Novartis Expects Annual Sales Growth

ZURICH (Reuters) – Novartis (SIX:NOVN) expects to increase its annual sales by at least 5% per year in the coming years, CEO Vas Narasimhan said in an interview on Saturday, emphasizing that the pharmaceuticals giant has nothing to fear from the end of patent protection on some drugs.

"I am very confident that we will achieve average growth of at least 5% per year until 2028," Narasimhan told Swiss newspaper Finanz und Wirtschaft.

This growth is anticipated to come from eight or nine drugs generating multi-billion dollar sales, although maintaining a pipeline of new medications remains a significant challenge.

Narasimhan expressed confidence in reaching this growth target despite the imminent expiry of patents on medications like Entresto, used to treat heart failure.

"We also expect sales and profit growth for 2025. We will announce a specific forecast in January," said Narasimhan, who has led Novartis since 2018.

He acknowledged that while the expiry of major patents generally leads to declining sales in the pharmaceutical industry, Novartis is not concerned about this trend.

The company will not, however, increase its core operating profit margin much beyond the current level of 40.1%. "I consider a margin in the low 40% range to be sufficient – higher margins are generally not rewarded in the pharmaceutical industry as they come at the expense of investments in research, development and sales growth," he added.

Novartis is also considering acquisitions, focusing on bolt-on deals worth less than $1 billion. "Of course, we will continue to look for deals of up to $10 billion or more," Narasimhan stated. "However, our analysis shows that the track record of such deals in the sector has historically been rather poor."