The company credited lower prior-year sales and normalizing Covid trends. More Sandoz drugs made their way to patients, with volume contributing 16 percentage points to growth despite an 8 percentage-point hit to sales prices, Novartis said in its earnings release.
On the stock market today, however, Novartis stock fell 1.6% to 88.96 The pharmaceutical stock is consolidating with a buy point at 95.27, according to MarketSmith.com.
Novartis Stock: Earnings Just Beat
During the first quarter, Novartis earned $1.46 a share on $12.53 billion in sales. Earnings just topped expectations by a penny. But sales were below the call from analysts polled by FactSet for $12.62 billion. On a year-over-year basis, earnings climbed 12% and sales rose 5% in constant currency.
Chief Executive Vas Narasimhan credited four key drugs for strong growth — arthritis medicine Cosentyx, heart-failure treatment Entresto, spinal muscular atrophy gene therapy Zolgensma and cancer drug Kisqali. He also noted a new organizational structure to focus on the company's innovative medicines business.
The restructuring will make "us more agile and competitive, enhancing patient and customer orientation, unlocking potential in our (research and development) pipeline and (drive) value-creation through operational efficiencies," he said in a written statement.
Further, Novartis guided to mid single-digit sales growth for the year. Novartis stock analysts' expected a roughly 3% increase to $53.35 billion. The company expects Sandoz sales to be flat with the innovative medicines business bringing in mid single-digit growth.
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