Novartis no longer expects earnings decline at under-review Sandoz unit

Basel: Swiss drugmaker Novartis said earnings at its Sandoz unit, the maker of cheap generic drugs that might be put up for sale, would likely be flat this year, no longer expecting a decline, and added the strategic review was progressing as planned.

In a statement on Tuesday, Novartis confirmed its group guidance for 2022 core operating income to grow in a mid-single digit percentage range.

The company reiterated that it would provide an update on the future of Sandoz by the end of 2022.

During the second quarter, the generic-drugs business benefited from higher prescription numbers in markets outside the United States.

The pharma major also said it was now targeting $1.5 billion in savings from an ongoing group-wide cost cutting scheme, where it had previously seen savings of up to $1 billion by 2024.

"Implementation of our streamlined organizational model is progressing well," the company said in a statement.

Second-quarter core operating income declined 2% to $4.27 billion, slightly above the average analyst estimate of $4.19 billion in a Refinitiv poll.

For Novartis, which reports results in dollars, a strong dollar was a drag on the value of sales generated outside the United States.

Contributing to the decline, Novartis in May had to suspend production of precision nuclear cancer medicines known as radioligands. In addition, competition was a further drag on sales of multiple sclerosis drug Gilenya.

Providing growth momentum, quarterly revenue from heart failure drug Entresto jumped 27% to $1.13 billion, a touch below expectations.

Sales of psoriasis and arthritis drug Cosentyx gained 9% to $1.28 billion, in line with the market consensus.