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FRANKFURT (Reuters) -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 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.
“The strategic review of Sandoz is progressing, we expect to provide an update, at the latest, by the end of 2022. The review will explore all options, ranging from retaining the business to separation, in order to determine how to best maximize value for our shareholders,” it said in its earnings statement on Wednesday.
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.
($1 = 0.9207 Swiss francs)
Reporting by Ludwig Burger; Editing by Michael Shields and Rashmi Aich
