Novartis forecasts 2022 sales and profit growth; Sandoz review continues

 Novartis forecast its sales and core operating profit would grow at a mid-single-digit rate this year, as the Swiss pharmaceuticals group nears a decision on whether to keep or sell its generics business Sandoz.

The pharmaceuticals company in October raised the prospect of divesting Sandoz after years of revamping the business, as price pressures mount in the off-patent drug sector.

In its earnings statement on Wednesday, Novartis reiterated that it would provide an update by the end of 2022 as it explores a possible sale but also an option to retain the off-patent drugs unit.

Media reports have cited interest from private equity firms, in particular and Chief Executive Vas Narasimhan has said the asset was attracting interest from various suitors.

In a media call on Wednesday, the CEO said all options were still on the table.

"We don’t have a bias towards any of these options at the moment. We are doing the work to finish the carve-out financials to provide that to relevant parties and we’ll see what proposals come back," the CEO said.

Core operating income for the fourth-quarter ended Dec. 31 gained 9% to $3.8 billion, as higher drug sales offset in increase in marketing and development costs.

Revenues from arthritis and psoriasis drug Cosentyx gained 13% to $1.24 billion, slightly below average analyst expectations of $1.3 billion, based on Refinitiv data.

Novartis' revenues from heart failure treatment Entresto jumped 34% to $949 million, broadly in line with the market consensus.

It forecast Sandoz sales would be broadly in line with the 2021 level of $2.5 billion, while the division's core operating income was expected to fall at a low-to-mid-single-digit rate.

Despite plans to buy back up to $15 billion worth of shares until the end of next year, Novartis has said it would retain enough spending power to buy companies and technologies, back its own research efforts and pay attractive dividends.

It proposed raising its dividend 3.3% to 3.10 Swiss francs ($3.37) per share, the 25th consecutive increase since its creation.

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