4. Novartis

Novartis is expecting 11 blockbuster launches—including new indications for approved drugs—by 2020. (Novartis)

4. Novartis
2018 revenue: $53.17 billion
2017 revenue: $50.14 billion
Headquarters: Basel, Switzerland

The key word for Novartis in 2018 is “focus." To remake itself into what CEO Vas Narasimhan calls “a medicines company,” Novartis returned its stake in the GlaxoSmithKline consumer healthcare joint venture for $13 billion, announced the much-expected spinoff of the Alcon eye care division that houses eye devices and surgical products, and sold some struggling U.S. generic pills and a dermatology business to Aurobindo for $1 billion.

While it was shedding or planning to shed those assets, Novartis made some deals to expand its advanced therapy platforms. The company shelled out $8.7 billion for gene therapy expert AveXis and scooped up Endocyte as the second piece in its push into the radioligand therapeutic market after the $3.9 billion Advanced Accelerator Applications buyout. And to bolster its manufacturing capacity for CAR-T therapy Kymriah and potentially other cell and gene therapies, Novartis made a deal to buy its former partner, French CDMO CellforCure.

Amid all the M&A movements, Novartis’ existing portfolio turned up 5% sales growth at constant currencies in 2018, reaching $51.9 billion, driven primarily by psoriasis drug Cosentyx.

Cosentyx hauled in $2.8 billion in 2018, up 36%, despite new competition in the form of Johnson & Johnson’s Tremfya and Sun Pharma’s Ilumya. In the U.S., Cosentyx grew total prescriptions by 29% in dermatology and 49% in rheumatology, according to Novartis pharma chief Paul Hudson on the fourth-quarter earnings call in January.

For 2019, Hudson said he still expects year-over-year growth for Cosentyx each quarter. But fierce competition lies ahead in the already-crowded psoriasis arena.

As phase 3 head-to-head data J&J unveiled last December showed, Tremfya helped 84.5% of patients achieve a score of 90 at week 48 on the Psoriasis Area Severity Index, a metric for measuring psoriasis symptoms, while Novartis’ blockbuster achieved the same metric in 70% of patients. Moreover, J&J just nabbed FDA approval for a single-dose injector version of Tremfya that allows patient self-administration at home.

RELATED: Johnson & Johnson’s Tremfya tops Novartis blockbuster Cosentyx in head-to-head psoriasis showdown

To put more pressure on both Novartis and J&J, AbbVie’s IL-23 antibody risankizumab is slated to get an FDA opinion in plaque psoriasis in April. In what analysts said could be a best-in-class product, the AbbVie candidate previously showed it could bring 47% of patients to complete skin clearance after 16 weeks of treatment. And in a pooled analysis that focused on patient-reported outcomes from three phase 3 trials, 56% of patients in the risankizumab arm were symptom-free, versus 30% of those taking J&J’s old therapy Stelara. In its 2018 in Review report published in February, drug intelligence house EvaluatePharma predicted the new AbbVie therapy would reach $2.08 billion in global sales in 2024.

Several other Novartis drugs crossed the blockbuster threshold in 2018, though. Most notably, heart drug Entresto finally picked up steam after a long, sluggish launch trajectory, having doubled sales to reach $1.03 billion. The Pioneer-HF trial, which reported out last November, showed that Entresto provides better outcomes than enalapril in the hospital setting. And another key trial, Paragon-HF—which compares Entresto with Novartis’ own Diovan in cardiovascular death or hospitalization—will read out this year.

Platelet therapy Promacta, BRAF-MEK combo cancer therapy Tafinlar and Mekinist, and COPD drug Xolair all joined the blockbuster club in 2018, too. More are on their way, too, or so analysts predict. First up, spinal muscular atrophy candidate Zolgensma, the centerpiece of Novartis' AveXis buyout, is expecting an FDA decision in May; EvaluatePharma has predicted the gene therapy could fetch $1.43 billion by 2024. That's despite the pricing controversy it faces, just as its fellow gene therapies are or will: While Novartis argued that the one-time drug could be cost-effective at around $5 million, drug price watchdog ICER said in a recent analysis that it should instead consider $900,000.

RELATED: Roche, Novartis are revving up next-generation eye drugs, but are they true contenders?

Novartis' new wet age-related macular degeneration antibody, brolucizumab, a potential challenger to Bayer and Regeneron’s Eylea and Novartis’ own Roche-partnered Lucentis, could collect $1.38 billion by 2024, Evaluate figures. Mayzent, a follow-up multiple sclerosis therapy to Gilenya—the best-selling product in Novartis’ lineup in 2018—holds a potential $1.30 billion in 2024 sales, according to Evaluate. 

Meanwhile, Novartis started a transformation for Sandoz, giving the copycat drug unit more autonomy within the company and focusing its portfolio more on higher-margin products such as biosimilars and hard-to-copy generics. The unit’s former CEO, Richard Francis, didn't see that plan through, however. Referring to the overhaul as a multiyear journey he cannot commit to, Francis recently stepped down, a surprising announcement that again sparked speculation about a potential spinoff or sale.

Outside of its portfolio, Novartis was embroiled in a scandal over $1.2 million in payments to President Donald Trump’s ex-personal lawyer Michael Cohen. Narasimhan said he was “completely blindsided” by news of the one-year consulting deal just weeks into his CEO stint.

In February 2019 testimony before Congress, Cohen said Novartis hired him for his “knowledge of the enigma of Donald Trump,” and that the drugmaker initially wanted not just insight but influence as well.

Former CEO Joe Jimenez and ex-general counsel Felix Ehrat came forward to admit that they co-signed the notorious contract. Ehrat took “personal responsibility” and retired. His role is now filled by Shannon Thyme Klinger, whose chief ethics, risk and compliance officer role has been taken over by former Siemens compliance overseer Klaus Moosmayer.

Apart from product sales, Novartis also registers $1.27 billion in other revenues, including income associated with collaboration agreements, among others.

4. Novartis