Novartis CEO warns reality of Trump's drug pricing policy will set in over 'the next 18 months'
Novartis reported lower-than-expected first-quarter sales of $13.1 billion, missing analyst estimates due to a sharp decline in sales of its top drugs following patent expirations. CEO Vas Narasimhan attributed the drop to the largest loss of exclusivity in the company's history, particularly affecting Entresto, which saw a 42% sales decline. Earnings per share fell 10% year-on-year to $1.65, though growth in newer drugs like Kisqali and Kesimpta provided partial offset. The company expects improved performance in the second half of the year.
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The Swiss company posted first-quarter sales of $13.1 billion, below the $13.5 billion expected by analysts polled by FactSet and reflecting a 1% decline year-on-year. Sales declined by 5% on a constant currency basis. Earnings per share came in at $1.65, down 10% year-on-year. The miss was driven by faster-than-expected generic erosion of the company's best-selling medicines Entresto, Promacta, and Tasigna, which each missed by between 7% and 17%, according to Citi analysts. The sales decline was only partially offset by the growth of newer medicines like breast cancer treatment Kisqali and multiple sclerosis drug Kesimpta.Sales of heart drug Entresto fell 42% after its U.S. patent expired. It faces loss of exclusivities in Europe later this year. "We guided to a first half that was going to be challenging — we knew these generics were coming. It's actually the biggest loss of exclusivity in Novartis' history," Narasimhan said.Novartis has guided for a pickup in growth over the second half of the year.
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