Novartis 2Q Profits Are Expected to Flatline -- Earnings Preview
14 July 2017 - 8:22PM
Dow Jones News
Novartis AG reports its second-quarter results on Tuesday.
Here's what to expect.
EARNINGS: Analysts surveyed by FactSet expect Novartis to report
that net income flatlined at $1.83 billion, compared with the $1.81
billion posted a year earlier.
REVENUE: Novartis is expected to say sales fell 1.7% to $12.26
billion.
WHAT TO WATCH:
ALCON: In January, CEO Joe Jimenez said he was considering a
spin-off or sale of the company's ailing eyecare unit Alcon amid
frustrated efforts to turn that business around. He promised a
decision by the end of the year.
GLEEVEC PATENT CLIFF: Declining sales of Novartis's one-time
blockbuster cancer drug Gleevec, which now faces competition from
cheaper versions, will dent overall sales and profit in the second
quarter.
CAR-T: The unanimous backing of Novartis's first-of-its kind
cell therapy for an aggressive form of leukemia by a panel of
experts has made the treatment's eventual approval by the FDA
agency almost certain. Now, investors' minds will turn to how the
drug maker will price its breakthrough therapy.
NEW DRUGS: Novartis is plowing heavy investment into the
launches of two key new drugs. Cosentyx, for psoriasis and other
inflammatory conditions, is now its fastest-growing product.
Entresto for heart failure has taken longer to ramp up, but
management holds out hope that it will become a multi-billion
dollar drug.
ACZ885: Novartis recently learned that a drug that it sells for
a number of rare diseases, under the brand name Ilaris, could also
be used to treat people who have suffered a heart attack. But
management has not yet signalled whether it will pursue marketing
approval for this much broader use, as doing so would require a big
price cut.
CURRENCY IMPACT: Novartis expects the strength of the dollar to
hurt its reported net sales by 2 percentage points, and its core
operating income by 3-4 percentage points in the second
quarter.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
July 14, 2017 06:07 ET (10:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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