Novartis Increases Annual Forecast
On April 29, 2025, Novartis raised its forecast for the full year for the ninth consecutive quarter after the pharmaceutical company reported a revenue of $13.2 billion in the first quarter (+12% nominal, +15% at constant exchange rates). The adjustment pertains to both revenue and operating profit and underscores the company’s continuing momentum.
Key Factors for the Forecast Increase
- Driver Products:
- Entresto (heart failure): $2.3 billion in Q1 revenue
- Kisqali (breast cancer), Kesimpta (multiple sclerosis), Cosentyx (psoriasis), and Leqvio (cholesterol)
- Operating Performance: Core operating profit rose to nearly $4.7 billion in Q1 (+3%), with an increase now expected for the full year in the “low double-digit percentage range.”
Adjusted Annual Forecasts
| Key Figure | New Forecast | Previous Forecast |
|---|---|---|
| Revenue Growth | High single-digit percentage range | Mid to high single-digit range |
| Core Operating Profit | Low double-digit growth (%) | High single-digit to low double-digit range |
Risks and Challenges
- Generic Competition: Generic versions of Entresto, Tasigna, and Promacta are expected in the U.S. by mid-2025. This could strain margin dynamics.
- Foreign Exchange Effects: Despite adjustments for constant rates, currency risk remains relevant – the current figures already show a difference between nominal (+12%) and constant currency growth (+15%).
Significance for Investors
The repeated forecast increases signal a consistent outperformance of expectations, which typically leads to positive stock price reactions. The focus on high-priced specialty drugs also enhances long-term earnings quality. However, analysts are likely to pay increased attention to the effects of the introduction of generics in the future – particularly for Entresto, which accounted for approximately 17% of Q1 revenue.