Novartis raises guidance after beating Q1 expectations
Adds analyst comment, shares in paragraphs 6-7
By Ludwig Burger
FRANKFURT, April 23 (Reuters) -Swiss drugmaker Novartis NOVN.S raised its full-year guidance on wider use of psoriasis and arthritis drug Cosentyx on Tuesday and said it had tapped the former boss of Bristol Myers Squibb (BMS) to become its chairman next year.
It expects its 2024 net sales to grow by a high-single to low double-digit percentage with adjusted operating income growing by a low double-digit to mid-teens percentage, Novartis said in a statement.
It has previously predicted that adjusted operating income would increase by a "high single-digit" percentage with "mid single-digit" sales growth.
A newly approved use of Cosentyx to treat hidradenitis suppurativa, a painful and scarring acne-like skin condition, has seen swift uptake, and a new intravenous infusion option, an alternative to more frequent shots under the skin, also boosted demand, finance chief Harry Kirsch said.
"The new launch in the U.S. and Europe was much better than expected," he said on a media call.
Novartis shares were up 4.6% at a two-month high at 0713 GMT.
"We'd been expecting a strong quarter from Novartis to kick off (first-quarter European) pharma reporting and that's precisely what we saw this morning," Barclays analysts said in a note.
Novartis said other key growth drivers in the quarter included heart failure drug Entresto, which will lose patent protection next year and multiple sclerosis drug Kesimpta.
Quarterly adjusted operating income gained 16% to $4.54 billion, beating an average analyst estimate of about $4.3 billion. Revenue climbed 10% to a better-than-expected $11.83 billion.
The company said former BMS CEO Giovanni Caforio would be proposed as chair of the board of directors at its 2025 annual shareholders meeting as incumbent Joerg Reinhardt will not run again after 12 years in office, in line with the group's tenure limits.
CEO Vas Narasimhan previously led a push to cut jobs and costs, part of a focus on fewer therapeutic areas and geographic markets. He also had generic drugs business Sandoz SDZ.S spun off and listed late last year.
But his focus has recently shifted again to drug development. He has also been active on the deals front, agreeing to pay up to $1.01 billion, depending on achievements, for an experimental prostate cancer drug by Arvinas ARVN.O, betting on a technology that lets disease-causing proteins disintegrate.
In February, Novartis signed a deal to acquire MorphoSys MORG.DE, a developer of cancer treatments, for 2.7 billion euros ($2.9 billion), adding a promising rare bone-marrow cancer treatment candidate to its portfolio.
Kirsch said the group continues to look for deals worth less than $5 billion that underpin the group's preferred therapeutic focus areas.
Reporting by Ludwig Burger, editing by Lincoln Feast and Jason Neely
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