Novartis reported fourth-quarter 2022 sales of $12.7 billion. This represents a decrease of four percent compared to the same period last year, when $13.2 billion was generated. At constant exchange rates, there was an increase of three percent. The period was characterized by volume increases partially absorbed by price erosion and losses due to generic competition. Operating profit declined to $1.9 billion, down 24 percent. This was partly due to higher restructuring costs. Including the income from the investment in Roche in 2022, net income was $1.5 billion. This represents a decline of 91 percent compared to the previous year, in which $16.3 billion was generated.
Novartis division Innovative Medicines posted net sales of $10.4 billion for the period between October and December 2022, down three percent. In the US, sales were $4.2 billion, up seven percent. Elsewhere in the world, sales were down nine percent at $6.2 billion. The generics subsidiary Sandoz posted net sales of $2.3 billion, down eight percent. Sales of the Biopharmaceuticals unit were $517 million worldwide, down seven percent. At constant exchange rates, however, this represents an increase of three percent, with increases in Europe, Canada and Latin America.
Net sales were $50.5 billion in 2022, down two percent or up four percent at constant exchange rates. Operating income lost 21 percent and was $9.2 billion compared to $11.7 billion in 2021. Including income from the Roche investment in the prior year, net income was $7 billion in 2022, down 71 percent from the same period last year. Innovative Medicines was the main contributor to earnings with $41.3 billion in net sales. Sandoz generated net sales of 9.2 billion euros and Biopharmaceuticals contributed 2.1 billion across all regions.
“Commenting on 2022 results, Vas Narasimhan, CEO of Novartis, said: “Novartis is on track to become a pure-play innovative medicines company, uniquely positioned to leverage its global scale and R&D platforms. Our six multi-billion brands now represent 32 percent of our Innovative Medicines sales and are growing 26 percent.” He continues: ”Looking ahead, we have a catalyst rich pipeline with 15 pivotal readouts in the mid-term. We expect to continue to deliver improved financials and strengthen Novartis ESG foundations, on our journey to become most trusted and valued medicines company in the world”.
As part of its transformation into an "Innovative Medicines Company," Novartis pursued a new, focused strategy in 2022. The pharmaceutical company has targeted five core therapeutic areas: cardiovascular diseases, immunology, neuroscience, solid tumors and hematology. In each of these areas, the manufacturer has several key drugs on the market and product candidates in the pipeline that it says are managing a high disease burden and have significant growth potential. In addition to two established technology platforms for chemistry and biotherapeutics, three new platforms for gene and cell therapy, radioligand therapy and xRNA are being prioritized for further investment in new research, development and manufacturing capacity. Geographically, Novartis is focused on growth in its priority markets of the US, China, Germany and Japan. The planned spin-off of Sandoz is scheduled for the second half of 2023 as announced.
