Novartis Raises Sales Guidance Citing Cancer, Inflammatory Drugs

Novartis AG raised its medium-term sales target, citing upbeat expectations for new cancer and immunological disease medicines, as well as treatments for neurological and cardiovascular conditions.

Revenue will grow 6% a year through 2029, the Basel, Switzerland-based drugmaker said on Thursday, an upgrade from its previous guidance of 5%.

Novartis shares rose slightly in early trading Thursday. The company's stock has risen 7.2% this year through Wednesday's close, compared with a 3.1% increase for the Bloomberg index tracking European pharmaceutical companies. 

The company lifted its peak sales estimates for its Cosentyx, Kisqali, Kesimpta, Pluvicto and Leqvio drugs, most of which have expected US exclusivity in the 2030s or beyond. 

(Photographer: Sarah Blesener/Bloomberg)

Chief Executive Officer Vas Narasimhan highlighted “more than 15 submission-enabling readouts in the coming years to further bolster our growth.” 

Novartis also said it counts more than 30 other pipeline assets that will support mid-single-digit growth post 2029.

The ability of Novartis to hit the new sales target will be “heavily reliant on core cancer but also on the delivery of key datasets in 2025/26,” said John Murphy, a senior industry analyst at Bloomberg Intelligence. 

Novartis is pushing for growth after cutting what was once a sprawling portfolio of health-care businesses to focus on innovative medicines. 

Narasimhan completed the last major step in that transformation just over a year ago with the spinoff of generics producer Sandoz. 

Narsimham said that “value-creating bolt-on” merger and acquisition activity will remain an important part of the company's capital allocation policy. 

“Most of our activity, if you looked over the recent seven, eight years has been in the $5 billion range,” said Narasimhan on a media call. 

“I don't think we've done a single deal above $10 billion,” he added. “I don't see that materially changing.”

Narasimhan added that the goal for Novartis to become one of the top five pharmaceutical firms in the US still needs “quite some work,” calling it a “five year plus project.”

“We won't do MA just to get into the top five, but clearly we want to get there,” he said.