Novartis AG (ADR) (NYSE:NVS) has raised its full-year guidance following strong second-quarter sales and earnings growth and announced a $15 billion share buyback, sending its shares higher.
The Basel, Switzerland-based company posted a 9% rise in net sales in constant currency to $13.6 billion for the three months ended June 30, 2023, while core operating income grew 17%.
Net income rose 54% in constant currency to $2.32 billion and core earnings per share came in 25% higher at $1.83.
It attributed the growth to the continued strong performance of its Entresto, Kesimpta, Pluvicto and Kisqali drugs.
“Our growth drivers and rich pipeline continue to provide confidence in our mid-term growth outlook, highlighted by upcoming milestones for Kisqali, Pluvicto and iptacopan,” CEO Vas Narasimhan commented in a statement.
“Novartis robust balance sheet and expected future growth allow us to initiate an up-to US$15 billion share buyback while maintaining the flexibility for continued strategic bolt-on acquisitions.”
The company said its board has also endorsed the separation of generics and biosimilars division Sandoz by way of a 100% spin-off. If shareholders approve the move at an extraordinary general meeting in September, it plans to list the company on the SIX Swiss Exchange, with an American Depository Receipt (ADR) program in the US.
“With our new focused strategy unveiled in 2022, Novartis is transforming into a ‘pure-play’ Innovative Medicines business,” Narasimhan added.
“We focus on five core therapeutic areas (cardiovascular, immunology, neuroscience, solid tumors and hematology), with multiple significant in-market and pipeline assets in each of these areas.”
The company now expects full-year sales to grow by high single digits, up from its previous guidance of mid-single digits, with core operating income likely to increase by low double digits, from high single digits previously.
It said the buyback program will be completed by year-end 2025, following the completion of its previously announced share buyback in June 2023
Its shares were 5.1% higher at $103.57 in Tuesday mid-morning trading.
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