=Novartis (NVS) reported earnings on Tue 18 July 2017 (b/o)

Novartis AG beats by $0.04, reports revs in-line; reaffirms FY17 revs guidance :

• Reports Q2 (Jun) earnings of $1.22 per share, $0.04 better than the Capital IQ Consensus of $1.18; revenues fell 1.8% year/year to $12.24 bln vs the $12.19 bln Capital IQ Consensus.
  • Net sales in line with prior year (0% cc, -2% USD), as growth drivers offset Gleevec/Glivec Gx impact:
    • Cosentyx ($490 million, +90% cc) continues strong growth in all three indications
    • Entresto ($110 million) grew steadily driven by improved access and US sales force expansion
    • Excluding Gleevec/Glivec, Oncology grew 9% (cc), driven by Promacta, Tafinlar + Mekinist and Jakavi
    • Sandoz declined 4% (cc) mainly impacted by increased US pricing pressure
    • Alcon grew 3% (cc) driven by Surgical (+3% cc) with growth in key segments, including IOLs, and Vision Care (+2% cc)
• Co reaffirms guidance for FY17, sees FY17 revs of in-line with FY16 of $48.5 bln vs. $48.26 bln Capital IQ Consensus Estimate.
• Co sees core operating income expected to be broadly in line or decline low single digit.

Novartis earned $1.22 a share excluding various items, down from $1.23 a year earlier. Sales fell 2% to $12.24 billion amid growing generic competition for cancer drug Gleevec. But the numbers were better than analyst forecasts for earnings of $1.16 a share and revenue of $12.1 billion.

Excluding Gleevev/Gilvec, sales of cancer drugs rose 9%, excluding the impact of foreign exchange rates. Bone marrow stimulant Promacta/Revolade pulled in $210 million, up 35%. Sales of advanced melanoma and advanced lung cancer combination Tafinlar and Mekinist grew 28% to $216 million.

Consentyx was another driver, growing 90%, excluding the impact of foreign exchange rates, to $490 million, Novartis said in a news release. The drug is approved to treat plaque psoriasis, psoriatic arthritis and inflammation of the spine and joints.

Despite broadening competition in multiple sclerosis treatments that includes the likes of Biogen (BIIB), Roche (RHHBY) and Sanofi (SNY), Novartis' MS drug Gilenya brought in $837 million, up 5% excluding the impact of foreign exchange rates. But Celgene (CELG) is now working on a drug that could directly rival Gilenya.

Novartis' Alcon eye-care unit reported a small sales increase to $1.5 billion. Novartis raised its full-year Alcon sales target slightly, hinting at a possible spinoff for the division. Sales of contact lenses grew for the fifth consecutive quarter, Evercore analyst Umer Raffat noted in a report.