Novartis trims sales outlook after hit from Covid disruptions
The group's net income fell 4 percent to $1.9 billion, with sales down 1 percent at $11.35 billion for the three months to June 30
Novartis CEO Vas Narasimhan cut the Swiss drugmaker's 2020 sales forecast on Tuesday after Covid-19 disruptions that kept patients from visiting their doctor or hospital hit the company's second-quarter revenue.
By contrast, rival drugs group Johnson & Johnson has increased 2020 forecasts as its mix of products helped to cushion a hit from the coronavirus crisis.
Cancer therapy Lutathera and eye drugs Lucentis and Xiidra, for which Novartis paid $3.4 billion to Takeda last year, all saw sales contract as patients avoided trips to the doctor. Sales at generics unit Sandoz slipped 9 percent.
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The group's net income fell 4 percent to $1.9 billion, with sales down 1 percent at $11.35 billion for the three months to June 30.
Narasimhan said Novartis now expected only mid-single-digit percentage sales growth this year, from previous expectations of mid- to high-single-digit percentage growth.
Novartis has been largely left out of the current race for new Covid-19 medicines or vaccines, having unloaded its vaccines business in 2014.
Narasimhan said selling the vaccines business, where he once led development, had left Novartis out of the Covid-19 prevention race. He also said the company is doing research on new antivirals he hopes could be deployed during this pandemic or future ones.
"We saw that we don't currently have the vaccine in know-how and capabilities inside the company, but we have deep expertise in anti-viral drug development," Narasimhan said.
Novartis has tested older medicines, including generic malaria drug hydroxychloroquine, against the new coronavirus.
It abandoned that study, after failing to recruit enough participants.
In addition to its absence from the Covid-19 vaccine race, Novartis' recent payments of $1.1 billion to settle corruption cases have weighed on investor sentiment, analysts at Zuercher Kantonalbank said.
This year, Novartis shares have fallen by more than 10 percent, including Tuesday's 1 percent drop at 1300 GMT.
