Novartis Chief Executive Officer Vas Narasimhan said 2018 was a year of reimagining for Switzerland-based Novartis. It was a year when the company focused its capital and resourced on developing breakthrough medicines.
lucarista / Shutterstock.com
Novartis Chief Executive Officer Vas Narasimhan said 2018 was a year of reimagining for Switzerland-based Novartis. It was a year when the company focused its capital and resourced on developing breakthrough medicines.
Despite Narasimhan’s characterizing 2018 as a transformative year for the company, Novartis saw net sales increase by 5 percent and full-year core-operating income increase by 8 percent. Those sales numbers included revenues of $13.3 billion for the final three months of 2018. Those increases were driven by strong performance from its core products, including Cosentyx, Entresto and Lutathera. Also, the company noted that future revenue streams are likely to come this year and well into the future due to the strategies the company implemented over the past year. Some of those strategies included the divestment of its consumer health business to GlaxoSmithKline for $13 billion and its move into gene therapies, with the $8.7 billion acquisition of AveXis and its in-licensing deal for Spark Therapeutics’ gene therapy Luxturna. Additionally, the company also made inroads in radioligand therapy, with its acquisitions of Advanced Accelerator Applications and Endocyte.
“Looking ahead, we expect to sustain top and bottom line growth driven by the strength of our in-line brands and our exciting lineup of 10 potential blockbuster launches by 2020,” Narasimhan said in a statement as the company delivered its year-end report.
Narasimhan said the company’s long-term strategy for growth centers on five priorities – an embracing of operational excellence, delivering transformative innovation, going big on data and digital, building trust with society, and building a new culture by “unleashing the power of our people.”
Novartis said it anticipates an increase of single-digit sales growth in its new medicines. However, Narasimhan also noted that the company will likely have to cut prices on some of its older drugs, particularly as pharmaceuticals are under intense scrutiny in the U.S. over pricing practices. On a conference call with reporters, Narasimhan said he expected Novartis’s net prices to decline by a low-single-digit percentage this year, The Wall Street Journal reported.
“We continue to see the need for increased rebates, particularly in the U.S., across our portfolio,” Narasimhan said, according to the Journal.
Narasimhan said the company will systematically integrate access strategies in our research and development efforts and we are working to develop innovative treatments for under-treated diseases.
During the fourth quarter, the company noted that the $13.3 billion in revenue was “partly offset” by the negative impacts of pricing and generic competition. Those two factors cost the company about 3 percent growth, according to its report.
As it looks forward to 2019, Novartis is eying continued growth, in part due to its 2018 strategies. One factor for potential growth will be the potential approval of a gene therapy for spinal muscular atrophy (SMA), a fatal genetic disease marked by progressive, debilitating muscle weakness in infants and toddlers. Novartis’ gene therapy Zolgensma is expected to be approved by the FDA this year and could have a price tag of between $4 and $5 million. While significantly high, non-profit SMA groups have already suggested that the gene therapy treatment could be more cost-effective than Spinraza, the only approved SMA treatment on the market.
The company is also eying three potential blockbuster drugs in Lutathera, Aimovig and Kymriah, which were all launched in 2018.
