Novartis Raises Earnings Guidance

Investing.com — Novartis AG (SIX:NOVN) has raised its annual earnings guidance for the third time, noting "momentum" in its business and medication pipeline after reporting a jump in third-quarter sales and profits.

In a call with analysts, the company mentioned it is conducting early research on an obesity drug that could offer better tolerability and longer dosing intervals. Anti-obesity treatments from Denmark's Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY) have become increasingly popular, with some analysts predicting the market for these medications could surpass $100 billion by the end of the decade.

However, Novartis reiterated its focus on other diseases, claiming these would drive sales growth well into the 2030s. CEO Vas Narasimhan emphasized that the firm is "not really reliant on the obesity wave."

The remarks follow strong demand for Novartis' psoriasis and arthritis drug Cosentyx, which helped third-quarter sales increase by 10% to $12.82 billion, exceeding consensus estimates of $12.67 billion. Core income per share reached $2.06, above projections of $1.95.

Novartis now anticipates net sales in 2024 to rise in the low double digits, up from its previous high-single to low double-digit guidance. Core operating profit is also expected to increase in the high teens, compared to prior forecasts of mid- to high-teens.

In a statement, Narasimhan expressed the group's "highly confident" stance in its mid-term forecasts as well.

Analysts at Jefferies noted they remain more bullish than consensus on Novartis's longer-term growth trajectory, showing optimism around its Scemblix and Pluvicto cancer medications, alongside its Fabhalta drug for kidney disease.

Shares of Novartis saw a decline in European trading on Tuesday.

(Reuters contributed reporting.)