Novartis CEO 'very confident' on sales target, doesn't fear patent cliff - newspaper
ZURICH, Nov 2 (Reuters) -Novartis NOVN.S expects to increase its annual sales by least 5% per year in the coming years, CEO Vas Narasimhan said in an interview on Saturday, with the pharmaceuticals giant having nothing to fear from the end of patent protection on some drugs.
"I am very confident that we will achieve average growth of at least 5% per year until 2028," Narasimhan told Swiss newspaper Finanz und Wirtschaft.
This would be made possible by eight or nine drugs with multi-billion dollar sales, he told the newspaper, although a big challenge will be maintaining the pipeline of new medications.
Narasimhan said he was confident the company would reach its growth target despite the imminent expiry of patents on some medications including Entresto used to treat heart failure.
"We also expect sales and profit growth for 2025. We will announce a specific forecast in January," said Narasimhan, who has led Novartis since 2018.
"In the past, the expiry of major patents in our industry has often led to declining sales, but this is not to be feared at Novartis."
The company will not, however, increase its core operating profit margin much beyond the current level of 40.1%, Narasimhan said.
"I consider a margin in the low 40% range to be sufficient - higher margins are generally not rewarded in the pharmaceutical industry as they come at the expense of investments in research, development and sales growth," he said.
Novartis will also consider acquisitions, with a focus on bolt-on deals worth less than $1 billion.
"Of course, we will continue to look for deals of up to $10 billion or more," Narasimhan said. "However, our analysis shows that the track record of such deals in the sector has historically been rather poor."
Reporting by John Revill; editing by Jason Neely
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
