In This Article:
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Sales Growth: Up 15% in Q1 2025.
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Core Operating Income: Increased by 27%.
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Core Margin: Reached 42.1%, up 400 basis points.
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Core Earnings Per Share: $2.28, up 31%.
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Free Cash Flow: $3.4 billion, up 66% in US dollars.
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Kisqali Growth: 56% in constant currency.
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Kesimpta Growth: 43% in constant currency.
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Pluvicto Growth: 21% in Q1.
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Leqvio Growth: 72% in the quarter.
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Cosentyx Growth: 18% in the quarter.
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Entresto Growth: 22%, reaching over $2.2 billion in global sales.
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Full-Year Guidance: Sales expected to grow high single digits; core operating income to grow low double digits.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Novartis AG (NYSE:NVS) reported double-digit sales growth of 15% and core operating income growth of 27% for Q1 2025.
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The company achieved a core margin of 42.1%, reflecting a 400 basis points improvement.
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Key products such as Kisqali, Kesimpta, and Pluvicto showed strong growth, with Kisqali growing 56% and Kesimpta 43% in constant currency.
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Novartis AG (NYSE:NVS) upgraded its full-year 2025 guidance, expecting high single-digit sales growth and low double-digit core operating income growth.
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The company made significant pipeline progress with three new approvals in the quarter, including Pluvicto, Vanrafia, and Fabhalta.
Negative Points
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The company faces potential challenges from tariffs and geopolitical uncertainties, which could impact its financial outlook.
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There is ongoing litigation concerning generic entries for key products like Entresto, which could affect future revenue.
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Novartis AG (NYSE:NVS) is dealing with pricing pressures in Europe, which may impact the launch and profitability of new medicines.
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The company needs to expand the number of sites capable of administering Pluvicto to fully realize its market potential.
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There are concerns about the impact of potential US policy changes, such as the most favored nation pricing, on the company's financial performance.
Q & A Highlights
Q: Can you provide insights on Novartis' exposure to tariffs and the impact on your financial outlook? A: Vasant Narasimhan, CEO, explained that Novartis has accounted for potential tariffs in its guidance and has taken actions to manage inventory and supply chain effectively. The company is investing $23 billion to ensure key US products are produced end-to-end in the US, aiming for a manageable impact on financials.
Q: Could you elaborate on the gross to net positive impact and its distribution across the portfolio? A: Harry Kirsch, CFO, noted that the 2 percentage points impact was due to lower Medicaid utilization and favorable channel mix. This was broad-based across many brands, without distorting growth rates significantly.