The Swiss pharmaceutical company Novartis earned more last year despite the corona-related subdued demand for drugs. Profit climbed 13 percent to $ 8.07 billion in 2020. The shareholders should therefore receive a dividend of three francs per share – 0.05 francs more than in 2020. CEO Vasant Narasimhan assumes that the virus pandemic will continue to affect business in the first half of the year. The forecast for the current year is correspondingly cautious: On Tuesday, excluding exchange rate fluctuations, the Basel-based company is forecasting a low to mid single-digit percentage increase in sales. The operating profit adjusted for special factors is expected to grow by a mid-single-digit percentage and faster than sales.
In 2020, sales were $ 48.66 billion, up 3 percent on a currency-neutral basis. Adjusted operating profit rose 13 percent to $ 15.42 billion. Novartis thus fulfilled its own specifications. The two waves of the coronavirus pandemic and the measures taken to contain it dampened the demand for Novartis products: hospitals that had stocked up on medicines as a precaution at the beginning of the pandemic made fewer purchases and fewer patients went to the doctor. In the core business with patented drugs, called Innovative Medicines, therapies for the treatment of skin and eye diseases sold less well and the generics subsidiary Sandoz struggled with declining sales.
The engines of growth were the remedy Cosentyx against psoriasis – with annual sales of four billion dollars, the drug with the highest sales – and the heart drug Entresto. Zolgensma's gene therapy for the treatment of muscle wasting contributed $ 920 million in sales. At a price of a good two million dollars per single dose, the most expensive drug in the world is used to treat the mostly fatal hereditary disease spinal muscular atrophy (SMA) in young children. There was greater demand for Novartis drugs, especially in growth markets, especially China, where sales revenue rose by 14 percent after adjusting for currency effects.
Novartis has to wait for an important growth driver. When the cholesterol-lowering drug Leqvio will be approved in the world's largest healthcare market, the USA, is “beyond our control”, according to CEO Narasimhan. Although the FDA has no concerns about the effectiveness or safety of the agent, an inspection by the Italian contract manufacturer Corden Pharma Caponago is pending. In the EU, Leqivo, who Narasimhan believes in sales worth billions, was approved at the beginning of December.
