(Reuters) – Novartis on Tuesday raised its full-year earnings forecast on strong drug sales and mapped out the planned spin-off and stock market debut of its generic medicines division Sandoz for early October.
The Swiss drugmaker said in a statement it expected group core operating income to grow by a “low double-digit” percentage in 2023, up from high single-digit growth previously projected.
Novartis shareholders will vote on the proposed Sandoz spin-off and complete separation at an extraordinary general meeting on Sept. 15.
A listing on the SIX Swiss Exchange, combined with an American Depositary Receipt programme in the United States, would follow early the following month, said Chief Financial Officer Harry Kirsch.
Second-quarter group sales rose 7% to $13.6 billion, above an analyst consensus of $13.2 billion, Refinitiv Eikon data showed, while adjusted operating profit increased 9% to $4.67 billion, surpassing a consensus of about $4.3 billion.
Gains were driven by better-than-expected sales of heart failure drug Entresto, up 37% in local currencies at $1.52 billion. Novartis is in a legal battle with generic drugmakers seeking to launch cheaper copies ahead of an anticipated end to Entresto’s patent protection in 2025.
Kesimpta, a new once-a-month injection against multiple sclerosis, also beat expectations with quarterly revenues more than doubling to $489 million.
Sales of newly launched Pluvicto, a radiotherapy against prostate cancer, came in at $240 million after a manufacturing facility upgrade in New Jersey helped to overcome production shortages.
“It’s really a broad-based growth on the whole portfolio,” CFO Kirsch said on a media call.
Sandoz, which analysts have said accounts for slightly over 10% of the group’s value, would have a “low-to-mid single-digit” billion dollar amount in net financial debt, consistent with a “BBB” investment grade credit rating, Kirsch added.
The Swiss pharma major is also initiating a previously flagged share buyback programme worth up to $15 billion to be completed by year-end 2025, following the completion its previous share buyback in June 2023.
