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Novartis AG (NVS - Free Report) reported disappointing fourth-quarter 2021 results as the Sandoz business continues to affect its performance.
Core earnings (excluding one-time charges) of $1.40 per share missed the Zacks Consensus Estimate of $1.44 but increased from $1.34 reported in the year-ago quarter.
Revenues of $13.2 billion also missed the Zacks Consensus Estimate of $13.5 billion. Nevertheless, sales were up 4% from the year-ago quarter, driven by momentum in key brands including Cosentyx, Entresto, and Zolgensma, the oncology portfolio, and the launch of Kesimpta, which continues to grow.
In the trailing 12 months, shares of Novartis have lost 1.3% against the industry’s 18.6% rise.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Quarter in Detail
Swiss pharma giant Novartis operates under two segments — Innovative Medicines and Sandoz (generics).
The Innovative Medicines division recorded sales of $10.7 billion, up 7% year over year. Within this segment, the Pharmaceuticals business unit grew 9% from the prior-year figure, driven by the strong growth of Entresto, Cosentyx, Kesimpta and Zolgensma.
Cosentyx sales increased 13% from the prior-year quarter to $1.2 billion, driven by sustained underlying demand across indications in the United States and Europe and strong volume growth in China. Entresto sales surged 34% from the year-ago quarter to $949 million owing to increased patient share across the markets served. Increasing contribution from Zolgensma (gene therapy for spinal muscular atrophy) also boosted this business unit, with a sales surge of 36% from the prior-year period to $342 million. Kesimpta sales came in at $147 million.
The Oncology business unit sales were up 3% from the year-ago period, fueled by strong performance of Promacta/Revolade (up 12% to $518 million), Tafinlar + Mekinist (up 14% to $458 million), Jakavi (up 12% to $408 million) and Kisqali (up 58% to $285 million).
Sales in the Sandoz division were $2.5 billion, up 2% year over year as sales in Europe grew 4%, offset by an 8% decline in the United States. Global sales of Biopharmaceuticals grew 11% from a year ago. Volume growth in Biopharmaceutical was partly offset by negative pricing impacts.
Full-Year Results
Sales came in at $51.6 billion, up 4% year over year, driven by Entresto, Zolgensma, Kisqali and Cosentyx. The same, however, missed the Zacks Consensus Estimate of $52.3 billion. Core EPS of $6.29 marginally missed the Zacks Consensus Estimate of $6.31.
2022 Guidance
Novartis expects net sales for 2021 to grow in mid-single digits. While Innovative Medicines revenues are projected to grow in mid-single digits, revenues from Sandoz are expected to grow broadly in line with the prior-year level.
Key Pipeline Updates
During the quarter under review, Novartis received new approval for several drugs across multiple indications.
Following the FDA nod in December, Leqvio became the first and only small interfering RNA therapy for reducing low-density lipoprotein cholesterol (or bad cholesterol), while Cosentyx became the first biologic treatment for active enthesitis-related arthritis (ERA) and active juvenile psoriatic arthritis (JPsA) in children and adolescents. Novartis also made regulatory submissions in Europe for Cosentyx in ERA & JPsA indications.
Last October, the FDA approved Scemblix for the treatment of two distinct indications in chronic myeloid leukemia.
Other Updates
While Novartis is still evaluating whether to retain or sell its Sandoz business, it expects to provide an update on the same by the end of this year.
In December, Novartis announced that it had completed the sale of 53.3 million bearer shares in Roche Holding AG (RHHBY - Free Report) for $20.7 billion. The sale, which constituted nearly 33% of Roche’s outstanding bearer shares, was a bilateral transaction between the company and RHHBY. Novartis has been a shareholder of Roche Holding AG since May 2001.
Using the proceeds received from the sale of a stake in Roche, Novartis initiated a share buyback program of up to $15 billion.
Novartis AG currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Eli Lilly (LLY - Free Report) and Pfizer (PFE - Free Report) . While Pfizer sports a Zacks Rank #1 (Strong Buy), Eli Lilly currently carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pfizer’s earnings per share estimates for 2022 have increased from $5.66 to $6.41 in the past 60 days. Shares of Pfizer have risen 52.3% in the past year.
Earnings of Pfizer missed estimates in three of the last four quarters while beating the mark in one, delivering a surprise of 10.9%, on average.
Eli Lilly’s earnings per share estimates for 2022 have increased from $8.42 to $8.45 in the past 30 days. Shares of Eli Lilly have risen 26.1% in the past year.
Earnings of Eli Lilly missed estimates in three of the last four quarters while beating the mark in one, delivering a surprise of 0.5%, on average.
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Novartis (NVS) Q4 Earnings & Sales Miss, Sandoz Review Ongoing
Novartis AG (NVS - Free Report) reported disappointing fourth-quarter 2021 results as the Sandoz business continues to affect its performance.
Core earnings (excluding one-time charges) of $1.40 per share missed the Zacks Consensus Estimate of $1.44 but increased from $1.34 reported in the year-ago quarter.
Revenues of $13.2 billion also missed the Zacks Consensus Estimate of $13.5 billion. Nevertheless, sales were up 4% from the year-ago quarter, driven by momentum in key brands including Cosentyx, Entresto, and Zolgensma, the oncology portfolio, and the launch of Kesimpta, which continues to grow.
In the trailing 12 months, shares of Novartis have lost 1.3% against the industry’s 18.6% rise.
All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Quarter in Detail
Swiss pharma giant Novartis operates under two segments — Innovative Medicines and Sandoz (generics).
The Innovative Medicines division recorded sales of $10.7 billion, up 7% year over year. Within this segment, the Pharmaceuticals business unit grew 9% from the prior-year figure, driven by the strong growth of Entresto, Cosentyx, Kesimpta and Zolgensma.
Cosentyx sales increased 13% from the prior-year quarter to $1.2 billion, driven by sustained underlying demand across indications in the United States and Europe and strong volume growth in China. Entresto sales surged 34% from the year-ago quarter to $949 million owing to increased patient share across the markets served. Increasing contribution from Zolgensma (gene therapy for spinal muscular atrophy) also boosted this business unit, with a sales surge of 36% from the prior-year period to $342 million. Kesimpta sales came in at $147 million.
The Oncology business unit sales were up 3% from the year-ago period, fueled by strong performance of Promacta/Revolade (up 12% to $518 million), Tafinlar + Mekinist (up 14% to $458 million), Jakavi (up 12% to $408 million) and Kisqali (up 58% to $285 million).
Sales in the Sandoz division were $2.5 billion, up 2% year over year as sales in Europe grew 4%, offset by an 8% decline in the United States. Global sales of Biopharmaceuticals grew 11% from a year ago. Volume growth in Biopharmaceutical was partly offset by negative pricing impacts.
Full-Year Results
Sales came in at $51.6 billion, up 4% year over year, driven by Entresto, Zolgensma, Kisqali and Cosentyx. The same, however, missed the Zacks Consensus Estimate of $52.3 billion. Core EPS of $6.29 marginally missed the Zacks Consensus Estimate of $6.31.
2022 Guidance
Novartis expects net sales for 2021 to grow in mid-single digits. While Innovative Medicines revenues are projected to grow in mid-single digits, revenues from Sandoz are expected to grow broadly in line with the prior-year level.
Key Pipeline Updates
During the quarter under review, Novartis received new approval for several drugs across multiple indications.
Following the FDA nod in December, Leqvio became the first and only small interfering RNA therapy for reducing low-density lipoprotein cholesterol (or bad cholesterol), while Cosentyx became the first biologic treatment for active enthesitis-related arthritis (ERA) and active juvenile psoriatic arthritis (JPsA) in children and adolescents. Novartis also made regulatory submissions in Europe for Cosentyx in ERA & JPsA indications.
Last October, the FDA approved Scemblix for the treatment of two distinct indications in chronic myeloid leukemia.
Other Updates
While Novartis is still evaluating whether to retain or sell its Sandoz business, it expects to provide an update on the same by the end of this year.
In December, Novartis announced that it had completed the sale of 53.3 million bearer shares in Roche Holding AG (RHHBY - Free Report) for $20.7 billion. The sale, which constituted nearly 33% of Roche’s outstanding bearer shares, was a bilateral transaction between the company and RHHBY. Novartis has been a shareholder of Roche Holding AG since May 2001.
Using the proceeds received from the sale of a stake in Roche, Novartis initiated a share buyback program of up to $15 billion.
Novartis AG Price
Novartis AG price | Novartis AG Quote
Zacks Rank & Stocks to Consider
Novartis AG currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Eli Lilly (LLY - Free Report) and Pfizer (PFE - Free Report) . While Pfizer sports a Zacks Rank #1 (Strong Buy), Eli Lilly currently carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pfizer’s earnings per share estimates for 2022 have increased from $5.66 to $6.41 in the past 60 days. Shares of Pfizer have risen 52.3% in the past year.
Earnings of Pfizer missed estimates in three of the last four quarters while beating the mark in one, delivering a surprise of 10.9%, on average.
Eli Lilly’s earnings per share estimates for 2022 have increased from $8.42 to $8.45 in the past 30 days. Shares of Eli Lilly have risen 26.1% in the past year.
Earnings of Eli Lilly missed estimates in three of the last four quarters while beating the mark in one, delivering a surprise of 0.5%, on average.