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Novartis (NVS) to Report Q1 Earnings: What to Expect?

Novartis AG NVS, a Swiss pharma giant, is scheduled to report first-quarter 2024 results on Apr 23.

The company’s earnings surpassed estimates in three of the last four quarters and missed in the remaining one, the average surprise being 3.72%. In the last reported quarter, NVS’ earnings missed estimates by 6.71%.

Novartis AG Price, Consensus and EPS Surprise

Novartis AG Price, Consensus and EPS Surprise
Novartis AG Price, Consensus and EPS Surprise

Novartis AG price-consensus-eps-surprise-chart | Novartis AG Quote

Let's see how things might have shaped up prior to the announcement.

 

Factors Driving Growth

With the successful spin-off of the Sandoz business in October 2023, Novartis operates as a single global operating segment concentrating on core therapeutic areas of cardiovascular, renal and metabolic, immunology, neuroscience and oncology.

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NVS’ first-quarter sales are likely to have been boosted by Kesimpta, Entresto, Kisqali and Pluvicto.

Cardiovascular drug Entresto sales witnessed a solid year-over-year surge in the fourth quarter of 2023 due to sustained robust demand-led growth across all geographies. The momentum is likely to have continued in the first quarter.

The Zacks Consensus Estimate and our model estimate for Entresto's first-quarter sales are pegged at $1.6 billion and $1.7 billion, respectively.

Robust sales growth, driven by strong demand in the United States, has likely fueled Pluvicto’s sales in the first quarter. Pluvicto is the first and only radioligand therapy approved by the FDA for treating adult patients with progressive, PSMA-positive metastatic castration-resistant prostate cancer.

The Zacks Consensus Estimate and our model estimate for Pluvicto's first-quarter sales are pegged at $325 million and $329 million, respectively.

The stellar performance of the breast cancer drug Kisqali has likely fueled the top line in the first quarter. Sales surged in the previous quarter across all regions, based on increasing recognition of its consistently reported overall survival and quality of life benefits in HR+/HER2- advanced breast cancer.

The Zacks Consensus Estimate and our model estimate for Kisqali's first-quarter sales are pegged at $631 million and $602 million, respectively.

Other growth drivers, such as Kesimpta, have likely witnessed an increase in demand.

The Zacks Consensus Estimate and our model estimate for Kesimpta's first-quarter sales are pegged at $647 million and $668 million, respectively.

Strong growth in Leqvio, too, has likely fueled sales in the first quarter.

The Zacks Consensus Estimate and our model estimate for Leqvio's first-quarter sales are pegged at $135 million and $123 million, respectively.

Sales of Cosentyx, too, have likely increased in the first quarter.  In October 2023, the FDA approved the drug for treating moderate to severe hidradenitis suppurativa in adults. The federal agency also approved intravenous formulation of the drug for the treatment of adults with psoriatic arthritis, ankylosing spondylitis and non-radiographic axial spondyloarthritis. Label expansion of the drug has likely boosted sales in the first quarter.

Both the Zacks Consensus Estimate and our model estimate for Cosentyx's first-quarter sales are pegged at $1.3 billion.

However, generic competition for Gilenya, Tasigna and Lucentis has likely impacted sales.

Recent Events

In December 2023, the FDA approved iptacopan as the first oral monotherapy for the treatment of adults with paroxysmal nocturnal hemoglobinuria under the brand name Fabhalta. The drug has been launched in the United States.

NVS recently commenced tender offer for MorphoSys AG. In February 2024, Novartis announced that it would acquire MOR to expand its oncology portfolio. The acquisition will add MorphoSys’s late-stage candidate pelabresib (CPI-0610) to NVS’ pipeline. The candidate is being evaluated in combination with Jakafi (ruxolitinib) for patients with myelofibrosis, a rare bone marrow cancer. Pelabresib is also being evaluated in patients with essential thrombocythemia in a mid-stage study.

Novartis will also add tulmimetostat (CPI-0209) to its deep pipeline with MOR’s acquisition. The candidate is an early-stage investigational dual inhibitor of enhancer of zeste homolog 1 and 2 (EZH1 and EZH2) proteins, which are currently being tested in patients with solid tumors or lymphomas.

Share Price Performance

Shares of Novartis have lost 8.3% year to date against the industry’s 8.6% growth.

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What Our Model Predicts

Our proven model does not conclusively predict an earnings beat for Novartis this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: Earnings ESP for NVS is -0.97% as the Zacks Consensus Estimate stands at $1.73 while the Most Accurate Estimate is currently pegged at $1.71 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are some drug/biotech stocks that have the right combination of elements to beat on earnings this time around:

Oncolytics Biotech ONCY has an Earnings ESP of +5.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ONCY topped earnings estimates in three of the last four quarters and missed in the remaining one, the average earnings surprise being 5.20%.

Fate Therapeutics FATE has an Earnings ESP of +5.99% and sports a Zacks Rank #3.

FATE beat earnings estimates in all of the last four quarters, the average earnings surprise being 28.86%. Shares of FATE have gained 6.8% in the past three months.

BioMarin Pharmaceutical BMRN has an Earnings ESP of +21.3% and a Zacks Rank #3.

BMRN topped earnings estimates in each of the last four quarters and has a four-quarter earnings surprise of 16.45%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Novartis AG (NVS) : Free Stock Analysis Report

BioMarin Pharmaceutical Inc. (BMRN) : Free Stock Analysis Report

Oncolytics Biotech Inc. (ONCY) : Free Stock Analysis Report

Fate Therapeutics, Inc. (FATE) : Free Stock Analysis Report

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