Novartis raises profit guidance as key drug sales drive third-quarter growth

what happened

The Swiss drugmaker said net sales for the three months to 30 September rose 4% to $14.5bn. Core operating income grew 11% to $6bn, and the core operating margin improved by 2.3 percentage points to 41.6%. The breast cancer treatment Kisqali led growth, with sales up 37% at constant currencies to $1.82bn.

Reported net profit, however, fell 70% to $1.2bn, mainly because of a $1.9bn impairment linked to the experimental medicine del-desiran after disappointing clinical results. Novartis now expects full-year core operating income to be broadly flat or to rise by a low single-digit percentage at constant currencies, up from its earlier forecast of a low single-digit decline. Its sales growth guidance was maintained. By 1248 BST, Novartis shares were 0.7% higher at CHF128.42.

why it matters

A raised profit outlook matters for the pharmaceutical sector and for Swiss equities, since large drugmakers carry significant weight in the SMI index. The impairment distorts reported net profit, so investors are likely to focus on core operating measures.

market impact

Novartis shares: the raised profit outlook supports the stock by lifting earnings expectations

• ▲Novartis shares pressure up — the raised core operating income outlook improves earnings expectations

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