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Novartis, the Swiss pharmaceutical company, has revised its full-year earnings forecast for 2023 upwards for the third time. This adjustment is attributed to expense reductions and stronger than anticipated pricing for multiple sclerosis (MS) medications.
Kesimpta Sales Soar
The third-quarter sales of Kesimpta, a monthly self-injectable treatment for MS, surged to $657 million, surpassing analyst expectations of $525 million. This growth was fueled by price increases in the European market that exceeded predictions.
Competing in the MS Market
Novartis is a key player in the MS market, competing with Roche and its twice-a-year hospital infusion drug, Ocrevus.
Novartis CEO, Vas Narasimhan, who had previously streamlined the company by reducing jobs and focusing on select therapeutic areas and global markets, now faces increased pressure for innovation following the Sandoz spin-off.
Read More: Recruiter Randstad Reports Companies’ Reluctance to Hire Amid Soft Job Market
Efficiency Gains and Improved Outlook
The quicker-than-expected efficiency gains resulting from job cuts, along with more favorable cost trends, have contributed to the improved financial outlook, as stated by Chief Financial Officer Harry Kirsch.
Novartis 2023 earnings forecast reported a 12% rise in third-quarter group sales to $11.78 billion, excluding contributions from Sandoz, which exceeded analysts’ expectations.
Strong Operating Profit Earnings Forecast
The adjusted operating profit climbed by 17% to $4.41 billion, surpassing the average analysts’ estimate of $4.18 billion.
Revenues from psoriasis and arthritis drug Cosentyx increased by 4% to $1.33 billion, surpassing expectations. Sales of the company’s top product, Entresto, earnings forecast also rose by 31% to $1.49 billion.
Despite its success, Entresto faces legal challenges from generic drugmakers attempting to introduce cheaper alternatives before its patent protection expires in 2025. Novartis is also engaged in a legal battle with the U.S. government, seeking to halt the Medicare drug-price negotiation program, which includes Entresto.
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