Novartis Q2 results enhance future growth prospects with eight significant regulatory milestones

Industry Reports
  • Gilenya (USD 811 million, +17% cc) continued to grow double-digit mainly due to volume growth
  • Cosentyx (USD 260 million) grew strongly driven by its three approved indications

Core[1] operating income declined (-4% cc) due to generic erosion and growth investments

  • Core M&S expenses up 0.8 percentage points (cc) to 24.6% of sales, mainly driven by Cosentyx,Entresto and Alcon investments
  • Core operating income margin declined 1.1 percentage points (cc) behind investments
  • Core EPS was USD 1.23 (-1% cc)
  • Free cash flow[1] was USD 2.5 billion (+22% USD)

Significant positive innovation news in Q2

  • Entresto given strong Class I recommendation in US and EU heart failure treatment guidelines
  • JAMA Cardiology analysis found Entresto could prevent or postpone 28,000 US deaths per year
  • Cosentyx data showed durability of response in AS[2] and PsA[2] patients after two years; head-to-head trials vs. Humira® planned
  • Phase III trial of CDK4/6 inhibitor LEE011 in HR+/HER2- advanced breast cancer stopped early due to positive efficacy results at interim analysis
  • Full results from FLAME study reinforce superiority of Ultibro Breezhaler to Seretide® in COPD
  • Positive FDA AdCom[2] for biosimilar etanercept; biosimilar rituximab submitted in EU

Entresto (USD 32 million) continued to grow steadily in Q2

  • Based on positive treatment guidelines, decision was taken to increase spending significantly in H2 2016 to build a US primary care field force and add incremental medical support
  • Entresto sales expected to be approximately USD 200 million for full year 2016

Alcon growth plan progressing

  • Operations: Improved supply stability and reinforcing customer relationships
  • Innovation: CE Mark in Europe for Dailies Total1 Multifocal and PanOptix with UltraSert

2016 Outlook:

  • Net sales expected to be broadly in line with prior year (cc)
  • Based on the increased spending for Entresto, and depending on Gleevec erosion curve, core operating income expected to be broadly in line or decline low single digit (cc)

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care and cost-saving generic pharmaceuticals. Novartis is the only global company with leading positions in these areas. In 2015, the Group achieved net sales of USD 49.4 billion, while R&D throughout the Group amounted to approximately USD 8.9 billion (USD 8.7 billion excluding impairment and amortization charges). Novartis Group companies employ approximately 118,000 full-time-equivalent associates. Novartis products are available in more than 180 countries around the world. For more information, please visit