Novartis On Wednesday, it forecast core operating profit to grow in the ‘mid-single-digit’ percentage range in 2023, following last year’s slump, as the Swiss pharmaceutical company prepares to spin off Sandoz’s generics business. .
Core operating income for the full year was broadly flat at $16.7 billion, just below market expectations of $16.8 billion.
Adjusting for the overall negative currency effect, Group sales increased 4% to $50.5 billion in 2022.
Novartis CEO Vas Narasimhan told CNBC’s Jeff Cutmore that the company faced challenges in the first half of 2022, including hyperinflation and the continued impact of the coronavirus pandemic. rice field.
“Now we are seeing some of them starting to stabilize. It’s an important tailwind for a business like ours,” he said in an interview in Basel, Switzerland.
Novartis said in a statement that it plans to spin off its generic division Sandoz in the second half of this year as part of an effort to increase its focus on patented prescription drugs.
Analysts say a program announced in 2022 to cut costs and cut 8,000 jobs and plans announced late last year to focus on fewer therapeutic areas and drug technology have helped the share price. It is said that there is
However, the market is overwhelmed by medium-term growth prospects from new drugs. His stock has fallen about 11% since January 2020, trailing most of its rivals.
The market is betting on future sales growth from increased use of the breast cancer drug Kisqali and iptacopan, which is being tested against a rare inherited blood disorder. AstraZenecadrugs Soliris and Ultomyris.
Kesimpta, a multiple sclerosis treatment that requires fewer injections than standard treatments, is expected to become Novartis’ second largest growth driver after Entresto in 2023.
Asked by CNBC about the impact of the U.S. Inflation Reduction Act on drug pricing, Narasimhan said the company’s guidance for mid-single-digit growth and profit margins of 40% or more in 2027 is likely due to the law’s consideration. I said I put it in.
“We are well prepared to offset the impact of the IRA. However, in the medium to long term, it will be necessary to consider how the law will affect drugs in development, he said.
“I think there are some distortions in this bill that don’t make sense.
Speaking of legal changes and drug pricing rules that could affect business in Europe, Narasimhan said: “There is certainly austerity measures in place. We are seeing some kind of behavior,” he said.
“We really need European governments to refocus on healthcare and invest in innovation. We need the European Commission to create a more innovative environment,” he continued, pushing for this. He added that doing so will be another focus of the company this year.
CNBC’s Jenni Reid contributed to this report.
