Swiss pharma giant Novartis AG NVS reported better-than-expected results for the first quarter of 2025 and upped its annual guidance.
Core earnings (excluding one-time charges) of $2.28 per share easily beat the Zacks Consensus Estimate of $2.12 and were up from $1.80 reported a year ago. The year-over-year improvement was driven by strong growth in sales. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Revenues of $13.23 billion climbed 12% from the year-ago reported figure. On a constant currency basis, sales increased 15%, driven by the momentum in Entresto, Kesimpta, Kisqali, Cosentyx, Leqvio and Scemblix. The top line comfortably beat the Zacks Consensus Estimate of $12.9 billion.
Shares are up in pre-market trading in response to the strong quarterly results and increased guidance.
Shares of Novartis have gained 18.4% year to date compared with the industry’s growth of 1.6%.
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Detailed Performance of Top NVS Drugs in Q1
All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
With the successful spin-off of the Sandoz business in 2023, Novartis now concentrates on four core therapeutic areas — cardiovascular-renal-metabolic, immunology, neuroscience and oncology.
Cardiovascular drug Entresto’s sales rose 22% from the year-ago level to $2.26 billion. The increase was driven by robust, demand-led growth globally, including China and Japan, with increased penetration in hypertension.
Entresto’s sales comfortably beat the Zacks Consensus Estimate of $2.25 billion and our model estimate of $2.2 billion.
Cosentyx’s sales (psoriasis, spondylitis and arthritis) increased 18% to $1.53 billion, which missed the Zacks Consensus Estimate of $1.57 billion and our model estimate of $1.6 billion. The year-over-year improvement was driven by recent launches, including the hidradenitis suppurativa indication (HS) and the intravenous formulation (IV) in the United States, and volume growth in core indications.
Kisqali (breast cancer) maintained its stellar performance, with sales surging 56% to $956 million. Sales grew strongly across all regions, driven by exemplary growth in the United States with strong momentum from the recently launched early breast cancer (eBC) indication as well as continued share gains in the metastatic breast cancer indication.
Kisqali sales beat both the Zacks Consensus Estimate and our model estimate of $936 million.
Kesimpta (multiple sclerosis) sales totaled $899 million, which rose 43% on increased demand. The figure beat the Zacks Consensus Estimate of $872 million and our model estimate of $875 million.
Strong performances by Tafinlar + Mekinist (up 19% to $552 million) and Jakavi (up 7% to $492 million) also boosted the top line.
Promacta sales totaled $546 million, up 8%.
Xolair (asthma and allergies) sales grew 19% year over year to $456 million, driven by the chronic spontaneous urticaria indication, with a strong contribution from emerging growth markets. Novartis has a collaboration agreement with Roche RHHBY for Xolair. Novartis and Roche co-promote Xolair in the United States.
Ilaris sales amounted to $419 million, which increased 20% year over year, driven by growth in all regions led by the United States and Europe.
Tasigna sales declined 2% to $377 million due to lower demand and increasing competition.
Pluvicto (prostate cancer) raked in sales of $371 million, up 21% on solid growth in the United States and Europe in the metastatic castration-resistant prostate cancer (mCRPC) post-taxane setting.
The FDA’s approval for earlier use of the drug before chemotherapy will approximately triple the eligible patient population.
Sales missed the Zacks Consensus Estimate of $381 million and our estimate of $385.7 million.
Gene-therapy Zolgensma (spinal muscular atrophy) sales of $327 million were up 13%.
Cholesterol drug Leqvio sales soared 72% to $257 million on steady growth in demand. The figure beat the Zacks Consensus Estimate of $243 million and our estimate of $244 million.
Scemblix sales surged 76% to $238 million, driven by continued growth in chronic myeloid leukemia indication and strong momentum from the recently launched early-line indication in the United States.
Luthathera (cancer) sales totaled $193 million, up 15%. Sales grew mainly in the United States, Europe and Japan due to increased demand and earlier line adoption, particularly in the United States and Japan.
Sales of Lucentis plunged 38% to $189 million due to generic competition.
Fabhalta generated sales of $81 million, driven by continued launch execution across all markets in PNH and the recent launch in IgAN in the United States.
NVS Raises Guidance
Net sales are now expected to grow in high single digits (previous guidance: mid to high single digits). Core operating income is now expected to grow in low double-digits (previous guidance: high single to low double digits).
Key Updates From NVS
The FDA expanded Pluvicto’s label to include patients with PSMA-positive mCRPC who have been treated with an androgen receptor pathway inhibitor and are considered appropriate to delay chemotherapy, approximately tripling the eligible patient population.
The regulatory body also granted accelerated approval for Vanrafia (atrasentan) to reduce proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk of rapid disease progression.
Fabhalta was approved by the FDA, European Commission and China’s regulatory body for adult patients with C3 glomerulopathy (C3G), making it the first and only treatment approved for this condition in all three markets.
Our Take on NVS Q1 Performance
Novartis’ performance in the first quarter was impressive, with both earnings and sales beating estimates. Consequently, management raised its guidance for 2025, driven by strong growth of priority drugs, such as Leqvio, Kisqali and Kesimpta, during the first quarter.
Novartis AG Price, Consensus and EPS Surprise
Novartis AG Price, Consensus and EPS Surprise
Novartis AG price-consensus-eps-surprise-chart | Novartis AG Quote
Novartis’ performance has been pretty good in the past few quarters, buoyed by the solid performance of its priority brands. An increase in guidance implies that this momentum will be sustained in the upcoming quarters.
The pipeline progress is also encouraging. The label expansion of Pluvicto and Fabhalta should further fuel sales of these drugs. Approval of new drugs and label expansion of existing drugs should enable the company to offset the adverse impacts from expected generic competition for Tasigna, Promacta and Entresto (mid-2025).
While organic growth continues to drive business, NVS is focused on strategic bolt-in acquisitions to strengthen its pipeline. The company acquired Anthos Therapeutics, a clinical-stage biopharmaceutical company, to broaden its cardiovascular portfolio. The acquisition added abelacimab, a potential first-in-class monoclonal antibody targeting the FXI inhibition pathway in development for the prevention of stroke and systemic embolism in patients with atrial fibrillation.
Earlier, Novartis entered into a global license and collaboration agreement with PTC Therapeutics for the latter’s Huntington's disease candidate to strengthen NVS’ neuroscience pipeline.
Meanwhile, NVS recently announced a planned $23 billion investment over five years in U.S.-based infrastructure as it intends to manufacture all key drugs in the country. NVS' decision to expand its current manufacturing, research and technology presence across the country follows President Trump's announcement of tariffs on pharmaceutical imports.
NVS Zacks Rank and Stocks to Consider
Novartis currently carries a Zacks Rank #3 (Hold). A couple of better-ranked large-cap pharmaceutical stocks are Bayer BAYRY and Pfizer PFE, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Bayer’s 2025 earnings per share (EPS) have increased to $1.19 from $1.14. During the same time, EPS estimate for 2026 has increased to $1.28 from $1.123. Year to date, shares of Bayer have surged 34.6%.
Estimates for Pfizer’s 2025 EPS have risen from $2.96 to $2.99 over the past 60 days. Estimates for 2026 EPS have risen from $2.99 to $3.02 over the same timeframe. Pfizer beat on earnings in each of the trailing four quarters, delivering an average surprise of 4.16%.
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