Novartis Reports Robust Q4 2024 Results With Strong Sales Growth And Positive Outlook
Novartis AG showcased exceptional financial performance for the fourth quarter of 2024, driven by significant sales within its priority brands and successful innovations. The company's sales surged by 16% compared to the previous year, contributing to full-year growth of 12%. The quarter also saw core operating income increase by 29%, leading to 22% growth for the year.
Chief Executive Officer Vasant Narasimhan highlighted the strong showing during the earnings call held on January 31, 2025, stating, "Novartis delivered one of the strongest performances we've had in our history in 2024." The company has ambitious targets, with plans for continued sales growth and margin expansion reaching 40% by 2027. The details of the quarter's breakdown indicated particularly strong performances from several drug brands.
Entresto, Novartis's heart failure medication, reported sales of $7.8 billion for the full year, marking impressive 31% growth, with overtaking wedge competition from generic versions slated for mid-2025. Core operating income for the quarter was also noteworthy, reaching $1.98 per share, up by 33%. The company expects this momentum to continue, projecting at least 5% sales growth for the next several years.
Cosentyx, another leading drug, achieved over $6 billion in sales, growing 25%, buoyed by recent launches and the continued demand for its treatment of inflammatory conditions. Core operating income margins stood at 38.7%, with Narasimhan mentioning, "Our priority brands continued to drive strong growth," highlighting the importance of their innovative pipeline amid upcoming challenges from generic competition.
Novartis emphasized its long-term strategy to mitigate the effects of losing exclusivity on key drugs. The company is currently pursuing protective measures for Entresto outside of the U.S. as it anticipates potential loss of patent protection to generic competition. Meanwhile, it continues to maintain strong market positioning for its myriad brand offerings.
New launches and innovative pipeline innovations like Scemblix and Kisqali are anticipated to contribute significantly to future revenues. Scemblix, which focuses on treating chronic myeloid leukemia, saw its sales grow by 68%, solidifying its status as market leader. Kisqali also performed favorably, with sales of $3 billion and 49% growth year-over-year, benefitting from new guidelines and approvals for early breast cancer indications.
Chief Financial Officer Harry Werner Kirsch noted the strategic direction taken by Novartis after its transition to becoming solely focused on innovative medicines. He stated, "We have generated more cash than we did as combined businesses," and reaffirmed the company’s commitment to maintaining shareholder value alongside its growth strategies.
Further supporting Novartis's commitment to innovation, over $9 billion was invested in research and development (R&D) during the year, reflecting the company's deep focus on sustaining growth through bolstering its pipeline. The pipeline remains strong with candidates undergoing phase 2 and 3 trials across various therapeutic areas, including exciting new drugs for Huntington's Disease and other chronic conditions.
Looking forward, Novartis has outlined clear expectations for its performance as it heads toward 2025, with guidance indicating mid- to high-single-digit sales growth. Key product lines and launches are set to carry the company past challenges posed by patent expirations, particularly for Cosentyx and Entresto. The leadership remains focused on balancing growth with sustainable practices, indicating readiness for new launches to offset any impacts from generics.
Importantly, peer analysts like Florent Cespedes from Bernstein raised questions concerning the loss of exclusivity for Entresto and how the company plans to navigate potential price pressures and margin impacts as generics enter the market. The emphasis remains on ensuring patient compliance and the continued uptake of their innovative portfolio.
Novartis's strong financial performance and focus on innovation set the stage for sustained growth and profitability as it addresses both current market challenges and future opportunities. With guidance reflecting confidence, the pharmaceutical giant continues to bolster its position within the competitive marketplace.
This solid performance is accompanied by several ambitious goals, including achieving core margins of 40% or more by 2027, sustained R&D investment, and continued success within the competitive pharmaceutical industry. Novartis aims to leverage its innovative pipeline and prioritize brand growth, anticipating they will play pivotal roles as the company moves forward.