Novartis delivered another strong quarter with double digit sales
growth and core1 margin expansion; 2019 sales and profit guidance
raised; Beovu launched in US
- Continuing operations2 net sales up
13% (cc1, +10% USD) driven by:
- Cosentyx sales of USD 937 million (+27% cc), with strong demand
across indications and regions
- Entresto USD 430 million (+61% cc), with increased demand in
hospital and ambulatory settings
- Zolgensma sales of USD 160 million, strong launch including
broad access
- Lutathera sales grew to USD 119 million, total AAA sales were
USD 177 million
- Piqray sales were USD 43 million, off to a strong start in the
US
- Sandoz sales grew 5% (cc, +3% USD), mainly driven by
Biopharmaceuticals
- Core operating income grew 18% (cc, +15% USD) and
Innovative Medicines core margin improved to 34.1% of sales, mainly
driven by sales momentum and productivity, while funding growth
investments
- Net income from continuing operations was USD 2.0
billion, up 12% (cc, +8% USD)
- Free cash flow1 grew 26% to USD 4.0 billion, mainly
driven by higher cash flows from operating activities
- Significant innovation
milestones:
- Beovu (brolucizumab) launched in the US in October for
treatment of neovascular (wet) AMD, differentiated based on greater
fluid reduction and potential for fewer injections
- Ofatumumab treatment for RMS showed compelling efficacy across
all major clinical endpoints in two pivotal Phase III trials.
Rolling regulatory submissions planned to start in
Q4
- Cosentyx met primary endpoints in nr-axSpA at weeks 16 and 52
(PREVENT study); submitted to EMA, FDA submission planned for Q4
- Kisqali showed overall survival (OS) benefit in postmenopausal
women (MONALEESA-3), and is now the only CDK4/6 to show an OS
benefit in two trials and in pre and post-menopausal women
- Entresto PARAGON showed clinically important benefit in HFpEF
subpopulations, planned to submit to FDA in Q4 for inclusion of
data in the label
- 2019 guidance increased for new focused medicines
company3 - sales expected to grow high single
digit (cc), core operating income expected to grow mid to high
teens (cc)
Basel, October 22, 2019 —
Commenting on the results, Vas Narasimhan, CEO of Novartis,
said:
“Novartis continued its excellent performance
this quarter with double digit increases in sales and core
operating income with growing margins. We increased our full year
sales and core operating income guidance with growth continuing in
both Innovative Medicines and Sandoz. Zolgensma and Piqray
launched with strong momentum and Beovu just launched with a
clearly differentiated label. We also continue our innovation
performance with a number of positive milestones highlighted by
Ofatumumab’s remarkable efficacy in RMS with the potential to be
the first self-administered, subcutaneous, B-cell therapy.”
|
Continuing operations2 |
|
Key
figures1 |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
sales |
12 172 |
11 016 |
10 |
13 |
|
35 042 |
33 270 |
5 |
9 |
Operating
income |
2 358 |
2 239 |
5 |
9 |
|
7 263 |
7 041 |
3 |
10 |
Net
income |
2 041 |
1 882 |
8 |
12 |
|
6 018 |
11 580 |
-48 |
-45 |
EPS
(USD) |
0.90 |
0.81 |
11 |
14 |
|
2.62 |
4.99 |
-47 |
-44 |
Free cash
flow |
3 968 |
3 156 |
26 |
|
|
9 449 |
8 343 |
13 |
|
Core
operating income |
3 748 |
3 258 |
15 |
18 |
|
10 650 |
9 445 |
13 |
18 |
Core net
income |
3 212 |
2 820 |
14 |
17 |
|
9 119 |
8 239 |
11 |
16 |
Core EPS (USD) |
1.41 |
1.22 |
16 |
19 |
|
3.97 |
3.55 |
12 |
17 |
1Constant currencies (cc), core results and free
cash flow are non-IFRS measures. An explanation of non-IFRS
measures can be found on page 56 of the Condensed Interim Financial
Report. Unless otherwise noted, all growth rates in this Release
refer to same period in prior year. 2Refers to continuing
operations as defined on page 44 of the Condensed Interim Financial
Report, excludes Alcon, includes the businesses of Innovative
Medicines and Sandoz (including the US generic oral solids and
dermatology portfolio), as well as the continuing corporate
functions. 3 Removes Alcon and the Sandoz US dermatology and oral
solids portfolio from both 2019 and 2018. Forecast assumption that
no Gilenya generics enter in 2019 in the US.
Financials
In order to comply with International Financial
Reporting Standards (IFRS), Novartis has separated the Group’s
reported financial data for the current and prior years into
“continuing” and “discontinued” operations. The results of the
Alcon business are reported as discontinued operations. See page 44
and Notes 2, 3 and 11 in the Condensed Interim Financial Report for
a full
explanation. The
commentary below focuses on continuing operations including the
businesses of Innovative Medicines and Sandoz (including the US
generic oral solids and dermatology portfolio), as well as the
continuing Corporate functions. We also provide information on
discontinued operations.
Continuing operations third
quarter
Net sales were USD 12.2 billion (+10%, +13% cc)
in the third quarter driven by volume growth of 16 percentage
points (cc), mainly from Cosentyx, Entresto, Zolgensma and the
Xiidra acquisition. Strong volume growth was partly offset by the
negative impacts of pricing (-2 percentage points cc) and generic
competition (-1 percentage point cc).
Operating income was USD 2.4 billion (+5%, +9%
cc) mainly driven by higher sales and productivity, partly offset
by growth investments, lower divestments and higher
amortization.
Net income was USD 2.0 billion (+8%, +12% cc)
driven by higher operating income and higher income from associated
companies. EPS was USD 0.90 (+11%, +14% cc), growing faster than
net income driven by lower weighted average number of shares
outstanding.
Core operating income was USD 3.7 billion (+15%,
+18% cc) mainly driven by higher sales and productivity programs,
partly offset by growth investments. Core operating income margin
was 30.8% of net sales, increasing by 1.2 percentage points (+1.4
percentage points cc).
Core net income was USD 3.2 billion (+14%, +17%
cc) driven by growth in core operating income. Core EPS was USD
1.41 (+16%, +19% cc) growing faster than core net income driven by
lower weighted average number of shares outstanding.
Free cash flow from continuing operations
amounted to USD 4.0 billion (+26% USD) compared to USD 3.2 billion
in prior year, mainly driven by higher net cash flows from
operating activities.
Innovative Medicines net sales
were USD 9.7 billion (+13%, +15% cc) in the third quarter.
Pharmaceuticals BU sales grew 15% (cc), driven by continuing
momentum on Cosentyx and Entresto and the benefit from the first
full quarter of sales from Zolgensma and Xiidra. Oncology BU grew
14% (cc) driven by continuing momentum on Promacta/Revolade,
Tafinlar + Mekinist and Kisqali and the benefit from launches
including, Lutathera, Kymriah and Piqray. Volume contributed 17
percentage points to sales growth. Generic competition had a
negative impact of 1 percentage point. Net pricing had a negative
impact of 1 percentage point.
Sandoz net sales were USD 2.5
billion (+3%, +5% cc) driven by volume growth of 9 percentage
points (cc) partially offset by 4 percentage points (cc) of price
erosion. Excluding the US, net sales grew 7% (cc) driven by
Biopharmaceuticals in Europe. US sales were broadly in line with
prior year as the continued industry-wide pricing pressure was
mostly offset by first-to-market retail launches.
Novartis continues to expect the
previously-announced divestment of the Sandoz US oral solids and
dermatology portfolio to be completed in the coming months, pending
regulatory approval. Novartis remains fully committed to this
business until it is divested to Aurobindo. The results of this
business are included in continuing operations.
Continuing operations nine
months
Net sales were USD 35.0 billion (+5%, +9% cc) in
the first nine months driven by volume growth of 12 percentage
points (cc), mainly from Cosentyx, Entresto and Lutathera. Strong
volume growth was partly offset by the negative impacts of pricing
(-2 percentage points cc) and generic competition (-1 percentage
point cc).
Operating income was USD 7.3 billion (+3%, +10%
cc) mainly driven by higher sales, improved gross margin and
productivity programs, partly offset by growth investments, legal
provisions and higher restructuring charges.
Net income was USD 6.0 billion (-48%, -45% cc)
as prior year benefited from a USD 5.7 billion net gain recognized
from the sale of our stake in the GSK consumer healthcare joint
venture. EPS was USD 2.62 (-47%, -44% cc) benefitting from lower
weighted average number of shares outstanding.
Core operating income was USD 10.7 billion
(+13%, +18% cc) mainly driven by higher sales, improved gross
margin and productivity programs, partly offset by growth
investments. Core operating income margin was 30.4% of net sales,
increasing by 2.0 percentage points (+2.4 percentage points
cc).
Core net income was USD 9.1 billion (+11%, +16%
cc) driven by growth in core operating income partly offset by the
discontinuation of core income from the GSK consumer healthcare
joint venture. Core EPS was USD 3.97 (+12%, +17% cc) growing faster
than core net income driven by lower weighted average number of
shares outstanding.
Free cash flow from continuing operations
amounted to USD 9.4 billion (+13% USD) compared to USD 8.3 billion
in prior year. The increase is mainly driven by higher operating
income adjusted for non-cash items and higher real estate
divestment proceeds, partly offset by higher working capital, which
in prior year included the receipt of a GSK sales milestone from
the divested Vaccines business of USD 0.4 billion, and lower
dividends received from associated companies, as prior year
included the GSK consumer healthcare joint venture which was
divested in Q2 2018.
Innovative Medicines delivered
net sales of USD 27.8 billion (+7%, +11% cc) in the first nine
months. Pharmaceuticals BU grew 12% (cc) driven by Cosentyx
reaching USD 2.6 billion and Entresto USD 1.2 billion. Oncology BU
grew 11% (cc) driven by AAA including Lutathera, as well as
Promacta/Revolade, Tafinlar + Mekinist and Kisqali. Volume
contributed 13 percentage points to sales growth. Generic
competition had a negative impact of 1 percentage point. Net
pricing had a negative impact of 1 percentage point.
Sandoz net sales were USD 7.2
billion (-2%, +2% cc) driven by volume growth of 9 percentage
points (cc) partially offset by 7 percentage points (cc) of price
erosion, mainly in the US. Excluding the US, net sales grew 6%
(cc). Global sales of Biopharmaceuticals grew 18% (cc), driven by
continued strong double-digit growth in Europe from Hyrimoz
(adalimumab), Rixathon (rituximab), and Erelzi (etanercept).
Discontinued operations
Discontinued operations include the business of Alcon and certain
Corporate costs directly attributable to Alcon up to the spin-off
date. As the Alcon spin-off was completed on April 9, 2019, there
were no operating results in the third quarter of 2019.
Discontinued operations net sales in the first
nine months of 2019 were USD 1.8 billion compared to USD 5.4
billion in 2018 and operating income amounted to USD 71 million
compared to an operating loss of USD 171 million in 2018. Net
income from discontinued operations in the first nine months of
2019 amounted to USD 4.6 billion compared to a net loss of USD 160
million in 2018 driven by the non-taxable non-cash net gain on
distribution of Alcon Inc. to Novartis AG shareholders which
amounted to USD 4.7 billion. For further details see Note 3 of the
Condensed Interim Financial Report, “Significant transactions –
Completion of the spin-off of the Alcon business through a dividend
in kind distribution to Novartis AG shareholders”.
Total Group third quarter
For the total Group, net income amounted to USD
2.0 billion compared to USD 1.6 billion in prior year, and basic
earnings per share was USD 0.90 compared to USD 0.70 in prior year.
Cash flow from operating activities for the total Group amounted to
USD 4.6 billion and free cash flow to USD 4.0 billion.
Total Group nine months
For the total Group, net income amounted to USD
10.6 billion compared to USD 11.4 billion in prior year, and basic
earnings per share was USD 4.62 compared to USD 4.92 in prior year.
Cash flow from operating activities for the total Group amounted to
USD 10.1 billion and free cash flow to USD 9.4 billion.
Key growth drivers (Q3
performance)
Underpinning our financial results in the third
quarter is a continued focus on key growth drivers including:
- Cosentyx (USD 937 million, +27% cc) continued
momentum in the US (+31%) and in the rest of the world (+20% cc),
driven by strong demand across indications and regions and strong
first line access in all three indications.
- Entresto (USD 430 million, +61%
cc) continued strong momentum fueled by increased demand in
both hospital and ambulatory settings across regions.
- Zolgensma (USD 160 million) since its US
launch, Zolgensma has been used to treat patients ranging in age
from less than one month to two years old including all types of
SMA. To date plans are in place covering ~90% of commercial
patients and ~30% of Medicaid patients.
- Lutathera (USD 119 million, +116% cc)
continued to grow led by the US, with over 160 centers actively
treating patients, and ongoing launches in EU. Sales from all AAA
brands were USD 177 million.
- Promacta/Revolade (USD 380 million, +31% cc)
continued to grow at a strong double-digit rate across all regions
driven by increased use in chronic immune thrombocytopenia (ITP)
and further uptake as first-line treatment for severe aplastic
anemia (SAA) in the US and Japan.
- Tafinlar + Mekinist (USD 345 million, +22% cc)
continued strong double-digit growth due to demand in metastatic
and adjuvant melanoma as well as NSCLC, with ongoing uptake of the
adjuvant melanoma indication in Europe.
- Jakavi (USD 279 million, +17% cc) continued
double-digit growth across all regions driven by demand in the
myelofibrosis and polycythemia vera indications.
- Kisqali (USD 123 million, +76% cc) showed
strong growth driven by use in metastatic breast cancer patients,
independent of menopausal status or combination partner.
- Piqray (USD 43 million) US launch progressed
well. Piqray is the first and only treatment for patients with a
PIK3CA mutation in HR+/HER2- advanced breast cancer.
- Kymriah (USD 79 million) strong demand
continued and sales increased primarily driven by ongoing uptake in
the US and Europe. There are over 160 qualified treatment centers
and more than 20 countries worldwide that have coverage for at
least one indication.
- Mayzent (USD 4 million) launch is progressing
and efforts are ongoing to improve patient on-boarding which was
slower due to the special needs of this population.
- Biopharmaceuticals (biosimilars,
biopharmaceutical contract manufacturing and Glatopa) Global sales
of Biopharmaceuticals grew 27% (cc), driven by continued strong
double-digit growth in Europe from Rixathon (rituximab), Hyrimoz
(adalimumab) and Erelzi (etanercept).
- Emerging Growth Markets, which comprise all
markets except the US, Canada, Western Europe, Japan, Australia and
New Zealand, sales grew 10% in cc (+7% in USD), mainly driven by
double digit growth (cc) in China.
Net sales of the top 20 Innovative
Medicines products in 9M 2019
|
Q3 2019 USD m |
% change |
9M 2019 USD m |
% change |
|
USD |
cc |
USD |
cc |
Cosentyx |
937 |
25 |
27 |
2 586 |
27 |
30 |
Gilenya |
829 |
1 |
3 |
2 420 |
-3 |
0 |
Lucentis |
500 |
2 |
5 |
1 569 |
3 |
8 |
Tasigna |
487 |
10 |
11 |
1 389 |
-1 |
2 |
Entresto |
430 |
59 |
61 |
1 208 |
70 |
75 |
Sandostatin |
388 |
0 |
1 |
1 183 |
0 |
2 |
Afinitor/Votubia |
400 |
7 |
8 |
1 174 |
1 |
4 |
Promacta/Revolade |
380 |
29 |
31 |
1 036 |
23 |
26 |
Tafinlar +
Mekinist |
345 |
19 |
22 |
982 |
17 |
22 |
Galvus
Group |
320 |
4 |
5 |
955 |
0 |
5 |
Gleevec/Glivec |
320 |
-16 |
-14 |
950 |
-20 |
-17 |
Xolair |
299 |
17 |
22 |
870 |
13 |
20 |
Jakavi |
279 |
13 |
17 |
821 |
14 |
21 |
Diovan
Group |
254 |
0 |
3 |
798 |
5 |
11 |
Exforge
Group |
249 |
-2 |
2 |
780 |
4 |
10 |
Exjade/Jadenu |
253 |
-4 |
-2 |
744 |
-8 |
-6 |
Votrient |
198 |
1 |
2 |
578 |
-8 |
-5 |
Ilaris |
177 |
26 |
27 |
493 |
24 |
28 |
Zortress/Certican |
122 |
2 |
5 |
362 |
5 |
10 |
Lutathera |
119 |
113 |
116 |
334 |
288 |
287 |
Top 20 products total |
7 286 |
10 |
13 |
21 232 |
8 |
12 |
Strengthen R&D - Key developments
from the third quarter
New approvals and regulatory
update
- Beovu (brolucizumab, formerly RTH258) was
launched in the US following FDA approval in October, offering
neovascular (wet) AMD patients vision gains and greater fluid
reductions vs aflibercept. Beovu demonstrated greater reductions in
central subfield thickness, a key indicator of fluid in the retina.
Beovu is the only anti-VEGF in wet AMD recommended to maintain
eligible patients on up to three-month dosing intervals immediately
after the loading phase with no compromise in efficacy.
- Entresto was approved by FDA for the treatment
of symptomatic heart failure with systemic left ventricular
systolic dysfunction in children aged 1 year and older.
- Gilenya was approved in China for relapsing
forms of multiple sclerosis (RMS) for adults and children 10 years
and older. MS is categorized as rare disease in China with an
estimated 30,000 patients.
Regulatory submissions and
filings
·Capmatinib
(INC280) was granted FDA Breakthrough Therapy Designation as a
first-line treatment for patients with metastatic MET exon14
skipping-mutated non-small cell lung cancer (NSCLC). Novartis plans
to file with FDA in Q4.
Results from ongoing trials and other
highlights
- Ofatumumab (OMB157) is a subcutaneous, potent,
fully-human monoclonal antibody targeting CD20 positive B-cells,
delivering remarkable efficacy with a favorable safety profile. RMS
patients on ofatumumab had a reduction in annualized relapse rate
of 50.5% (0.11 vs. 0.22) and 58.5% (0.10 vs. 0.25) compared to
teriflunomide in two head-to-head Phase III RMS studies (ASCLEPIOS
I and II). Ofatumumab also showed significant reductions in 3 and 6
month confirmed disability worsening and acute focal MRI activity
versus teriflunomide. These data will form the bases of rolling
submissions planned to start in Q4.
- Cosentyx PREVENT trial in patients with active
non-radiographic axial spondyloarthritis (nr-axSpA) met both
16-week and 52-week primary endpoints of ASAS40. Novartis has
submitted the data to EMA and plans to submit to the FDA. If
approved, Nr-axSpA would be the fourth indication
for Cosentyx.
- Kisqali MONALEESA-3 overall survival data were
presented at ESMO in postmenopausal women with HR+/HER2- advanced
breast cancer. This follows positive OS data from MONALEESA-7 in
pre-menopausal women presented at ASCO in June. OS benefit proven
with multiple combination partners and the largest number of
patients, including post-, pre- and peri-menopausal patients.
- QVM149 and QMF149 positive Phase III results
announced showing statistically significant improvement in lung
function. Filed with EMA in Q2 2019 and in Japan in Q3 2019.
- Entresto data from PARAGON-HF trial in HFpEF
patients showed Entresto reduced the composite primary endpoint of
total (first and recurrent) heart failure hospitalizations and CV
death by 13% versus valsartan, although narrowly missed statistical
significance. The full body of evidence from the trial
suggests that treatment with Entresto may result in clinically
important benefits in particular subgroups. We plan to submit to
FDA in Q4 for inclusion of data in the label. Results from PROVE-HF
trial show significant improvements in measures of cardiac
remodeling at six months and one year in HFrEF patients;
EVALUATE-HF results complement findings.
- Zolgensma new data were presented at EPNS
continuing to show significant therapeutic benefit in prolonging
event-free survival now up to 5 years of age in patients with SMA
type I. Data from the STRONG trial in SMA type II patients was
presented at WMS showing a mean increase of 5.9 points from
baseline in HFMSE scores in patients 2 to 5 years of age following
treatment with AVXS-101 IT, nearly double the clinically meaningful
threshold. Zolgensma is currently under regulatory review in Europe
with an anticipated CHMP decision in Q1 2020 and in Japan with
anticipated decision in H1 2020.
- Fevipiprant (QAW039) ZEAL 1 and 2 trials did
not meet the primary efficacy endpoint of FEV1 improvement in
moderate asthmatic patients. The safety profile was confirmed as
clean and placebo like. LUSTER 1 and
2 exacerbation trials in moderate to
severe asthmatic patients are the core registration
trials and are on track to read out in Q1 2020.
- Mayzent new post hoc statistical analysis of
the pivotal EXPAND study at ECTRIMS showed that Mayzent can help
patients keep their mobility (i.e. reduced time to wheel-chair) for
over four years longer on average. Further analyses
demonstrate Mayzent significantly reduced grey matter volume loss
at one and two years, a key driver of disability progression and
cognitive decline in patients with SPMS.
- Aimovig data confirmed long-term efficacy and
safety for majority of patients with episodic migraine. 4.5-year
data show 77% of patients who continued on treatment experienced at
least a 50% reduction in monthly migraine days. Moreover, 33% of
patients who continued on treatment achieved a 100% reduction, and
56% achieved a 75% decrease.
- Sandoz biosimilar natalizumab
worldwide agreement with Polpharma Biologics gives Sandoz
commercialization rights for RRMS. Natalizumab is the fifth
proposed biosimilar in-licensed by Sandoz in the last year,
underscoring commitment to further grow pipeline through
collaborations.
Capital structure and net
debtRetaining a good balance between investment in the
business, a strong capital structure and attractive shareholder
returns remains a priority.
In Q3 2019, the up to USD 5 billion share
buyback was completed with a total of 55.8 million shares for USD
5.0 billion repurchased since the announcement in June 2018.
During the first nine months of 2019, Novartis
repurchased a total of 60.3 million shares for USD 5.4 billion on
the SIX Swiss Exchange second trading line, including 46.5 million
shares (USD 4.2 billion) bought back under the up to USD 5 billion
share buyback and 13.8 million shares (USD 1.1 billion) to mitigate
dilution related to participation plans of associates. In addition,
1.7 million shares (USD 0.2 billion) were repurchased from
associates. In the same period, 15.4 million shares (for an equity
value of USD 0.9 billion) were delivered as a result of options
exercised and share deliveries related to participation plans of
associates. Consequently, the total number of shares outstanding
decreased by 46.6 million versus December 31, 2018. These treasury
share transactions resulted in a decrease in equity of USD 4.6
billion and a net cash outflow of USD 5.3 billion.
As of September 30, 2019, net debt increased by
USD 3.2 billion to USD 19.4 billion versus December 31, 2018. The
increase was mainly driven by the USD 6.6 billion annual dividend
payment, net cash outflow for treasury share transactions of USD
5.3 billion and M&A transactions of USD 3.8 billion (mainly the
Xiidra acquisition), partly offset by USD 9.4 billion free cash
flow from continuing operations during the nine months of 2019 and
USD 2.9 billion net inflows related to the Alcon spin-off.
As of Q3 2019, the long-term credit rating for
the company is A1 with Moody’s Investors Service and AA- with
S&P Global Ratings.
2019 Outlook
Barring unforeseen events
New focused medicines company
guidance Excluding Alcon and the Sandoz US oral solids and
dermatology business from both 2018 and 2019
- Net sales revised upwards: expected to grow
high-single digit (cc).
- From a divisional perspective, we expect net sales performance
(cc) in 2019 to be as follows:
- Innovative Medicines revised upwards: grow
high-single digit to low double digit
- Sandoz revised upwards: grow low-single
digit
- Core operating income revised
upwards: expected to grow mid to high-teens
(cc).
The guidance above includes the forecast
assumption that no Gilenya generics enter in 2019 in the US.
Foreign Exchange impactIf
mid-October exchange rates prevail for the remainder of 2019, the
currency impact for the year would be negative 3 percentage points
on net sales and negative 5 percentage points on core operating
income. The estimated impact of exchange rates on our results is
provided monthly on our website.
Nomination for election to the Board of
DirectorsThe Novartis Board of Directors announced today
that it is nominating Dr. Simon Moroney, for election to the Board
at the Annual General Meeting on February 28, 2020. Dr.
Moroney is one of the co-founders of the Germany-based
biotechnology company Morphosys and served as it’s CEO until
September 1, 2019. Prior to founding Morphosys, Dr.Moroney held
several senior academic positions at the University of Cambridge,
U.K., University of British Columbia, Canada and ETH in
Switzerland. He also worked at the Harvard Medical School in
the United States and was part of the team at US-based ImmunoGen
Inc that pioneered the first generation of anti-cancer antibody
conjugates. Dr. Moroney’s deep scientific knowledge as well as his
experience leading and building a biotechnology company will
strengthen the Board’s scientific leadership
expertise.
Continuing operations 1 |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
sales |
12 172 |
11 016 |
10 |
13 |
|
35 042 |
33 270 |
5 |
9 |
Operating
income |
2 358 |
2 239 |
5 |
9 |
|
7 263 |
7 041 |
3 |
10 |
As a % of sales |
19.4 |
20.3 |
|
|
|
20.7 |
21.2 |
|
|
Core
operating income |
3 748 |
3 258 |
15 |
18 |
|
10 650 |
9 445 |
13 |
18 |
As a % of sales |
30.8 |
29.6 |
|
|
|
30.4 |
28.4 |
|
|
Net
income |
2 041 |
1 882 |
8 |
12 |
|
6 018 |
11 580 |
-48 |
-45 |
EPS
(USD) |
0.90 |
0.81 |
11 |
14 |
|
2.62 |
4.99 |
-47 |
-44 |
Core net
income |
3 212 |
2 820 |
14 |
17 |
|
9 119 |
8 239 |
11 |
16 |
Core EPS
(USD) |
1.41 |
1.22 |
16 |
19 |
|
3.97 |
3.55 |
12 |
17 |
Cash
flows from operating activities |
4 562 |
3 720 |
23 |
|
|
10 007 |
9 613 |
4 |
|
Free cash flow |
3 968 |
3 156 |
26 |
|
|
9 449 |
8 343 |
13 |
|
Innovative Medicines |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
sales |
9 688 |
8 596 |
13 |
15 |
|
27 794 |
25 870 |
7 |
11 |
Operating
income |
2 404 |
2 184 |
10 |
13 |
|
7 077 |
6 571 |
8 |
14 |
As a % of sales |
24.8 |
25.4 |
|
|
|
25.5 |
25.4 |
|
|
Core
operating income |
3 300 |
2 897 |
14 |
16 |
|
9 528 |
8 382 |
14 |
19 |
As a % of sales |
34.1 |
33.7 |
|
|
|
34.3 |
32.4 |
|
|
Sandoz |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
sales |
2 484 |
2 420 |
3 |
5 |
|
7 248 |
7 400 |
-2 |
2 |
Operating
income |
191 |
358 |
-47 |
-42 |
|
746 |
1 095 |
-32 |
-25 |
As a % of sales |
7.7 |
14.8 |
|
|
|
10.3 |
14.8 |
|
|
Core
operating income |
615 |
541 |
14 |
18 |
|
1 577 |
1 520 |
4 |
10 |
As a % of sales |
24.8 |
22.4 |
|
|
|
21.8 |
20.5 |
|
|
Corporate |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Operating
loss |
-237 |
-303 |
22 |
21 |
|
-560 |
-625 |
10 |
8 |
Core operating loss |
-167 |
-180 |
7 |
6 |
|
-455 |
-457 |
0 |
-2 |
|
|
|
|
|
|
|
|
|
|
Discontinued operations 2 |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
sales |
|
1 763 |
|
|
|
1 777 |
5 361 |
nm |
nm |
Operating income / loss |
|
- 300 |
|
|
|
71 |
- 171 |
nm |
nm |
As a % of sales |
|
-17.0 |
|
|
|
4.0 |
-3.2 |
|
|
Core
operating income |
|
297 |
|
|
|
350 |
991 |
nm |
nm |
As a % of sales |
|
16.8 |
|
|
|
19.7 |
18.5 |
|
|
Net income / loss |
|
- 258 |
|
|
|
4 590 |
- 160 |
nm |
nm |
Total Group |
Q3 2019 |
Q3 2018 |
% change |
|
9M 2019 |
9M 2018 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net
income |
2 041 |
1 624 |
26 |
30 |
|
10 608 |
11 420 |
-7 |
-3 |
EPS
(USD) |
0.90 |
0.70 |
29 |
32 |
|
4.62 |
4.92 |
-6 |
-2 |
Core net
income |
3 212 |
3 064 |
5 |
7 |
|
9 397 |
9 057 |
4 |
9 |
Core EPS
(USD) |
1.41 |
1.32 |
7 |
9 |
|
4.09 |
3.90 |
5 |
10 |
Cash
flows from operating activities |
4 562 |
4 050 |
13 |
|
|
10 085 |
10 506 |
-4 |
|
Free cash flow |
3 968 |
3 301 |
20 |
|
|
9 387 |
8 778 |
7 |
|
nm = not
meaningful |
|
|
|
|
|
|
|
|
|
1
Continuing operations include the businesses of Innovative
Medicines and Sandoz Division including the US generic oral solids
and dermatology portfolio and Corporate activities. See page 44 of
the Condensed Interim Financial Report for full explanation |
2
Discontinued operations include the business of Alcon. Net income
of discontinued operations for 9M 2019 includes a USD 4.7 billion
gain on distribution of Alcon Inc. to Novartis AG shareholders. See
page 44 and Notes 2, 3 and 11 of the Condensed Interim Financial
Report for full explanation |
Detailed financial results accompanying
this press release are included in the Condensed Interim Financial
Report at the link
below:https://ml-eu.globenewswire.com/Resource/download/54b44cbc-188b-48a6-bf59-7a844c1bcd87/
Disclaimer
This press release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, that can generally be
identified by words such as “guidance,” “launched,” “launching,”
“strong start,” “momentum,” “growth investments,” “compelling,”
“submissions,” “starting,” “submitted,” “submission,” “planned,”
“focused,” “expected,” “to grow,” “continued,” “continuing,”
“continue,” “potential,” “growing,” “launches,” “continues,”
“expect,” “to be completed,” “pending,” “closing conditions,”
“committed,” “growth drivers,” “launch,” “to date,” “ongoing,”
“filings,” “Breakthrough Therapy Designation,” “delivering,”
“will,” “plans,” “to submit,” “suggests,” “may,” “would,”
“proposed,” “commitment,” “pipeline,” “priority,” “outlook,”
“unforeseen,” “forecast,” “enter,” “to deliver,” “priority review,”
“enrollment,” “filed,” “transformative,” “Orphan Drug designation,”
“upcoming,” “on track,” “future,” “strategy,” “Fast Track
designation,” “Orphan designation,” “Orphan status,” “resubmitted,”
“potentially,” “anticipated,” “as early as possible,” “PRIME
designation,” “Sakigake designation,” “underway,” “increasing,” “in
the coming months,” or similar expressions, or by express or
implied discussions regarding potential new products, potential new
indications for existing products, potential product launches, or
regarding potential future revenues from any such products; or
regarding the potential outcome, or financial or other impact on
Novartis, of the proposed divestiture of certain portions of our
Sandoz Division business in the US; or regarding the potential
impact of the completion of the up to USD 5 billion share buyback;
or regarding potential future sales or earnings of the Group or any
of its divisions or potential shareholder returns; or by
discussions of strategy, plans, expectations or intentions. Such
forward-looking statements are based on the current beliefs and
expectations of management regarding future events, and are subject
to significant known and unknown risks and uncertainties. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those set forth in the forward-looking statements.
You should not place undue reliance on these statements. In
particular, our expectations could be affected by, among other
things: global trends toward healthcare cost containment, including
ongoing government, payor and general public pricing and
reimbursement pressures and requirements for increased pricing
transparency; regulatory actions or delays or government regulation
generally, including potential regulatory actions or delays with
respect to the proposed transactions or the development of the
products described in this press release; the potential that the
proposed divestiture of certain portions of our Sandoz Division
business in the US may not be completed in the expected time frame,
or at all; the potential that the strategic benefits, synergies or
opportunities expected from the proposed divestiture of certain
portions of our Sandoz Division business in the US, and other
transactions described, may not be realized or may be more
difficult or take longer to realize than expected; the inherent
uncertainties involved in predicting shareholder returns; the
uncertainties inherent in the research and development of new
healthcare products, including clinical trial results and
additional analysis of existing clinical data; our ability to
obtain or maintain proprietary intellectual property protection,
including the ultimate extent of the impact on Novartis of the loss
of patent protection and exclusivity on key products that commenced
in prior years and will continue this year; safety, quality or
manufacturing issues; uncertainties involved in the development or
adoption of potentially transformational technologies and business
models; uncertainties regarding actual or potential legal
proceedings, including, among others, product liability litigation,
disputes and litigation with business partners or business
collaborators, government investigations generally, litigation and
investigations regarding sales and marketing practices, and
intellectual property disputes; our performance on environmental,
social and governance measures; general political, economic and
trade conditions, including uncertainties regarding the effects of
ongoing instability in various parts of the world; uncertainties
regarding future global exchange rates; uncertainties regarding
future demand for our products; uncertainties regarding potential
significant breaches of data security or data privacy, or
disruptions of our information technology systems; and other risks
and factors referred to in Novartis AG’s current Form 20-F on file
with the US Securities and Exchange Commission. Novartis is
providing the information in this press release as of this date and
does not undertake any obligation to update any forward-looking
statements as a result of new information, future events or
otherwise.
All product names appearing in italics are trademarks owned by
or licensed to Novartis Group companies.
About Novartis
Novartis is reimagining medicine to improve and
extend people’s lives. As a leading global medicines company, we
use innovative science and digital technologies to create
transformative treatments in areas of great medical need. In our
quest to find new medicines, we consistently rank among the world’s
top companies investing in research and development. Novartis
products reach more than 750 million people globally and we are
finding innovative ways to expand access to our latest treatments.
About 109,000 people of more than 140 nationalities work at
Novartis around the world. Find out more at. www.novartis.com
Novartis will conduct a conference call with
investors to discuss this news release today at 14:00 Central
European time and 8:00 Eastern Time. A simultaneous webcast of the
call for investors and other interested parties may be accessed by
visiting the Novartis website. A replay will be available after the
live webcast by
visiting.https://www.novartis.com/investors/event-calendar
Detailed financial results accompanying this
press release are included in the condensed interim financial
report at the link below. Additional information is provided on
Novartis divisions and pipeline of selected compounds in late stage
development and a copy of today's earnings call presentation can be
found at.https://www.novartis.com/investors/event-calendar
Important dates
December 5,
2019 R&D update
2019 – LondonJanuary 29,
2020
Fourth quarter and Full Year results 2019April 28,
2020
First quarter results 2020July 21,
2020
Second quarter results 2020October 27,
2020
Third quarter results 2020
Please find full media release in English attached and on the
following link: Media release (PDF)
Further language versions are available through the following
links:
German version is available through the following
link: Medienmitteilung (PDF)
French version is available through the following
link: Communiqué aux médias (PDF)