Novartis Q3 profit swells as oncology drugs drive growth

[Novartis]
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Novartis (NYSE:NVS [https://seekingalpha.com/symbol/NVS]) reported a solid profit increase last quarter, driven by strong demand for its new cancer drugs.

Core operating profit rose 6% Y/Y to $5.5 billion in the third quarter, roughly in line with analyst expectations. Growth was fueled by key oncology treatments, including Kisqali for breast cancer, Pluvicto for prostate cancer, and Scemblix for leukemia.

Kisqali generated $1.33 billion (+68% constant currency) in sales, followed by Kesimpta at $1.22 billion (+44%), Pluvicto at $564 million (+45%), and Scemblix at $358 million (+95%).

However, core EPS of $2.25 fell short [https://seekingalpha.com/news/4509089-novartis-reports-mixed-q3-results-reaffirms-fy25-outlook] of Wall Street estimates by $0.06. Net sales topped estimates, up 8% Y/Y to $13.9 billion, with volume contributing 16 percentage points to growth. However, growth was partly offset by a 7% hit from generic competition, mainly affecting Promacta, Tasigna, and Entresto in the U.S.

Looking ahead, the drugmaker reaffirmed its full-year 2025 outlook, with sales expected to grow high single-digit and core operating income expected to grow low-teen

Commenting on Q3 results, CEO Vas Narasimhan said: “Novartis delivered solid financial performance in Q3, more than offsetting the impact of increasing generic erosion in the US. Our key growth drivers performed well, including Kisqali, Kesimpta, Pluvicto and Scemblix. [….] We remain well on track to achieve our guidance for 2025 and over the mid-term."

The Swiss pharmaceutical giant is racing to replenish its pipeline as three major drugs, including its blockbuster heart drug Entresto, face generic competition this year. To offset these losses, Novartis is expanding in cancer and autoimmune therapies and ramping up acquisitions.

Just days ago, the company announced its largest deal in over a decade, agreeing to acquire Avidity Biosciences (RNA [https://seekingalpha.com/symbol/RNA]) for $12 billion. The U.S. biotech brings a promising RNA-based drug portfolio targeting conditions such as myotonic dystrophy, with two potential blockbusters expected before 2030.

Last month, Novartis also struck a $1.4 billion deal to acquire Tourmaline Bio (TRML [https://seekingalpha.com/symbol/TRML]), gaining a treatment aimed at reducing systemic inflammation — a key factor in cardiovascular disease. The move came shortly after Entresto’s U.S. patent expiry.

NYSE-listed shares of Novartis (NYSE:NVS [https://seekingalpha.com/symbol/NVS]) fell 3.2% premarket on Tuesday.

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