By Ludwig Burger
FRANKFURT (Reuters) -Novartis on Tuesday raised its full-year earnings outlook following cost cuts, a breast cancer drug trial success and progress in boosting output of a radiotherapy drug against prostate cancer.
The Swiss drugmaker said in a statement that excluding Sandoz, a generic drug division to be spun off in the second half of the year, group core operating income would grow by a "high single digit to low double digit" percentage.
It had previously forecast a "mid-to-high single digit" increase. In addition, cost cuts over the past year were now translating into higher profits, CEO Vas Narasimhan said.
First-quarter group sales rose 3% to $12.95 billion, above an analyst consensus of $12.6 billion Refinitiv Eikon data showed.
Better-than-expected revenue from psoriasis and arthritis drug Cosentyx helped.
New drugs Kesimpta, a once-a-month injection against multiple sclerosis, and breast cancer treatment Kisqali also contributed to sales growth, Novartis said.
Its shares gained 2.8% at 0832 GMT, reaching their highest since early 2020, when the stock plunged from a record high on safety concerns over eye drug Beovu. JP Morgan analysts highlighted that recently launched drugs did particularly well.
"Each of the key new launches beat consensus," they said.
Novartis has struggled with the production ramp-up of Pluvicto against prostate cancer but it said this month that it received approval to add a facility in Millburn, New Jersey, to the sites making the drug.
Kisqali last month was shown to cut the risk of recurrence in women who were diagnosed at an early stage.
That was a key win for CEO Narasimhan, who had been under investor pressure to improve near-term drug development prospects after a drop in sales of established drugs - Lucentis against a common eye disease in the elderly, and Gilenya against multiple sclerosis.
"To really focus on our top geographies, top brands, and also streamline the various management layers, is allowing us to get additional cost efficiencies," the CEO said on a media call.
The planned Sandoz spin-off remains on track for the second half of 2023, the company said, adding that a capital markets day on June 8 in New York would be dedicated to the business.