On January 30, 2019 Novartis reported strong sales growth with core margin expansion, building leading advanced therapy platforms and focusing the company in 2018 (Press release, Novartis, JAN 30, 2019, View Source [SID1234532959])·
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Full year net sales up 5% (cc1, +6% USD) driven by strong performance of growth drivers:
o Pharmaceuticals BU grew 7% (cc) driven by Cosentyx USD 2.8 billion (+36% cc) and Entresto USD 1.0 billion (+102% cc)
o Oncology BU grew 9% (cc) driven by AAA2 (USD 0.4 billion) including Lutathera, Promacta/Revolade USD 1.2 billion (+35% cc) and Tafinlar + Mekinist USD 1.2 billion (+31% cc)
· Full year core1 operating income grew 8% mainly driven by higher sales and gross margin expansion
· Net income was USD 12.6 billion (+64%) including a USD 5.7 billion net gain from the divestment of OTC JV. Operating income declined 5% mainly due to M&A transactions and restructurings
· Free cash flow1 grew 12% to USD 11.7 billion driven by strong operating cash flows
· Focused the company with transformational deals during 2018:
o Consumer healthcare JV stake divested to GSK for USD 13.0 billion
o Announced proposal to spin-off Alcon Division3; on track for H1 2019
o Sandoz began transformation with reshaping the portfolio4, geographic focus and a leaner cost structure
· Built leading advanced therapy platforms:
o Gene therapy – Acquired AveXis and in-licensed Luxturna
o Radioligand therapy – Acquired AAA and Endocyte
o Cell therapy – Expanding Kymriah global manufacturing including multiple collaborations
· Four additional products reached blockbuster status in 2018; Lutathera, Aimovig and Kymriah for DLBCL were launched; additional ten key launches on track by 2020
· Alcon sales grew 5% (cc, +6% USD) and core operating income grew 10%; expanding core margin
· Sandoz sales down -3% (cc, -2% USD) due to US price pressure; Biopharmaceuticals grew 24% (cc)
· Dividend of CHF 2.85 per share, an increase of 2%, proposed for 2018
· 2019 Group guidance5:
o New focused medicines company6 – Net sales expected to grow mid single digit (cc); core operating income expected to grow mid to high single digit (cc)
o Current Group structure7 – Net sales expected to grow low to mid single digit (cc); core operating income expected to grow mid single digit (cc)