Novartis Lifts Forecast as Drugmaker Counters Covid Impact
Novartis Raises Forecast as Drugmaker Weathers Covid-19
(Bloomberg) -- Novartis AG’s outlook for the year has improved as the Swiss drugmaker’s new products, including a gene therapy that sells for $2.1 million, help counter disruption from Covid-19.
Earnings excluding some items will likely increase by a low-double-digit to mid-teens percentage in 2020, the drugmaker said on Tuesday. Novartis’s prior forecast was for a low-double-digit percentage rise.
A heart drug, psoriasis treatment, and the Zolgensma gene therapy that was approved in the U.S. last year, are helping Novartis grapple with changing patterns in hospital admissions that have delayed care for cancer and other conditions. Competitors Pfizer Inc., Eli Lilly & Co. and Merck & Co. are all due to follow with their results later on Tuesday.
“We’re on track to finish the year strongly,” Chief Executive Officer Vas Narasimhan told reporters on a call.
The company said Covid-19 continues to hamper demand for skin and eye treatments, along with some drugs from the Sandoz generics unit, and Narasimhan said the company would need to adapt if there are further severe lockdowns. The stock slipped as much as 1.7% in Zurich trading.
Doctor visits for most types of therapies returned to pre-Covid levels by September, he said. “In early October, we did see a slight dip again, but still pretty close to pre-Covid levels,” Narasimhan added in an interview with Bloomberg TV.
“I expect there to be volatility on this front,” the CEO told reporters earlier on the call. “That said, I think health-care systems are getting much better at managing the pandemic and ensuring patients are getting the care they need for all the other medical conditions that are critically important to treat even in the face of this pandemic.”
Novartis is benefiting from gains for products such as Zolgensma. Geographic expansion outside the U.S. and increased newborn screening are buoying the gene therapy, and total sales are still expected to grow by a mid-single-digit percentage for the year.
Legal costs, including a fine by French regulators last month for restricting competition in eye treatments, weighed on the results. Novartis also agreed earlier this year to pay $678 million to resolve a whistle-blower case in the U.S., in which the drugmaker was accused of paying kickbacks to doctors.
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