Novartis dials up 2024 sales outlook, preps for key expansions of 3 cancer drugs

Novartis has increased its full-year sales guidance after pulling off a strong first quarter, even though three meds missed analysts’ expectations ahead of their key expansion opportunities.

Novartis’ $11.8 billion sales in the first quarter marked 11% growth year on year at constant exchange rates and came in 4% above Wall Street’s consensus estimates. As a result, Novartis has raised its full-year guidance to now expect sales to grow in the high single to low double digits, up from the previous forecast of mid-single-digit growth.

However, three cancer drugs—Pluvicto, Kisqali and Scemblix, all of which have important new indications lined up in earlier treatment settings—all slightly disappointed during the first three months of 2024.

Perhaps the biggest disappointment came from Pluvicto, which has now had two weak quarters back to back. The radiopharmaceutical’s $310 million sales were 3% below consensus, according to analysts at ODDO BHF, who had previously had an even higher projection for the drug.

Pluvcito was still working though some “remnants of the base of patients that were a bit lower in quarter four,” Novartis CEO Vas Narasimhan, M.D., explained to investors during the company’s earnings call Tuesday.

Pluvicto suffered from a short period of shortage in 2023. While the difficult-to-make therapy is now offered with ample supply, new patients were just beginning to come in since last year’s fourth quarter, leading to a gap in the number of patients who were on treatment when it came to the first quarter of 2024.

Over the longer term, Novartis expects Pluvicto to “steadily grow” in its current indication as a post-chemo treatment for PSMA-positive metastatic castration-resistant prostate cancer (mCRPC), with peak sales there north of $2 billion, Narasimhan said. This growth will be driven by expanding the number of oncologists who will refer patients to designated treatment centers and the addition of more sites, he said.

The more important thing for Pluvicto—and a potential inflection point, according to Narasimhan—is an upcoming FDA filing in the first-line mCRPC setting. As patient survival trend in the phase 3 PSMAfore trial has turned in Pluvicto’s favor, Novartis said earlier this month that it would file Pluvicto for a pre-chemo approval in the second half of 2024. The decision came after two delays related to maturity of clinical data.

On Tuesday’s call, Narasimhan narrowed the target filing date to “mid-year” and said that Novartis expects an approval in the first half of next year.

Besides moving up the treatment sequence, Narasimhan also pointed to a “substantial inflection” potentially from geographic expansions in China and Japan, where the Swiss pharma is building dedicated manufacturing facilities.

Another label expansion that Novartis investors are anxiously awaiting is Kisqali in early-stage HR-positive, HER2-negative breast cancer, for which the company filed an FDA application in December.

In a wrinkle in the submission, Novartis recently started making manufacturing adjustments to Kisqali to match the latest regulatory standards in the early-stage cancer setting. Despite the update, Novartis still expects to launch Kisqali in a broad patient population in the second half of this year, Narasimhan said.

The adjustments needed are minor and are related to seeking source material of higher quality from third parties, plus another layer of processing before the product leaves the manufacturing chain, Narasimhan explained. Novartis said it will complete the changes with the FDA by the end of June.

Meanwhile, Kisqali in its existing metastatic uses increased sales by 54% year over year at constant currencies to reach $627 million in the first quarter. The haul fell slightly short of consensus estimates, by 2%, but exceeded ODDO BHF’s own projection. The drug now has 45% new-to-brand share among CDK4/6 inhibitors in the U.S., according to Novartis.

The third drug that’s waiting to move into an earlier treatment line is the blood cancer med Scemblix. Novartis said in January that Scemblix showed superior major molecular response rates versus standard-of-care tyrosine kinase inhibitors—including Novartis’ own Gleevec—in a phase 3 trial for newly diagnosed patients with chronic myeloid leukemia. The full data set will be shared at the American Society of Clinical Oncology annual meeting this summer.

Besides efficacy, Narasimhan said Scemblix’s safety profile would be another thing he’d like to highlight in the upcoming data presentation.

In terms of market opportunity, some doctors who are sticking to generic Gleevec today may take longer to accept Scemblix if it’s approved in the first line, Narasimhan acknowledged. But the chief executive said he foresees a “very rapid uptake” among doctors who are currently on second-generation TKIs.

In the first quarter, Scemblix generated $136 million sales, good for 83% growth year over year at unchanged exchange rates, although the haul missed consensus by 6%.

While all three of those meds saw major double-digit sales growth, the main drivers for Novartis’ stellar first quarter were its top-selling drugs Entresto and Cosentyx. For Entresto, the heart drug’s $1.88 billion revenue beat consensus by 15%, while Cosentyx’s $1.33 billion sales were 10% ahead of consensus.