By Miranda Murray and Patricia Weiss
BERLIN (Reuters) -Swiss drugmaker Novartis nudged up its full-year earnings forecast on Thursday, citing strong revenue growth from products such as breast cancer drug Kisqali during the second quarter.
Novartis said it now expects core operating income to increase by a low-teens percentage, compared with the low double-digits cited previously.
In April, Novartis had narrowed its earnings target range to rule out growth below 10%.
Second-quarter operating income, adjusted for special items, rose 20% to $5.9 billion, slightly above analyst forecasts, while sales climbed 12% to $14 billion.
Shares were down 1.9% at 0716 GMT.
Jefferies analysts attributed share decline to weaker-than-expected sales due to a miss by psoriasis drug Cosentyx, while JP Morgan noted that finance chief Harry Kirsch’s retirement announcement may have tempered investor enthusiasm.
The company’s Kisqali drug saw quarterly revenue jump 64% to $1.2 billion, while sales of multiple sclerosis drug Kesimpta surged 35% to $1.1 billion.
“Our robust balance sheet and confidence in our mid- and long-term growth enable us to initiate an up-to $10 billion share buyback as part of our commitment to balanced capital allocation,” said Chief Executive Vas Narasimhan.
Sales of Novartis’ blockbuster heart medication Entresto rose 24% to $2.36 billion, though analysts expect headwinds from the market entry of a cheaper generic drug from the second half.
“We did not expect Novartis to raise its FY guidance ahead of the generic entry to U.S. Entresto which continues to be expected per mid-year,” wrote a Vontobel analyst.
Novartis suffered a legal setback this week in its attempt to block MSN Pharmaceuticals from launching a generic version of Entresto, after a U.S. court denied a request for a preliminary injunction.
The company is also facing the possibility of steep U.S. tariffs on drugs, though Narasimhan has said that Novartis can manage their effects.
In the long term, Novartis wants to restructure its production for the U.S. market, with a push for key products to also be produced there, reversing a previous policy to expand capacity in Europe and other regions to serve the United States.
In April, Novartis said it planned to spend $23 billion to build and expand facilities in the United States.
Novartis said that Chief Financial Officer Harry Kirsch would retire in March 2026 and be replaced by Mukul Mehta, who currently heads up the business planning and analysis, digital finance and tax division.
(Reporting by Patricia Weiss and Miranda Murray. Editing by Rachna Uppal and Mark Potter)
