Novartis (NOVN) earnings Q4, full-year FY24

Swiss pharmaceutical giant Novartis on Friday reported better-than-expected sales in the fourth quarter and met its own guidance over the full-year stretch.

Fourth-quarter net sales rose 16% on a constant currency basis to $13.2 billion, compared to the $12.795 billion estimated by analysts in an LSEG poll.

Quarterly adjusted core operating income came in at $4.86 billion versus the $4.23 billion expected.

Shares pared back some of their earlier gains to end the trading session 1.9% higher.

For 2024, net sales rose 12% on a constant currency basis to $50.32 billion, versus $50.47 billion forecasted. Full-year core operating income increased 22% to $19.5 billion versus the $17.02 billion forecasted.

The company said the sales growth was driven primarily by its blockbuster heart-failure drug Entresto and its arthritis medication Cosentyx.

Novartis had raised its 2024 earnings guidance for the third consecutive quarter in October, saying it expected full-year net sales to grow in the “low double-digit” percentages and core operating income to grow in the ‘high teens” percentages.

CEO Vas Narasimhan said the results marked a positive early signal since implementing a strategic overhaul in 2023 to position Novartis as a “pure-play innovative medicines company.”

“When you look at the momentum we’ve got in the business we really feel like we’ve got the growth drivers to take care of us through 2025,” Narasimhan told CNBC’s Carolin Roth.

Novartis outlined its guidance for 2025, forecasting net sales will grow by “mid- to high single digits” and core operating income will increase by “high single to low double-digits.”

Narasimhan also downplayed the expiration of the U.S. patent for its top selling drug Entresto, which brought in $7.8 billion in revenue globally in 2024. Patent expiration opens a drug up for development by generic drugmakers, thereby increasing competition.

“We actually have tremendous replacement power,” he said, referring to drug makers’ ability to bring new treatments to market when patents expire on existing products.

“There’s not many companies that can guide to the growth that we’re guiding to,” he continued, “given that we have these expiries. That’s really a testament to the pipeline and replacement power we have in the company. So we feel very good about the growth issue. We even feel confident we’ll be able to grow in 2026, when we have the full Entresto impact.”

Looking ahead, Narasimhan said Novartis was focused on advancing its development pipeline, including more than 30 assets “with the potential to drive differentiated growth over the long term.”

That includes several key clinical trial results due out later this year, chiefly a treatment for prostate cancer and another for chronic spontaneous urticaria, a type of skin condition.

Narasimhan said the business would also continue to explore…