Novartis reported drop in Q3 income by 23% mainly due to higher impairments and higher restructuring costs. Net income declined by 33%, or27% excluding the impact of Roche income. Free cash flow was USD 4.2 billion (-6% USD.)

However, Q3 core operating income grew +5% mainly driven by higher sales, with IM core margin increasing to 38.1%.

Innovative Medicines (IM) sales grew +4% driven by key growth brands including: Entresto (+31% cc), Kesimpta (+172% cc), Kisqali (+49% cc), Cosentyx (+7% cc) and Pluvicto (reaching USD 80 million). Sandoz sales grew +4% cc (-7% USD) driven by continued growth in biopharmaceuticals

Iptacopan demonstrates clinically meaningful superiority vs anti-C5 treatment in Ph3 PNH study (Oct). Cosentyx positive results from pivotal Ph3 trials (SUNSHINE and SUNRISE) in hidradenitis suppurativa

2022 Group guidance confirmed at mid-single digit sales and core operating income growth. Sandoz guidance revised upwards, with sales expected to grow low to mid-single digit (from low single digit) and core operating income expected to grow low single digit (from broadly in line)3 

commenting on the quarter, Vas Narasimhan MD, CEO of Novartis, said: “Novartis delivered a solid third quarter, with strong YTD operational performance. Our six in-market growth drivers with multi-billion sales potential (Cosentyx, Entresto, Zolgensma, Kisqali, Kesimpta, Leqvio) grew 23% in the quarter and now represent 33% of total IM sales. Pluvicto and Scemblix launches are progressing well and we are awaiting data in earlier lines of therapy. We announced the planned separation of Sandoz by way of a 100% spin-off, creating the #1 European generics company and a global leader in biosimilars. Looking ahead, we are confident in delivering growth and margin expansion through our new focused “pure-play” Innovative Medicines strategy, underpinned by our five core TAs, technology platforms, priority geographies and a deep, value-oriented pipeline.”

Novartis unveiled a new focused strategy with our transformation into a “pure-play” Innovative Medicines business. We have a clear focus on five core therapeutic areas (cardiovascular, immunology, neuroscience, solid tumors and hematology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy, and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies - the US, China, Germany and Japan.

Novartis also concluded the strategic review of Sandoz, announcing a proposed 100% spin-off of Sandoz, its generics and biosimilars division into a new publicly traded standalone company. We believe that the 100% spin-off is in the best interest of shareholders and consistent with the Novartis strategy of focusing as a leading medicines company. The planned spin-off allows Sandoz to leverage its strong brand and sustain its leading global position by continuing to invest in the key strategic areas of Biosimilars, Antibiotics and Generic Medicines. Completion of the transaction is subject to certain conditions, including consultation with works councils and employee representatives (as required), general market conditions, tax rulings and opinions, final Board of Directors endorsement and shareholder approval in line with Swiss corporate law. The transaction is expected to be tax neutral to Novartis.