Novartis on Wednesday (February 1) predicted that core operating income would grow in a “mid single digit” percentage range in 2023 following stagnation last year, as the Swiss drugmaker prepares to spin off its Sandoz generics business.
Full-year core operating income was broadly flat at $16.7 billion, it said in a statement, coming in slightly below market expectations of $16.8 billion.
Adjusted for overall negative currency effects, group sales in 2022 advanced 4 per cent to $50.5 billion as gains from heart failure drug Entresto and multiple sclerosis (MS) drug Kesimpta were partly offset by competition from cheap generic copies of established MS drug Gilenya.
Novartis said it was on track to spin off its generics unit Sandoz in the second half of the year as part of its effort to sharpen its focus on its patented prescription medicines.
Analysts have welcomed a programme unveiled in 2022 to trim costs and cut 8,000 jobs and plans to focus on fewer therapy areas and drug technologies. But the market has been underwhelmed by prospects for medium-term growth from new drugs.
Credit Suisse analysts said that best-selling psoriasis and arthritis drug Cosentyx fell short of estimates as the company cited retroactive price cuts under the U.S. Medicaid programme for low-income households.
They were also disappointed by guidance for Sandoz’s core operating income to decline by a “low double digit” percentage in 2023 due to cost inflation and investments to make it a stand-alone entity.