(Bloomberg) -- Novartis AG saw sales of one of its key drugs rebound last quarter, helping counter the impact of cheaper copycats on older products.
Cosentyx’s sales increased 40 percent to $701 million in the second quarter, the Basel, Switzerland-based company said, exceeding analysts’ forecasts. Profit beat estimates in the period, allowing Novartis to reiterate its full-year forecast.
Chief Executive Officer Vas Narasimhan needs newer medicines such as Cosentyx for the skin condition psoriasis and a heart drug called Entresto as he narrows the focus on innovative medicines. The new boss has unveiled plans to spin off the Swiss drugmaker’s Alcon eye-care unit and agreed to sell its stake in a consumer-health venture with GlaxoSmithKline Plc.
“Cosentyx is performing strongly in a competitive market,” Narasimhan said on a conference call. The company continues to be confident it can meet consensus estimates for the drug this year, he said.
Novartis on Wednesday lowered its outlook for its Sandoz generics business, saying it expects a low-single digit decline in sales for the year. The company said earlier this year that the unit’s revenue would be broadly in line with the previous year or drop slightly. It raised its forecast for Alcon, saying it now expects mid-single digit growth in sales in 2018.
The pharmaceutical giant earlier this year announced the purchase of rare-disease drugmaker AveXis Inc. for $8.7 billion, and Narasimhan has said he’s looking to focus Novartis’s gene-therapy program on cancer, neuroscience and ophthalmology.
Cosentyx fell short of expectations in the first three months of the year. The company in April attributed the drug’s results to a reduction in inventories at specialty pharmacies and rebates to boost its use in an earlier stage of treatment. Yet Narasimhan said at the time that Novartis continues to believe in the medicine’s “trajectory.”
Profit rose to $1.29 a share in the second quarter from $1.22 a share a year earlier, the company said. That exceeded analysts’ estimates, according to data compiled by Bloomberg.
Narasimhan is taking steps to try to strengthen the company’s ethics, manage risk and regain trust following revelations earlier this year that Novartis paid $1.2 million to Donald Trump’s lawyer Michael Cohen to try to gain insight into the administration’s health-care policy. An investigation led by U.S. Senate Democrats concluded last week that Novartis’s ties to Cohen were deeper than the drugmaker acknowledged.
Narasimhan has been grappling with fallout over the contract, which drew the pharmaceutical giant into Special Counsel Robert Mueller’s probe of suspected Russian meddling in the U.S. presidential election.
“Novartis continues its long-term journey to rebuild trust with society and transform its culture,” the company said Wednesday.
(Updates with company comment on ethics in last paragraph.)
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