On April 29, 2025 Novartis reported that commenting on Q1 2025 results, Vas Narasimhan, its CEO said (Press release, Novartis, APR 29, 2025, View Source [SID1234652258]):
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"Novartis has had a strong start to the year, delivering a +15% cc increase in sales and a +27% cc rise in core operating income in Q1. Our priority brands, including Kisqali, Kesimpta and Leqvio, continue to show strong momentum, which we anticipate will drive our growth through 2030 and beyond. We also achieved significant innovation milestones in the quarter, with new approvals for Pluvicto in the pre-taxane setting, Vanrafia for IgA nephropathy, and Fabhalta for C3G. Additionally, we completed global submissions for remibrutinib in CSU, the first indication for this promising pipeline-in-a-pill. We remain focused on advancing our leading pipeline and confident in achieving our growth outlook."
Key figures
Q1 2025 Q1 2024 % change
USD m USD m USD cc
Net sales to third parties 13 233 11 829 12 15
Operating income 4 663 3 373 38 44
Net income 3 609 2 688 34 37
EPS (USD) 1.83 1.31 40 42
Free cash flow 3 391 2 038 66
Core operating income 5 575 4 537 23 27
Core net income 4 482 3 681 22 26
Core EPS (USD) 2.28 1.80 27 31
1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 31 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 5.
Strategy
Our focus
Novartis is a "pure-play" innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan.
Our priorities
Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.
Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility.
Strengthen foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.
Financials
Net sales were USD 13.2 billion (+12%, +15% cc), with volume contributing 15 percentage points to growth. Generic competition had a negative impact of 2 percentage points and pricing had a positive impact of 2 percentage points, benefiting from revenue deduction adjustments mainly in the US.
Operating income was USD 4.7 billion (+38%, +44% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches.
Net income was USD 3.6 billion (+34%, +37% cc), mainly driven by higher operating income, partly offset by higher income taxes. EPS was USD 1.83 (+40%, +42% cc), benefiting from the lower weighted average number of shares outstanding.
Core operating income was USD 5.6 billion (+23%, +27% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches, and R&D investments. Core operating income margin was 42.1% of net sales, increasing 3.7 percentage points (4.0 percentage points cc).
Core net income was USD 4.5 billion (+22%, +26% cc), mainly due to higher core operating income. Core EPS was USD 2.28 (+27%, +31% cc), benefiting from the lower weighted average number of shares outstanding.
Free cash flow amounted to USD 3.4 billion (+66% USD), compared with USD 2.0 billion in the prior-year quarter, driven by higher net cash flows from operating activities.
Q1 priority brands
Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q1 growth) including:
Entresto (USD 2 261 million, +22% cc) sustained robust, demand-led growth globally, including in China and Japan with increased penetration in hypertension
Kisqali (USD 956 million, +56% cc) sales grew strongly across all regions, including +87% growth in the US with strong momentum from the recently launched early breast cancer indication as well as continued share gains in metastatic breast cancer
Kesimpta (USD 899 million, +43% cc) sales grew across all regions driven by increased demand and strong access
Cosentyx (USD 1 534 million, +18% cc) sales grew mainly in the US, emerging growth markets and Europe, driven by recent launches as well as volume growth in core indications
Leqvio (USD 257 million, +72% cc) continued steady growth, with a focus on increasing account and patient adoption, and continuing medical education
Scemblix (USD 238 million, +76% cc) sales grew across all regions, demonstrating the continued high unmet need in CML and strong momentum from the recently launched early-line indication in the US
Fabhalta (USD 81 million) sales grew driven by continued launch execution across all markets in PNH as well as the recent launch in IgAN in the US
Pluvicto (USD 371 million, +21% cc) continued stable performance in the US and grew in Europe in the mCRPC post-taxane setting. With the FDA’s approval for earlier use before chemotherapy, which approximately triples the eligible patient population, the focus is on driving demand in established RLT sites while activating new sites and supporting referring providers to enable patient access
Zolgensma (USD 327 million, +13% cc) sales grew as it continues to demonstrate strong performance in the incident population
Lutathera (USD 193 million, +15% cc) sales grew mainly in the US, Europe and Japan due to increased demand and earlier line adoption particularly in the US and Japan
Net sales of the top 20 brands in the first quarter
Q1 2025 % change
USD m USD cc
Entresto 2 261 20 22
Cosentyx 1 534 16 18
Kisqali 956 52 56
Kesimpta 899 41 43
Tafinlar + Mekinist 552 16 19
Promacta/Revolade 546 5 8
Jakavi 492 3 7
Xolair 456 14 19
Ilaris 419 18 20
Tasigna 377 -5 -2
Pluvicto 371 20 21
Zolgensma 327 11 13
Sandostatin Group 317 -11 -9
Leqvio 257 70 72
Scemblix 238 75 76
Lutathera 193 14 15
Lucentis 189 -40 -38
Exforge Group 179 -7 -1
Diovan Group 150 7 12
Galvus Group 124 -17 -11
Top 20 brands total 10 837 17 19
R&D update – key developments from the first quarter
New approvals
Pluvicto
(lutetium Lu177 vipivotide tetraxetan) FDA expanded the indication for Pluvicto to include patients with PSMA-positive metastatic castration-resistant prostate cancer (mCRPC) who have been treated with an androgen receptor pathway inhibitor and are considered appropriate to delay chemotherapy, approximately tripling the eligible patient population.
Vanrafia
(atrasentan) FDA granted an accelerated approval for Vanrafia for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk of rapid disease progression. Vanrafia can be seamlessly added to supportive care in IgAN and used as a foundational therapy.
Fabhalta
(iptacopan) Fabhalta was approved by the US FDA, European Commission and China’s NMPA for adult patients with C3 glomerulopathy (C3G), making it the first and only treatment approved for this condition in all three markets.
Regulatory updates
Remibrutinib Regulatory submissions for remibrutinib for the treatment of chronic spontaneous urticaria (CSU) were completed in the US, EU and China. A priority review voucher was used in the US and approval is anticipated in H2 2025, and priority review was granted in China.
Scemblix
(asciminib) Regulatory submission for Scemblix in adults with newly diagnosed CML was completed in the EU based on 96-week data from the Phase III ASC4FIRST study.
Results from ongoing trials and other highlights
OAV101 IT
(onasemnogene
abeparvovec) Novartis announced positive safety and efficacy results from the Phase III program for investigational intrathecal OAV101 IT in a broad population of patients aged two to <18 years with spinal muscular atrophy (SMA). In the Phase III STEER study, treatment with OAV101 IT led to a statistically significant and clinically meaningful 2.39-point improvement on the Hammersmith Functional Motor Scale Expanded vs. 0.51 points in the sham control arm. In addition, in the Phase IIIb STRENGTH study, treatment with OAV101 IT in patients who have discontinued treatment with nusinersen or risdiplam demonstrated stabilization of motor function over 52 weeks of follow-up. OAV101 IT demonstrated a favorable safety profile, consistent in both treatment-naïve and treatment-experienced patients. Data were presented at MDA.
Remibrutinib The New England Journal of Medicine published data from the 24-week double-blind placebo-controlled period of the Phase III REMIX-1 and -2 studies. Remibrutinib showed early symptom improvement and sustained efficacy, with improvements in CSU symptoms compared to placebo observed as early as week 1 and response rate maintained through the double-blind treatment period. Remibrutinib was well tolerated, with overall adverse event rates comparable to placebo.
Multiple analyses of the REMIX-1 and -2 trials were presented at medical congresses in Q1. At AAAAI, long-term results showed that patients experienced improved urticaria control within two weeks of starting treatment. Patients who switched from placebo to remibrutinib at week 24 achieved similar improvements through week 52. At AAD, data was presented showing that treatment with remibrutinib had positive effects on sleep and daily activities for CSU patients.
Ianalumab The results of Phase II VAYHIT3 study in adult patients with advanced primary ITP, previously treated with at least a corticosteroid and a thrombopoietin receptor agonist, indicate that a short course of ianalumab has clinically meaningful efficacy and is well tolerated in these patients. These results will be presented at a future medical meeting and are expected to support a filing in second-line ITP, based on the Phase III VAYHIT2 study, expected to read out in H2 2025.
Selected transactions Novartis has completed the acquisition of Anthos Therapeutics, a clinical-stage biopharmaceutical company developing abelacimab, a potential first-in-class monoclonal antibody targeting the FXI inhibition pathway in development for the prevention of stroke and systemic embolism in patients with atrial fibrillation. The acquisition adds a Phase III asset and is aligned with the Novartis growth strategy and expertise in the cardiovascular therapeutic area.
Capital structure and net debt
Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority.
In Q1 2025, Novartis repurchased a total of 24.8 million shares for USD 2.6 billion on the SIX Swiss Exchange second trading line under the up-to USD 15 billion share buyback announced in July 2023 (with up to USD 2.7 billion still to be executed). In addition, 1.5 million shares (equity value of USD 0.2 billion) were repurchased from employees. In the same period, 10.5 million shares (equity value of USD 0.3 billion) were delivered to employees related to equity-based compensation plans. Novartis aims to offset the dilutive impact from equity-based compensation plans of employees over the remainder of the year. Consequently, the total number of shares outstanding decreased by 15.8 million versus December 31, 2024. These treasury share transactions resulted in an equity decrease of USD 2.5 billion and a net cash outflow of USD 2.7 billion.
Net debt increased to USD 22.3 billion at March 31, 2025, compared with USD 16.1 billion at December 31, 2024. The increase was mainly due to the free cash flow of USD 3.4 billion being more than offset by the USD 5.3 billion annual net dividend payment in March (which is the gross dividend of USD 7.8 billion reduced by the USD 2.5 billion Swiss withholding tax that was paid in April 2025, according to its due date), cash outflows for treasury share transactions of USD 2.7 billion and cash outflows for purchases of intangible assets of USD 1.2 billion.
As of Q1 2025, the long-term credit rating for the company is Aa3 with Moody’s Ratings and AA- with S&P Global Ratings.
2025 outlook
Barring unforeseen events; growth vs. prior year in cc
Net sales Expected to grow high single-digit
Core operating income Expected to grow low double-digit
Key assumptions:
We assume Tasigna, Promacta and Entresto US generic entry mid-2025 for forecasting purposes
Foreign exchange impact
If late-April exchange rates prevail for the remainder of 2025, the foreign exchange impact for the year would be 0 percentage points on net sales and negative 2 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.
Key figures1
Q1 2025 Q1 2024 % change
USD m USD m USD cc
Net sales to third parties 13 233 11 829 12 15
Operating income 4 663 3 373 38 44
As a % of sales 35.2 28.5
Net income 3 609 2 688 34 37
EPS (USD) 1.83 1.31 40 42
Net cash flows from operating activities 3 645 2 265 61
Non-IFRS measures
Free cash flow 3 391 2 038 66
Core operating income 5 575 4 537 23 27
As a % of sales 42.1 38.4
Core net income 4 482 3 681 22 26
Core EPS (USD) 2.28 1.80 27 31
1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 31 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.
Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below:
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