The Swiss pharmaceutical company Novartis has presented the results for the third quarter of 2023. Thus, net sales increased by twelve percent to $11.8 billion. Net income is $1.5 billion, an increase of 14 percent. These are the first quarterly figures announced by the pharmaceutical company without its spun-off generics subsidiary Sandoz. Vas Narasimhan, CEO of Novartis, comments on the latest figures: “Novartis delivered a very strong quarter, with double-digit sales and core operating income growth leading to a further upgrade to 2023 guidance. We have successfully executed the spin-off of Sandoz, allowing us to fully focus on high-value innovative medicines." He emphasizes that the growth drivers, which include drugs to treat multiple sclerosis, heart failure, breast cancer and prostate cancer, continue to record good market shares. The robust pipeline also continues to produce good results, he adds. The CEO affirms: "We are confident in our mid-term growth outlook and remain committed to creating value for our shareholders.”
Following shareholder approval of the spin-off of the Sandoz business on September 15, 2023, the company has reported its consolidated financial statements for the current and prior years as "continuing operations" and "discontinued operations."Continuing operations comprise the retained businesses of Novartis, consisting of the Innovative Medicines Division and the continuing operations of Corporate. Discontinued operations comprise the Sandoz Division and selected parts of Corporate's activities attributable to the Sandoz business, as well as certain spin-off-related expenses.
Net revenue is $11.8 billion in the third quarter of 2023, up 12 percent year-over-year. Operating profit is $1.8 billion, a decrease of four percent year-over-year, or 13 percent when adjusted for foreign exchange. This was mainly due to higher sales and lower restructuring costs, partially absorbed by higher impairment charges due to the discontinuation of early-stage development projects. Net income at Novartis was $1.5 billion, up 14 percent and 37 percent at constant exchange rates. The result was mainly driven by higher operating income and a lower tax rate due to non-recurring items.
In the period from January to September 2023, the pharmaceutical company posted net sales of $34 billion, an increase of eight percent compared to the same period last year. Operating income reaches $7.2 billion for the first nine months, up 16 percent. Net income for the three quarters of 2023 is $5.9 billion, up 25 percent.
Novartis has completed its transformation into a pure-play company focused on novel prescription medicines with the spin-off of Sandoz. The focus is now on four core therapeutic areas: cardiovascular diseases, renal and metabolic diseases, immunology, and neurology and oncology. In addition to two established technology platforms for chemistry and biotherapeutics, three new platforms for gene and cell therapy, radioligand therapy and xRNA will be prioritized for further investment in new research, development and manufacturing capacity. Geographically, the pharmaceutical company is focusing on growth in the priority markets of the USA, China, Germany and Japan.
Barring unforeseen events and assuming year-on-year growth at constant exchange rates, Novartis continues to expect net sales to grow at a high-single-digit rate. Core operating income is expected to grow in the mid to high teens. Previously, the company had expected low double-digit percentage to mid-teens growth.
