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Novartis' (NVS) Strong Portfolio, Pipeline to Fuel Growth in 2024
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Novartis (NVS - Free Report) is now a pure-play pharmaceutical company, following the spin-off of its generic division, Sandoz, in 2023.
Backed by a diverse portfolio and a deep pipeline, prospects look encouraging for this pharma giant in 2024.
In November 2023, the company raised its sales and operating income goals and now targets sales to grow by 5% on a compound annual growth rate basis from 2022 to 2027, up from the previous target of 4%. Its core operating income margin is expected to be around approximately 40% by 2027, driven by the continued strong momentum of key growth drivers.
The company also outlined the progress made in delivering its pure-play strategy, focused on four core therapeutic areas (Cardiovascular-Renal-Metabolic, Immunology, Neuroscience, Oncology) and two plus three technology platforms (Chemistry, Biotherapeutics, xRNA, Radioligand, Gene & Cell Therapy) in four priority geographies (United States, China, Germany, Japan).
Novartis had earlier spun off its eye care division, Alcon. With both Alcon and Sandoz's separation, the company is now focused on its pharmaceutical business and has made good progress in advancing its portfolio and pipeline.
Resources have been streamlined to maximize focus and enhance competencies. The robust and streamlined portfolio now comprises 103 projects, with up to 15 key submissions for regulatory approval expected in the 2024-2027 timeframe.
Key growth drivers include blockbuster oncology drugs Kisqali and Pluvicto and multiple sclerosis drug Kesimpta. The drugs put up a stellar performance in 2023 and the momentum is expected to continue. The company recently received approval from the FDA for commercial manufacturing of Pluvicto at its new large-scale, state-of-the-art radioligand therapy manufacturing facility in Indianapolis.
Shares of Novartis have risen 13.5% in the past three months compared with the industry’s 7.3% growth.
Image Source: Zacks Investment Research
Last month, the FDA approved iptacopan as the first oral monotherapy for the treatment of adults with paroxysmal nocturnal hemoglobinuria under the brand name Fabhalta.
Meanwhile, Novartis is on the lookout for strategic acquisitions to bolster its portfolio. Earlier in 2023, Novartis acquired Chinook Therapeutics for $3.5 billion to strengthen its renal pipeline. The acquisition added two late-stage candidates, atrasentan and zigakibart, for the treatment of immunoglobulin A nephropathy to NVS’ pipeline.
Last week, it was reported that Novartis is in advance talks to buy Cytokinetics, Incorporated (CYTK - Free Report) , which has a promising late-stage cardiovascular drug, aficamten, in its pipeline. However, Novartis backed out of the same. A potential acquisition of Cytokinetics would have expanded NVS’ cardiovascular portfolio, which comprises the blockbuster drug Entresto.
Novartis has also streamlined its pharma business. It divested its “front of eye” ophthalmology assets to Bausch + Lomb, a global eye health company, for $2.5 billion in 2023.
The deal included Xiidra, a treatment for the signs and symptoms of dry eye disease and investigational medicine SAF312 (libvatrep), which is in development as a first-in-class therapy for chronic ocular surface pain, as well as the AcuStream delivery device in dry eye indications and OJL332 in pre-clinical development.
NVS is making efforts to return value to its shareholders through buybacks and dividends. It repurchased $30 billion in shares through 2018-2023 and announced a new buyback plan in July 2023 for $15 billion.
Strong performance of key drugs, a deep pipeline and a streamlined focus should help NVS maintain momentum amid competition.
In the past 60 days, estimates for Novo Nordisk’s 2023 earnings per share have increased from $2.62 to $2.63. During the same period, the earnings estimate for 2024 has risen from $3.07 to $3.12. Shares of NVO have surged 50.8% in the past year.
Novo Nordisk’s earnings beat estimates in two of the last four quarters, while meeting the mark on one occasion and missing on the remaining occasion. The company witnessed an average surprise of 0.58%. In the previously reported quarter, Novo Nordisk’s earnings beat estimates by 5.80%.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.57 per share to $43.66. REGN’s stock has gained 28.7% in the past year. The company beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.
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Novartis' (NVS) Strong Portfolio, Pipeline to Fuel Growth in 2024
Novartis (NVS - Free Report) is now a pure-play pharmaceutical company, following the spin-off of its generic division, Sandoz, in 2023.
Backed by a diverse portfolio and a deep pipeline, prospects look encouraging for this pharma giant in 2024.
In November 2023, the company raised its sales and operating income goals and now targets sales to grow by 5% on a compound annual growth rate basis from 2022 to 2027, up from the previous target of 4%. Its core operating income margin is expected to be around approximately 40% by 2027, driven by the continued strong momentum of key growth drivers.
The company also outlined the progress made in delivering its pure-play strategy, focused on four core therapeutic areas (Cardiovascular-Renal-Metabolic, Immunology, Neuroscience, Oncology) and two plus three technology platforms (Chemistry, Biotherapeutics, xRNA, Radioligand, Gene & Cell Therapy) in four priority geographies (United States, China, Germany, Japan).
Novartis had earlier spun off its eye care division, Alcon. With both Alcon and Sandoz's separation, the company is now focused on its pharmaceutical business and has made good progress in advancing its portfolio and pipeline.
Resources have been streamlined to maximize focus and enhance competencies. The robust and streamlined portfolio now comprises 103 projects, with up to 15 key submissions for regulatory approval expected in the 2024-2027 timeframe.
Key growth drivers include blockbuster oncology drugs Kisqali and Pluvicto and multiple sclerosis drug Kesimpta. The drugs put up a stellar performance in 2023 and the momentum is expected to continue. The company recently received approval from the FDA for commercial manufacturing of Pluvicto at its new large-scale, state-of-the-art radioligand therapy manufacturing facility in Indianapolis.
Shares of Novartis have risen 13.5% in the past three months compared with the industry’s 7.3% growth.
Image Source: Zacks Investment Research
Last month, the FDA approved iptacopan as the first oral monotherapy for the treatment of adults with paroxysmal nocturnal hemoglobinuria under the brand name Fabhalta.
Meanwhile, Novartis is on the lookout for strategic acquisitions to bolster its portfolio. Earlier in 2023, Novartis acquired Chinook Therapeutics for $3.5 billion to strengthen its renal pipeline. The acquisition added two late-stage candidates, atrasentan and zigakibart, for the treatment of immunoglobulin A nephropathy to NVS’ pipeline.
Last week, it was reported that Novartis is in advance talks to buy Cytokinetics, Incorporated (CYTK - Free Report) , which has a promising late-stage cardiovascular drug, aficamten, in its pipeline. However, Novartis backed out of the same. A potential acquisition of Cytokinetics would have expanded NVS’ cardiovascular portfolio, which comprises the blockbuster drug Entresto.
Novartis has also streamlined its pharma business. It divested its “front of eye” ophthalmology assets to Bausch + Lomb, a global eye health company, for $2.5 billion in 2023.
The deal included Xiidra, a treatment for the signs and symptoms of dry eye disease and investigational medicine SAF312 (libvatrep), which is in development as a first-in-class therapy for chronic ocular surface pain, as well as the AcuStream delivery device in dry eye indications and OJL332 in pre-clinical development.
NVS is making efforts to return value to its shareholders through buybacks and dividends. It repurchased $30 billion in shares through 2018-2023 and announced a new buyback plan in July 2023 for $15 billion.
Strong performance of key drugs, a deep pipeline and a streamlined focus should help NVS maintain momentum amid competition.
Zacks Rank & Other Stocks to Consider
Novartis currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the overall healthcare sector are Novo Nordisk (NVO - Free Report) and Regeneron Pharmaceuticals (REGN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Novo Nordisk’s 2023 earnings per share have increased from $2.62 to $2.63. During the same period, the earnings estimate for 2024 has risen from $3.07 to $3.12. Shares of NVO have surged 50.8% in the past year.
Novo Nordisk’s earnings beat estimates in two of the last four quarters, while meeting the mark on one occasion and missing on the remaining occasion. The company witnessed an average surprise of 0.58%. In the previously reported quarter, Novo Nordisk’s earnings beat estimates by 5.80%.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.57 per share to $43.66. REGN’s stock has gained 28.7% in the past year. The company beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.