The moment of glory for the big pharmas is not yet over, which are increasingly resembling mega pharma. Among these there is certainly the Basel-based pharmaceutical group, Novartis, which this morning published good results for the period from October to December 2021 and for the entire year. The stock, however, did not take off on the Zurich stock exchange and fell by 2.17% to 79.34 Swiss francs given the uncertainty surrounding the Sandoz affair.
In the fourth quarter of 2021, Novartis reported a jump in net profits from $ 2.1 billion a year ago to $ 16.3 billion, benefiting from the sale of its $ 20.7 billion stake in Roche, which earned $ 14.6 billion. . Core operating profit also increased by 9% (12% excluding the effect of exchange rates) to 3.8 billion. Earnings per share thus rose from 0.92 to 7.29 dollars, while the main one from 1.34 to 1.40, although lower than expected at 1.41.
Net sales grew by 4% to 13.2 billion, in line with the consensus estimate, thanks to the strong performance of innovative drugs (+ 5% in turnover). For example, the multiple sclerosis drug, Kesimpta, now approved in 64 countries, generated 147 million in revenues (+ 950%) in its first year on the market and, according to the group, will help sustain growth in the short term.
The big pharma also raised the proposed dividend for 2021 by 3.3% to 3.10 francs (3.37 dollars) per share. This is the twenty-fifth coupon increase since Novartis was founded in 1996. It should be remembered that the company launched a buyback plan for up to $ 15 billion last December to be implemented by the end of 2023.
Sandoz’s main operating income, a generic drug unit, remained flat at 528 million while its sales remained meager at 2.5 billion. Novartis said the strategic review of the division is “progressing” and will be given an update by the end of 2022 at the latest. the best value for our shareholders. “. Just yesterday the news came out of the ongoing negotiations between the private equity funds, Blackstone and Carlyle, on a potential offer for Sandoz, which could be valued at around 25 billion dollars.
Summing up for the whole of 2021, Novartis’ net profits tripled to 24 billion thanks to the Roche operation, operating income rose 8% to 16.6 billion, while net sales reached 51.6 billion. (+ 6%). “Novartis delivered another year of solid operational performance with single-digit top-line mid-range growth, margin expansion and strong cash flows. Our growth drivers within the market continue to perform well. results in all geographic areas, supporting our confidence in our medium and long-term growth prospects “, commented CEO, Vas Narasimhan.
As for the 2022 outlook, Novartis said it expects sales and profits to rise this year, giving a slightly more optimistic outlook than 2021, driven by new drugs, including one for the treatment of heart failure. , Entresto, and gene therapy, Zolgensma. Turnover and core operating profitare seen to grow by about 5% (average single-digit percentage range), explained the Basel-based multinational. A year ago he expected the same profitability performance and slower revenue growth. The m & a strategy will not change. Investors will be watching closely for an update on Ensovibep, the experimental treatment against Covid on which Novartis recently reached a licensing agreement with Molecular Partners. Narasimhan said in mid-January that he plans to apply for an emergency use permit for the compound in the United States within the next month.
Citi confirmed the buy rating on the Novartis stock, with a target price of 95 francs. “Risks that could prevent the stock from reaching our target price include higher than expected fines for the ongoing bribe case and also lower sales of key products, including Cosentyx (psoriasis), Zolgensma (spinal muscular atrophy) and Canakinumab. (cancer) “, analysts from the US bank explained. “Long-term downside risks include above-average returns on Novartis R&D investments and any disappointing news flow in the pipeline. The upside risks that could push the stock above our target price include better-than-average sales. planned for Entresto,
