TIDMNOVN
-- Continuing operations2 net sales up 13% (cc1, +10% USD) driven by:
-- Cosentyx sales of USD 937 million (+27% cc), with strong demand
across indications and regions
-- Entresto USD 430 million (+61% cc), with increased demand in
hospital and ambulatory settings
-- Zolgensma sales of USD 160 million, strong launch including broad
access
-- Lutathera sales grew to USD 119 million, total AAA sales were USD
177 million
-- Piqray sales were USD 43 million, off to a strong start in the US
-- Sandoz sales grew 5% (cc, +3% USD), mainly driven by
Biopharmaceuticals
-- Core operating income grew 18% (cc, +15% USD) and Innovative Medicines
core margin improved to 34.1% of sales, mainly driven by sales momentum
and productivity, while funding growth investments
-- Net income from continuing operations was USD 2.0 billion, up 12% (cc,
+8% USD)
-- Free cash flow1 grew 26% to USD 4.0 billion, mainly driven by higher cash
flows from operating activities
-- Significant innovation milestones:
-- Beovu (brolucizumab) launched in the US in October for treatment
of neovascular (wet) AMD, differentiated based on greater fluid
reduction and potential for fewer injections
-- Ofatumumab treatment for RMS showed compelling efficacy across all
major clinical endpoints in two pivotal Phase III trials. Rolling
regulatory submissions planned to start in Q4
-- Cosentyx met primary endpoints in nr-axSpA at weeks 16 and 52
(PREVENT study); submitted to EMA, FDA submission planned for Q4
-- Kisqali showed overall survival (OS) benefit in postmenopausal
women (MONALEESA-3), and is now the only CDK4/6 to show an OS
benefit in two trials and in pre and post-menopausal women
-- Entresto PARAGON showed clinically important benefit in HFpEF
subpopulations, planned to submit to FDA in Q4 for inclusion of
data in the label
-- 2019 guidance increased for new focused medicines company3 - sales
expected to grow high single digit (cc), core operating income expected
to grow mid to high teens (cc)
Basel, October 22, 2019 -- Commenting on the results, Vas Narasimhan,
CEO of Novartis, said:
"Novartis continued its excellent performance this quarter with double
digit increases in sales and core operating income with growing margins.
We increased our full year sales and core operating income guidance with
growth continuing in both Innovative Medicines and Sandoz. Zolgensma and
Piqray launched with strong momentum and Beovu just launched with a
clearly differentiated label. We also continue our innovation
performance with a number of positive milestones highlighted by
Ofatumumab's remarkable efficacy in RMS with the potential to be the
first self-administered, subcutaneous, B-cell therapy."
Continuing operations(2)
---------------------------------------------------------
Q3 Q3
Key figures(1) 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ -------- ------- ------- -------- ---
Net sales 12 172 11 016 10 13 35 042 33 270 5 9
Operating
income 2 358 2 239 5 9 7 263 7 041 3 10
Net income 2 041 1 882 8 12 6 018 11 580 -48 -45
EPS (USD) 0.90 0.81 11 14 2.62 4.99 -47 -44
Free cash flow 3 968 3 156 26 9 449 8 343 13
Core operating
income 3 748 3 258 15 18 10 650 9 445 13 18
Core net income 3 212 2 820 14 17 9 119 8 239 11 16
Core EPS (USD) 1.41 1.22 16 19 3.97 3.55 12 17
------ ------ -------- ------- ------- -------- ---
(1) Constant currencies (cc), core results and free cash flow are
non-IFRS measures. An explanation of non-IFRS measures can be found on
page 56 of the Condensed Interim Financial Report. Unless otherwise
noted, all growth rates in this Release refer to same period in prior
year. (2) Refers to continuing operations as defined on page 44 of the
Condensed Interim Financial Report, excludes Alcon, includes the
businesses of Innovative Medicines and Sandoz (including the US generic
oral solids and dermatology portfolio), as well as the continuing
corporate functions. (3) Removes Alcon and the Sandoz US dermatology and
oral solids portfolio from both 2019 and 2018. Forecast assumption that
no Gilenya generics enter in 2019 in the US.
Financials
In order to comply with International Financial Reporting Standards
(IFRS), Novartis has separated the Group's reported financial data for
the current and prior years into "continuing" and "discontinued"
operations. The results of the Alcon business are reported as
discontinued operations. See page 44 and Notes 2, 3 and 11 in the
Condensed Interim Financial Report for a full explanation.
The commentary below focuses on continuing operations including the
businesses of Innovative Medicines and Sandoz (including the US generic
oral solids and dermatology portfolio), as well as the continuing
Corporate functions. We also provide information on discontinued
operations.
Continuing operations third quarter
Net sales were USD 12.2 billion (+10%, +13% cc) in the third quarter
driven by volume growth of 16 percentage points (cc), mainly from
Cosentyx, Entresto, Zolgensma and the Xiidra acquisition. Strong volume
growth was partly offset by the negative impacts of pricing (-2
percentage points cc) and generic competition (-1 percentage point cc).
Operating income was USD 2.4 billion (+5%, +9% cc) mainly driven by
higher sales and productivity, partly offset by growth investments,
lower divestments and higher amortization.
Net income was USD 2.0 billion (+8%, +12% cc) driven by higher operating
income and higher income from associated companies. EPS was USD 0.90
(+11%, +14% cc), growing faster than net income driven by lower weighted
average number of shares outstanding.
Core operating income was USD 3.7 billion (+15%, +18% cc) mainly driven
by higher sales and productivity programs, partly offset by growth
investments. Core operating income margin was 30.8% of net sales,
increasing by 1.2 percentage points (+1.4 percentage points cc).
Core net income was USD 3.2 billion (+14%, +17% cc) driven by growth in
core operating income. Core EPS was USD 1.41 (+16%, +19% cc) growing
faster than core net income driven by lower weighted average number of
shares outstanding.
Free cash flow from continuing operations amounted to USD 4.0 billion
(+26% USD) compared to USD 3.2 billion in prior year, mainly driven by
higher net cash flows from operating activities.
Innovative Medicines net sales were USD 9.7 billion (+13%, +15% cc) in
the third quarter. Pharmaceuticals BU sales grew 15% (cc), driven by
continuing momentum on Cosentyx and Entresto and the benefit from the
first full quarter of sales from Zolgensma and Xiidra. Oncology BU grew
14% (cc) driven by continuing momentum on Promacta/Revolade, Tafinlar +
Mekinist and Kisqali and the benefit from launches including, Lutathera,
Kymriah and Piqray. Volume contributed 17 percentage points to sales
growth. Generic competition had a negative impact of 1 percentage point.
Net pricing had a negative impact of 1 percentage point.
Sandoz net sales were USD 2.5 billion (+3%, +5% cc) driven by volume
growth of 9 percentage points (cc) partially offset by 4 percentage
points (cc) of price erosion. Excluding the US, net sales grew 7% (cc)
driven by Biopharmaceuticals in Europe. US sales were broadly in line
with prior year as the continued industry-wide pricing pressure was
mostly offset by first-to-market retail launches.
Novartis continues to expect the previously-announced divestment of the
Sandoz US oral solids and dermatology portfolio to be completed in the
coming months, pending regulatory approval. Novartis remains fully
committed to this business until it is divested to Aurobindo. The
results of this business are included in continuing operations.
Continuing operations nine months
Net sales were USD 35.0 billion (+5%, +9% cc) in the first nine months
driven by volume growth of 12 percentage points (cc), mainly from
Cosentyx, Entresto and Lutathera. Strong volume growth was partly offset
by the negative impacts of pricing (-2 percentage points cc) and generic
competition (-1 percentage point cc).
Operating income was USD 7.3 billion (+3%, +10% cc) mainly driven by
higher sales, improved gross margin and productivity programs, partly
offset by growth investments, legal provisions and higher restructuring
charges.
Net income was USD 6.0 billion (-48%, -45% cc) as prior year benefited
from a USD 5.7 billion net gain recognized from the sale of our stake in
the GSK consumer healthcare joint venture. EPS was USD 2.62 (-47%, -44%
cc) benefitting from lower weighted average number of shares
outstanding.
Core operating income was USD 10.7 billion (+13%, +18% cc) mainly driven
by higher sales, improved gross margin and productivity programs, partly
offset by growth investments. Core operating income margin was 30.4% of
net sales, increasing by 2.0 percentage points (+2.4 percentage points
cc).
Core net income was USD 9.1 billion (+11%, +16% cc) driven by growth in
core operating income partly offset by the discontinuation of core
income from the GSK consumer healthcare joint venture. Core EPS was USD
3.97 (+12%, +17% cc) growing faster than core net income driven by lower
weighted average number of shares outstanding.
Free cash flow from continuing operations amounted to USD 9.4 billion
(+13% USD) compared to USD 8.3 billion in prior year. The increase is
mainly driven by higher operating income adjusted for non-cash items and
higher real estate divestment proceeds, partly offset by higher working
capital, which in prior year included the receipt of a GSK sales
milestone from the divested Vaccines business of USD 0.4 billion, and
lower dividends received from associated companies, as prior year
included the GSK consumer healthcare joint venture which was divested in
Q2 2018.
Innovative Medicines delivered net sales of USD 27.8 billion (+7%, +11%
cc) in the first nine months. Pharmaceuticals BU grew 12% (cc) driven by
Cosentyx reaching USD 2.6 billion and Entresto USD 1.2 billion. Oncology
BU grew 11% (cc) driven by AAA including Lutathera, as well as
Promacta/Revolade, Tafinlar + Mekinist and Kisqali. Volume contributed
13 percentage points to sales growth. Generic competition had a negative
impact of 1 percentage point. Net pricing had a negative impact of 1
percentage point.
Sandoz net sales were USD 7.2 billion (-2%, +2% cc) driven by volume
growth of 9 percentage points (cc) partially offset by 7 percentage
points (cc) of price erosion, mainly in the US. Excluding the US, net
sales grew 6% (cc). Global sales of Biopharmaceuticals grew 18% (cc),
driven by continued strong double-digit growth in Europe from Hyrimoz
(adalimumab), Rixathon (rituximab), and Erelzi (etanercept).
Discontinued operations
Discontinued operations include the business of Alcon and certain
Corporate costs directly attributable to Alcon up to the spin-off date.
As the Alcon spin-off was completed on April 9, 2019, there were no
operating results in the third quarter of 2019.
Discontinued operations net sales in the first nine months of 2019 were
USD 1.8 billion compared to USD 5.4 billion in 2018 and operating income
amounted to USD 71 million compared to an operating loss of USD 171
million in 2018. Net income from discontinued operations in the first
nine months of 2019 amounted to USD 4.6 billion compared to a net loss
of USD 160 million in 2018 driven by the non-taxable non-cash net gain
on distribution of Alcon Inc. to Novartis AG shareholders which amounted
to USD 4.7 billion. For further details see Note 3 of the Condensed
Interim Financial Report, "Significant transactions -- Completion of the
spin-off of the Alcon business through a dividend in kind distribution
to Novartis AG shareholders".
Total Group third quarter
For the total Group, net income amounted to USD 2.0 billion compared to
USD 1.6 billion in prior year, and basic earnings per share was USD 0.90
compared to USD 0.70 in prior year. Cash flow from operating activities
for the total Group amounted to USD 4.6 billion and free cash flow to
USD 4.0 billion.
Total Group nine months
For the total Group, net income amounted to USD 10.6 billion compared to
USD 11.4 billion in prior year, and basic earnings per share was USD
4.62 compared to USD 4.92 in prior year. Cash flow from operating
activities for the total Group amounted to USD 10.1 billion and free
cash flow to USD 9.4 billion.
Key growth drivers (Q3 performance)
Underpinning our financial results in the third quarter is a continued
focus on key growth drivers including:
-- Cosentyx (USD 937 million, +27% cc) continued momentum in the US (+31%)
and in the rest of the world (+20% cc), driven by strong demand across
indications and regions and strong first line access in all three
indications.
-- Entresto (USD 430 million, +61% cc) continued strong momentum fueled by
increased demand in both hospital and ambulatory settings across regions.
-- Zolgensma (USD 160 million) since its US launch, Zolgensma has been used
to treat patients ranging in age from less than one month to two years
old including all types of SMA. To date plans are in place covering 90%
of commercial patients and 30% of Medicaid patients.
-- Lutathera (USD 119 million, +116% cc) continued to grow led by the US,
with over 160 centers actively treating patients, and ongoing launches in
EU. Sales from all AAA brands were USD 177 million.
-- Promacta/Revolade (USD 380 million, +31% cc) continued to grow at a
strong double-digit rate across all regions driven by increased use in
chronic immune thrombocytopenia (ITP) and further uptake as first-line
treatment for severe aplastic anemia (SAA) in the US and Japan.
-- Tafinlar + Mekinist (USD 345 million, +22% cc) continued strong
double-digit growth due to demand in metastatic and adjuvant melanoma as
well as NSCLC, with ongoing uptake of the adjuvant melanoma indication in
Europe.
-- Jakavi (USD 279 million, +17% cc) continued double-digit growth across
all regions driven by demand in the myelofibrosis and polycythemia vera
indications.
-- Kisqali (USD 123 million, +76% cc) showed strong growth driven by use in
metastatic breast cancer patients, independent of menopausal status or
combination partner.
-- Piqray (USD 43 million) US launch progressed well. Piqray is the first
and only treatment for patients with a PIK3CA mutation in HR+/HER2-
advanced breast cancer.
-- Kymriah (USD 79 million) strong demand continued and sales increased
primarily driven by ongoing uptake in the US and Europe. There are over
160 qualified treatment centers and more than 20 countries worldwide that
have coverage for at least one indication.
-- Mayzent (USD 4 million) launch is progressing and efforts are ongoing to
improve patient on-boarding which was slower due to the special needs of
this population.
-- Biopharmaceuticals (biosimilars, biopharmaceutical contract manufacturing
and Glatopa) Global sales of Biopharmaceuticals grew 27% (cc), driven by
continued strong double-digit growth in Europe from Rixathon (rituximab),
Hyrimoz (adalimumab) and Erelzi (etanercept).
-- Emerging Growth Markets, which comprise all markets except the US, Canada,
Western Europe, Japan, Australia and New Zealand, sales grew 10% in cc
(+7% in USD), mainly driven by double digit growth (cc) in China.
Net sales of the top 20 Innovative Medicines products in 9M 2019
% change % change
------- -------
Q3 2019 9M 2019
USD m USD cc USD m USD cc
------- ----- ---- ------- ----- ----
Cosentyx 937 25 27 2 586 27 30
Gilenya 829 1 3 2 420 -3 0
Lucentis 500 2 5 1 569 3 8
Tasigna 487 10 11 1 389 -1 2
Entresto 430 59 61 1 208 70 75
Sandostatin 388 0 1 1 183 0 2
Afinitor/Votubia 400 7 8 1 174 1 4
Promacta/Revolade 380 29 31 1 036 23 26
Tafinlar + Mekinist 345 19 22 982 17 22
Galvus Group 320 4 5 955 0 5
Gleevec/Glivec 320 -16 -14 950 -20 -17
Xolair 299 17 22 870 13 20
Jakavi 279 13 17 821 14 21
Diovan Group 254 0 3 798 5 11
Exforge Group 249 -2 2 780 4 10
Exjade/Jadenu 253 -4 -2 744 -8 -6
Votrient 198 1 2 578 -8 -5
Ilaris 177 26 27 493 24 28
Zortress/Certican 122 2 5 362 5 10
Lutathera 119 113 116 334 288 287
Top 20 products total 7 286 10 13 21 232 8 12
Strengthen R&D - Key developments from the third quarter
New approvals and regulatory update
-- Beovu (brolucizumab, formerly RTH258) was launched in the US following
FDA approval in October, offering neovascular (wet) AMD patients vision
gains and greater fluid reductions vs aflibercept. Beovu demonstrated
greater reductions in central subfield thickness, a key indicator of
fluid in the retina. Beovu is the only anti-VEGF in wet AMD recommended
to maintain eligible patients on up to three-month dosing intervals
immediately after the loading phase with no compromise in efficacy.
-- Entresto was approved by FDA for the treatment of symptomatic heart
failure with systemic left ventricular systolic dysfunction in children
aged 1 year and older.
-- Gilenya was approved in China for relapsing forms of multiple sclerosis
(RMS) for adults and children 10 years and older. MS is categorized as
rare disease in China with an estimated 30,000 patients.
Regulatory submissions and filings
--Capmatinib (INC280) was granted FDA Breakthrough Therapy Designation
as a first-line treatment for patients with metastatic MET exon14
skipping-mutated non-small cell lung cancer (NSCLC). Novartis plans to
file with FDA in Q4.
Results from ongoing trials and other highlights
-- Ofatumumab (OMB157) is a subcutaneous, potent, fully-human monoclonal
antibody targeting CD20 positive B-cells, delivering remarkable efficacy
with a favorable safety profile. RMS patients on ofatumumab had a
reduction in annualized relapse rate of 50.5% (0.11 vs. 0.22) and 58.5%
(0.10 vs. 0.25) compared to teriflunomide in two head-to-head Phase III
RMS studies (ASCLEPIOS I and II). Ofatumumab also showed significant
reductions in 3 and 6 month confirmed disability worsening and acute
focal MRI activity versus teriflunomide. These data will form the bases
of rolling submissions planned to start in Q4.
-- Cosentyx PREVENT trial in patients with active non-radiographic axial
spondyloarthritis (nr-axSpA) met both 16-week and 52-week primary
endpoints of ASAS40. Novartis has submitted the data to EMA and plans to
submit to the FDA. If approved, Nr-axSpA would be the fourth indication
for Cosentyx.
-- Kisqali MONALEESA-3 overall survival data were presented at ESMO in
postmenopausal women with HR+/HER2- advanced breast cancer. This follows
positive OS data from MONALEESA-7 in pre-menopausal women presented at
ASCO in June. OS benefit proven with multiple combination partners and
the largest number of patients, including post-, pre- and peri-menopausal
patients.
-- QVM149 and QMF149 positive Phase III results announced showing
statistically significant improvement in lung function. Filed with EMA in
Q2 2019 and in Japan in Q3 2019.
-- Entresto data from PARAGON-HF trial in HFpEF patients showed Entresto
reduced the composite primary endpoint of total (first and recurrent)
heart failure hospitalizations and CV death by 13% versus valsartan,
although narrowly missed statistical significance. The full body of
evidence from the trial suggests that treatment with Entresto may result
in clinically important benefits in particular subgroups. We plan to
submit to FDA in Q4 for inclusion of data in the label. Results from
PROVE-HF trial show significant improvements in measures of cardiac
remodeling at six months and one year in HFrEF patients; EVALUATE-HF
results complement findings.
-- Zolgensma new data were presented at EPNS continuing to show significant
therapeutic benefit in prolonging event-free survival now up to 5 years
of age in patients with SMA type I. Data from the STRONG trial in SMA
type II patients was presented at WMS showing a mean increase of 5.9
points from baseline in HFMSE scores in patients 2 to 5 years of age
following treatment with AVXS-101 IT, nearly double the clinically
meaningful threshold. Zolgensma is currently under regulatory review in
Europe with an anticipated CHMP decision in Q1 2020 and in Japan with
anticipated decision in H1 2020.
-- Fevipiprant (QAW039) ZEAL 1 and 2 trials did not meet the primary
efficacy endpoint of FEV1 improvement in moderate asthmatic patients. The
safety profile was confirmed as clean and placebo like. LUSTER 1 and
2 exacerbation trials in moderate to severe asthmatic patients are the
core registration trials and are on track to read out in Q1 2020.
-- Mayzent new post hoc statistical analysis of the pivotal EXPAND study at
ECTRIMS showed that Mayzent can help patients keep their mobility (i.e.
reduced time to wheel-chair) for over four years longer on
average. Further analyses demonstrate Mayzent significantly reduced grey
matter volume loss at one and two years, a key driver of disability
progression and cognitive decline in patients with SPMS.
-- Aimovig data confirmed long-term efficacy and safety for majority of
patients with episodic migraine. 4.5-year data show 77% of patients who
continued on treatment experienced at least a 50% reduction in monthly
migraine days. Moreover, 33% of patients who continued on treatment
achieved a 100% reduction, and 56% achieved a 75% decrease.
-- Sandoz biosimilar natalizumab worldwide agreement with Polpharma
Biologics gives Sandoz commercialization rights for RRMS. Natalizumab is
the fifth proposed biosimilar in-licensed by Sandoz in the last year,
underscoring commitment to further grow pipeline through collaborations.
Capital structure and net debt
Retaining a good balance between investment in the business, a strong
capital structure and attractive shareholder returns remains a priority.
In Q3 2019, the up to USD 5 billion share buyback was completed with a
total of 55.8 million shares for USD 5.0 billion repurchased since the
announcement in June 2018.
During the first nine months of 2019, Novartis repurchased a total of
60.3 million shares for USD 5.4 billion on the SIX Swiss Exchange second
trading line, including 46.5 million shares (USD 4.2 billion) bought
back under the up to USD 5 billion share buyback and 13.8 million shares
(USD 1.1 billion) to mitigate dilution related to participation plans of
associates. In addition, 1.7 million shares (USD 0.2 billion) were
repurchased from associates. In the same period, 15.4 million shares
(for an equity value of USD 0.9 billion) were delivered as a result of
options exercised and share deliveries related to participation plans of
associates. Consequently, the total number of shares outstanding
decreased by 46.6 million versus December 31, 2018. These treasury share
transactions resulted in a decrease in equity of USD 4.6 billion and a
net cash outflow of USD 5.3 billion.
As of September 30, 2019, net debt increased by USD 3.2 billion to USD
19.4 billion versus December 31, 2018. The increase was mainly driven by
the USD 6.6 billion annual dividend payment, net cash outflow for
treasury share transactions of USD 5.3 billion and M&A transactions of
USD 3.8 billion (mainly the Xiidra acquisition), partly offset by USD
9.4 billion free cash flow from continuing operations during the nine
months of 2019 and USD 2.9 billion net inflows related to the Alcon
spin-off.
As of Q3 2019, the long-term credit rating for the company is A1 with
Moody's Investors Service and AA- with S&P Global Ratings.
2019 Outlook
Barring unforeseen events
New focused medicines company guidance
Excluding Alcon and the Sandoz US oral solids and dermatology business
from both 2018 and 2019
-- Net sales revised upwards: expected to grow high-single digit (cc).
-- From a divisional perspective, we expect net sales performance (cc) in
2019 to be as follows:
-- Innovative Medicines revised upwards: grow high-single digit to
low double digit
-- Sandoz revised upwards: grow low-single digit
-- Core operating income revised upwards: expected to grow mid to high-teens
(cc).
The guidance above includes the forecast assumption that no Gilenya
generics enter in 2019 in the US.
Foreign Exchange impact
If mid-October exchange rates prevail for the remainder of 2019, the
currency impact for the year would be negative 3 percentage points on
net sales and negative 5 percentage points on core operating income. The
estimated impact of exchange rates on our results is provided monthly on
our website.
Nomination for election to the Board of Directors
The Novartis Board of Directors announced today that it is nominating
Dr. Simon Moroney, for election to the Board at the Annual General
Meeting on February 28, 2020. Dr. Moroney is one of the co-founders of
the Germany-based biotechnology company Morphosys and served as it's CEO
until September 1, 2019. Prior to founding Morphosys, Dr.Moroney held
several senior academic positions at the University of Cambridge, U.K.,
University of British Columbia, Canada and ETH in Switzerland. He also
worked at the Harvard Medical School in the United States and was part
of the team at US-based ImmunoGen Inc that pioneered the first
generation of anti-cancer antibody conjugates. Dr. Moroney's deep
scientific knowledge as well as his experience leading and building a
biotechnology company will strengthen the Board's scientific leadership
expertise.
Continuing operations Q3 Q3
(1) 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 12 172 11 016 10 13 35 042 33 270 5 9
Operating income 2 358 2 239 5 9 7 263 7 041 3 10
As a % of sales 19.4 20.3 20.7 21.2
Core operating income 3 748 3 258 15 18 10 650 9 445 13 18
As a % of sales 30.8 29.6 30.4 28.4
Net income 2 041 1 882 8 12 6 018 11 580 -48 -45
EPS (USD) 0.90 0.81 11 14 2.62 4.99 -47 -44
Core net income 3 212 2 820 14 17 9 119 8 239 11 16
Core EPS (USD) 1.41 1.22 16 19 3.97 3.55 12 17
Cash flows from operating
activities 4 562 3 720 23 10 007 9 613 4
Free cash flow 3 968 3 156 26 9 449 8 343 13
------ ------ ---- ------- ------- ----
Q3 Q3
Innovative Medicines 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 9 688 8 596 13 15 27 794 25 870 7 11
Operating income 2 404 2 184 10 13 7 077 6 571 8 14
As a % of sales 24.8 25.4 25.5 25.4
Core operating income 3 300 2 897 14 16 9 528 8 382 14 19
As a % of sales 34.1 33.7 34.3 32.4
-------------------------- ------ ------ ------- -------
Q3 Q3
Sandoz 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 2 484 2 420 3 5 7 248 7 400 -2 2
Operating income 191 358 -47 -42 746 1 095 -32 -25
As a % of sales 7.7 14.8 10.3 14.8
Core operating income 615 541 14 18 1 577 1 520 4 10
As a % of sales 24.8 22.4 21.8 20.5
-------------------------- ------ ------ ------- -------
Q3 Q3
Corporate 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Operating loss -237 -303 22 21 -560 -625 10 8
Core operating loss -167 -180 7 6 -455 -457 0 -2
------ ------ ---- ---- ------- ------- ---- ----
Discontinued operations Q3 Q3
(2) 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 1 763 1 777 5 361 nm nm
Operating income /
loss - 300 71 - 171 nm nm
As a % of sales -17.0 4.0 -3.2
Core operating income 297 350 991 nm nm
As a % of sales 16.8 19.7 18.5
Net income / loss - 258 4 590 - 160 nm nm
------ ------- ------- ---- ----
Q3 Q3
Total Group 2019 2018 % change 9M 2019 9M 2018 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net income 2 041 1 624 26 30 10 608 11 420 -7 -3
EPS (USD) 0.90 0.70 29 32 4.62 4.92 -6 -2
Core net income 3 212 3 064 5 7 9 397 9 057 4 9
Core EPS (USD) 1.41 1.32 7 9 4.09 3.90 5 10
Cash flows from operating
activities 4 562 4 050 13 10 085 10 506 -4
Free cash flow 3 968 3 301 20 9 387 8 778 7
------ ------ ---- ------- ------- ----
nm = not meaningful
(1) Continuing operations include the businesses of Innovative
Medicines and Sandoz Division including the US generic oral solids
and dermatology portfolio and Corporate activities. See page
44 of the Condensed Interim Financial Report for full explanation
(2) Discontinued operations include the business of Alcon. Net
income of discontinued operations for 9M 2019 includes a USD
4.7 billion gain on distribution of Alcon Inc. to Novartis AG
shareholders. See page 44 and Notes 2, 3 and 11 of the Condensed
Interim Financial Report for full explanation
Detailed financial results accompanying this press release are included
in the Condensed Interim Financial Report at the link below:
https://ml-eu.globenewswire.com/Resource/download/54b44cbc-188b-48a6-bf59-7a844c1bcd87/
Disclaimer
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designation," "Orphan designation," "Orphan status," "resubmitted,"
"potentially," "anticipated," "as early as possible," "PRIME designation,
" "Sakigake designation," "underway," "increasing," "in the coming
months," or similar expressions, or by express or implied discussions
regarding potential new products, potential new indications for existing
products, potential product launches, or regarding potential future
revenues from any such products; or regarding the potential outcome, or
financial or other impact on Novartis, of the proposed divestiture of
certain portions of our Sandoz Division business in the US; or regarding
the potential impact of the completion of the up to USD 5 billion share
buyback; or regarding potential future sales or earnings of the Group or
any of its divisions or potential shareholder returns; or by discussions
of strategy, plans, expectations or intentions. Such forward-looking
statements are based on the current beliefs and expectations of
management regarding future events, and are subject to significant known
and unknown risks and uncertainties. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those set forth in
the forward-looking statements. You should not place undue reliance on
these statements. In particular, our expectations could be affected by,
among other things: global trends toward healthcare cost containment,
including ongoing government, payor and general public pricing and
reimbursement pressures and requirements for increased pricing
transparency; regulatory actions or delays or government regulation
generally, including potential regulatory actions or delays with respect
to the proposed transactions or the development of the products
described in this press release; the potential that the proposed
divestiture of certain portions of our Sandoz Division business in the
US may not be completed in the expected time frame, or at all; the
potential that the strategic benefits, synergies or opportunities
expected from the proposed divestiture of certain portions of our Sandoz
Division business in the US, and other transactions described, may not
be realized or may be more difficult or take longer to realize than
expected; the inherent uncertainties involved in predicting shareholder
returns; the uncertainties inherent in the research and development of
new healthcare products, including clinical trial results and additional
analysis of existing clinical data; our ability to obtain or maintain
proprietary intellectual property protection, including the ultimate
extent of the impact on Novartis of the loss of patent protection and
exclusivity on key products that commenced in prior years and will
continue this year; safety, quality or manufacturing issues;
uncertainties involved in the development or adoption of potentially
transformational technologies and business models; uncertainties
regarding actual or potential legal proceedings, including, among others,
product liability litigation, disputes and litigation with business
partners or business collaborators, government investigations generally,
litigation and investigations regarding sales and marketing practices,
and intellectual property disputes; our performance on environmental,
social and governance measures; general political, economic and trade
conditions, including uncertainties regarding the effects of ongoing
instability in various parts of the world; uncertainties regarding
future global exchange rates; uncertainties regarding future demand for
our products; uncertainties regarding potential significant breaches of
data security or data privacy, or disruptions of our information
technology systems; and other risks and factors referred to in Novartis
AG's current Form 20-F on file with the US Securities and Exchange
Commission. Novartis is providing the information in this press release
as of this date and does not undertake any obligation to update any
forward-looking statements as a result of new information, future events
or otherwise.
All product names appearing in italics are trademarks owned by or
licensed to Novartis Group companies.
About Novartis
Novartis is reimagining medicine to improve and extend people's lives.
As a leading global medicines company, we use innovative science and
digital technologies to create transformative treatments in areas of
great medical need. In our quest to find new medicines, we consistently
rank among the world's top companies investing in research and
development. Novartis products reach more than 750 million people
globally and we are finding innovative ways to expand access to our
latest treatments. About 109,000 people of more than 140 nationalities
work at Novartis around the world. Find out more at.
http://www.novartis.com www.novartis.com
Novartis will conduct a conference call with investors to discuss this
news release today at 14:00 Central European time and 8:00 Eastern Time.
A simultaneous webcast of the call for investors and other interested
parties may be accessed by visiting the Novartis website. A replay will
be available after the live webcast by visiting.
https://www.novartis.com/investors/event-calendar
https://www.novartis.com/investors/event-calendar
Detailed financial results accompanying this press release are included
in the condensed interim financial report at the link below. Additional
information is provided on Novartis divisions and pipeline of selected
compounds in late stage development and a copy of today's earnings call
presentation can be found at.
https://www.novartis.com/investors/event-calendar
https://www.novartis.com/investors/event-calendar
Important dates
December 5, 2019 R&D update 2019 -- London
January 29, 2020 Fourth quarter and Full Year results 2019
April 28, 2020 First quarter results 2020
July 21, 2020 Second quarter results 2020
October 27, 2020 Third quarter results 2020
Please find full media release in English attached and on the following
link: Media release (PDF)
https://ml-eu.globenewswire.com/Resource/download/7ec3eab1-368b-406e-8329-df89c192ef52/
Further language versions are available through the following links:
German version is available through the following link: Medienmitteilung
(PDF)
https://ml-eu.globenewswire.com/Resource/download/9508f4aa-9ba3-4570-b3ca-72491fbc38fa/
French version is available through the following link: Communiqué
aux médias (PDF)
https://ml-eu.globenewswire.com/Resource/download/0b5a76c0-3891-4b30-9257-4f813d35eea2/
(END) Dow Jones Newswires
October 22, 2019 01:00 ET (05:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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