As he introduced Novartis’ meet-the-management event Thursday in London, CEO Vas Narasimhan hammered home Novartis’ status as a streamlined, “pure-play, innovative medicines” company and the success the new game plan has already produced.
By spinning off its generics and biosimilars powerhouse Sandoz just over a year ago, Novartis completed its transformation, freeing itself from its business units that do not further the mission.
“With Novartis as a stand-alone company, we’re already larger than where we were when we had four businesses back in 2018,” Narasimhan said. “I think that shows that the strategy is working.”
Backing up the claim was Novartis revealing before the event that it has adjusted its compound annual growth rate expectation from 5%-plus to 6%-plus through 2029.
The Swiss company cited the momentum of its current growth drivers, which have paved the way for a strong sales performance this year, which includes quarterly YOY revenue gains of at least 9% in each of the first three quarters.
Narasimhan pointed to 13 blockbuster medicines in the company’s portfolio, including eight brands with peak sales potential of at least $3 billion.
One of those, the anti-inflammatory drug Cosentyx, now has been projected to reach $8 billion in peak sales, up from the company’s previous estimate of $7 billion.
The value of the company is in the depth and diversity of its portfolio, Narasimhan explained.
“Part of the reason that Novartis has consistently managed through [patent] expires—and will do so again next year with Entresto—is that only 13% our sales are tied to a single product,” he said. “We’re a low binary-risk organization.”
Also backing up the upgrade is the blockbuster potential of medicines the company is set to launch over the next few years. That list includes chronic spontaneous urticaria candidate remibrutinib, which carries potential peak sales of $3 billion, as well as potential cardiovascular therapy pelcarsen and autoimmune contender ianalumab.
The company also announced on Thursday the acquisition of San Diego-based gene therapy specialist Kate Therapeutics for up to $1.1 billion.
The deal fits into Novartis’ M&A strategy, which Narasimhan said is to “generate the most value when we acquire assets primarily in the sub-$5 billion space.”
“We think deals in this area—where we’re mostly betting on pre-clinical phase 1 and phase 2 assets when we have a differentiated view versus the market based on our understanding of the science—that’s where we have the opportunity to create value,” Narasimhan said.