Novartis International Reports Double-Digit Growth in Core Operating income

Novartis International Reports Double-Digit Growth in Core Operating income

Novartis International AG recently posted its financial results for the second quarter of 2019. The company experienced stronger sales during the three-month period alongside double-digit growth in its core operating income.

Key highlights from the reports

The net sales at the company continued to grow by 8% during the quarter, and there was a strong 9% growth in oncology sales as well. Lutathera brought $109 million in sales for the company in cancer treatments. Cosentyx topped the list with $858 million, marking a 25% increase overall and 31% growth in the US alone.

Novartis International Reports Double-Digit Growth in Core Operating income

The second highest grosser was Entrestro with sales growing by a whopping 81% to $421 million. Kisqali brought $111 million while Kymriah grosses $58 million. The sales of Sandoz increased by only 3%, but its ex-US growth was enough to offset its decline in the country.

Better sales and increasing productivity at the company helped the core operating income grow by 20%. Now, the company’s core operating income margin is 31% of net sales, marking an increase of 3.2 percentage points. But the company’s net income from continuing operations did not fare well in Q2. In the three months ending June 30, the net income of Novartis was only $2.1 billion, a sharp decline from last year.

Company strategy is paying off

Higher proceeds from divestment are helping Novartis increase its cash flow. The figure improved by 11% to $3.6 billion. Better net operating income is also helping the free cash flow growth. In the search for new blockbusters, the company launched Zolgensam gene therapy for children under the age of two suffering from SMA. The therapy has provided robust data sets proving its efficacy in a broad spectrum of patients.

The company also launched Piqray (alpelisib) for the treatment of advanced breast cancer with a PIK3CA mutation and its SEG101 (crizanlizumab) treatment for sickle cell disease is awaiting US FDA review. CEO Vas Narasimhan commented on the spectacular results of the company saying, “Novartis delivered an exceptional first-half performance in 2019 as a focused medicines company with strong sales and productivity driving double-digit core operating income growth with margin expansion.”

Following a decent quarter, the company has increased its full-year guidance for core operating income as well as sales, which it expects to grow in mid-to-high single digits. It also announced the appointment of Marie-France Tschduin as president for Novartis Pharmaceuticals.

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Viraj Shah

Viraj loves to write and express his views on anything related to Finance, Crypto, or Fintech. He has been covering Finance & Crypto for more than five years now. He likes Tesla. He also writes on Healthcare, and Technology among other stuff.
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