Drug giant Novartis sees higher sales

Novartis expects higher sales and profitability this year, lifted by its broad range of drugs, and minimal disruption to its supply chain from the coronavirus outbreak in China.

Drug giant Novartis sees higher sales

Novartis expects higher sales and profitability this year, lifted by its broad range of drugs, and minimal disruption to its supply chain from the coronavirus outbreak in China.

The Swiss pharmaceutical giant said in October it plans to shed 320 jobs, more than half the workforce, at its Cork campus over the next three years.

The drugmaker’s upbeat outlook and quarterly results outshone the results from Pfizer and set the bar for rival Roche which is expected to report higher 2019 sales and profit today on Thursday.

Novartis shares rose 1% after the company said it would raise its dividend 4% and as boss Vas Narasimhan downplayed the threat of coronavirus disruptions.

China is one of Novartis’s fastest-growing markets and has research and development operations there but also obtains supplies of active pharmaceutical ingredients from Chinese suppliers.

After the coronavirus outbreak, Novartis asked Chinese staff to work from home until February 10 while suspending some business travel, but Mr Narasimhan said he expects the company to emerge unscathed thanks to sufficient supplies to ride out interruptions.

The head of generics unit Sandoz, Richard Saynor, said the company has evaluated its stocks of ingredients and concluded that it has an adequate buffer for now.

China accounts for more than $2bn (€1.8bn) in annual business for Novartis and last year produced double-digit growth including the launches of Cosentyx and Entresto, a drug Mr Narasimhan predicts could top $1bn in sales in China.

Novartis’s broad drugs portfolio, including treatments for cancer, arthritis, and rare diseases, helped the firm post fourth-quarter core net income of $2.9bn, up 13% in constant currencies, on revenue up 9% at $12.4bn.

The group is benefiting from a mix of products developed in-house, such as psoriasis medicine Cosentyx and heart failure remedy Entresto, as well as $2.1m per-patient gene therapy Zolgensma, acquired through a 2018 acquisition.

For 2020, Novartis expects net sales growth of up to high-single-digit percentages, with core operating income potentially rising even faster.

Overall, Cosentyx’s sales for the 12-month period rose 28% to $3.6bn,

Entresto was up 71% at $1.7bn and Zolgensma hit $361m after seven months on the market.

- Reuters and Irish Examiner

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