TIDMNOVN
-- Full year net sales for continuing operations1 up 9% (cc2, +6% USD):
-- Pharmaceuticals BU growing 12% (cc) driven by Cosentyx USD 3.6
billion (+28% cc), Entresto USD 1.7 billion (+71% cc) and
Zolgensma USD 361 million
-- Oncology BU growing 10% (cc) driven by Promacta/Revolade USD 1.4
billion (+23% cc), Kisqali USD 0.5 billion (+111% cc) and
Lutathera USD 0.4 billion (+160% cc)
-- Sandoz sales grew 2% (cc, -1% USD) driven by Biopharmaceuticals
-- Core2 operating income grew 17% (cc, +12% USD) and Innovative Medicines
core margin improved to 33.5% of sales, driven by sales momentum and
productivity, while funding growth investments
-- Free cash flow2 grew 15% to USD 12.9 billion mainly driven by higher
operating income
-- Net income from continuing operations declined 44% due to the one-time
net gain from the sale of the OTC JV in prior year, excluding this item
net income was broadly in line with prior year
-- Total Group net income was USD 11.7 billion, including the one-time
effect from the Alcon spin-off
-- Continued focusing Novartis as a leading medicines company:
-- Alcon successfully spun-off, creating significant shareholder
value. Following the spin-off, a one-time non-cash IFRS gain of
USD 4.7 billion was recorded in discontinued operations
-- The Medicines Company acquired, adding inclisiran a potentially
transformative cholesterol-lowering therapy
-- Xiidra acquired, strengthening ophthalmic pharmaceuticals
portfolio
-- Advanced transformation of Manufacturing and Business Services to
optimize footprint and efficiencies
-- 2019 breakthrough innovation milestones:
-- Five NME approvals of potential blockbusters: Zolgensma, Piqray,
Mayzent, Beovu and Adakveo
-- Major submissions including: ofatumumab, inclisiran, capmatinib
and Cosentyx in nr-axSPA
-- Over 30 readouts supporting submission or enabling transition to
Phase III
-- Significant progress across ESG priorities including steps towards Carbon
Neutrality by 2025 in our own operations; set ambitious 2020 ESG targets
linked to compensation
-- Dividend of CHF 2.95 per share, an increase of 4%, proposed for 2019
-- 2020 guidance - Focused medicines company3 - Net sales expected to grow
mid to high-single digit (cc); core operating income expected to grow
high-single to low double digit (cc)
Basel, January 29, 2020 -- Commenting on the results, Vas Narasimhan,
CEO of Novartis, said:
"Novartis delivered an exceptional 2019. Strong sales growth drove
double digit increases in core operating income and free cash flow.
Significant margin expansion puts us on track to reach mid to high 30s
core margin for Innovative Medicines in the mid-term. We launched an
unprecedented 5 new molecular entities in 2019 and advanced a breadth of
early programs in our pipeline that address significant unmet needs.
Looking ahead, we expect to sustain our long-term growth and margin
expansion driven by our in market growth drivers and the 15 ongoing or
upcoming major launches, while advancing our rich pipeline."
Key figures(2) Continuing operations(1)
----------------------------------
Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
------- ------- ----- --- ------- ------- ---- ----
Net sales 12 403 11 481 8 9 47 445 44 751 6 9
Operating income 1 823 1 362 34 37 9 086 8 403 8 14
Net income 1 129 1 220 -7 -6 7 147 12 800 -44 -41
EPS (USD) 0.50 0.53 -6 -4 3.12 5.52 -43 -40
Free cash flow 3 488 2 913 20 12 937 11 256 15
Core Operating
income 3 462 3 112 11 13 14 112 12 557 12 17
Core Net income 2 985 2 681 11 13 12 104 10 920 11 15
Core EPS (USD) 1.32 1.16 14 15 5.28 4.71 12 17
------- ------- ----- --- ------- ------- ---- ----
Strategy Update
During 2019, we continued focusing Novartis as a leading medicines
company powered by advanced therapy platforms and data science. We are
now uniquely positioned with scale and diversification across
therapeutic areas and we continue to execute our five strategic
priorities: embrace operational excellence, deliver transformative
innovation, go big on data and digital, build trust with society, and
build a new culture by unleashing the power of our people.
We successfully spun-off Alcon as a separate public company, creating
significant value for our shareholders. We acquired Xiidra, expanding
our ophthalmic pharmaceuticals franchise, and in January 2020 we
acquired The Medicines Company, adding inclisiran, a potentially
transformational cholesterol-lowering therapy to address cardiovascular
disease. Sandoz is in the process of becoming a more autonomous and
leaner division within Novartis, and returned to sales growth (cc) and
margin expansion in 2019 despite continued pricing pressure in the US.
Operationally, strong sales growth drove double digit growth in core
operating income and free cash flow. Innovative Medicines core margin
increased by 1.8 percentage points (cc) to 33.5% of sales, and we expect
this margin to improve to the mid to high 30's in the mid-term. Sales in
China grew double digit and we expect to double our China business by
2024.
2019 was a breakthrough innovation year for Novartis, with five NME
approvals with blockbuster potential including the first drug treatment
for breast cancer with a PIKC3A mutation, the first oral drug to treat
aSPMS, the first gene therapy to treat SMA and next generation
treatments for sickle cell disease and wet AMD. Additionally we
submitted regulatory filings for several major drugs, including
inclisiran, and we had over 30 readouts supporting submissions or
enabling transition to Phase 3. Our pipeline remains rich including many
2020 catalysts and we expect to maintain innovation momentum.
We are continuing our cultural journey and are seeing progress towards
becoming more inspired, curious and unbossed. We advanced an
enterprise-wide digital transformation spanning the entire value chain,
from development to commercial operations. We continue our journey to
rebuild trust with society based on four pillars; ethical standards,
pricing and access, global health and corporate citizenship. We have
introduced ESG targets for 2020 across these pillars which are
transparent, systemically reviewed and linked to compensation.
Financials
In order to comply with International Financial Reporting Standards
(IFRS), Novartis has separated the Group's reported financial data for
the current and prior years into "continuing" and "discontinued"
operations. The results of the Alcon business are reported as
discontinued operations. See page 45 and Notes 2, 3 and 11 in the
Condensed Financial Report for a full explanation.
The commentary below focuses on continuing operations including the
businesses of Innovative Medicines and Sandoz (including the US generic
oral solids and dermatology portfolio), as well as the continuing
Corporate functions. We also provide information on discontinued
operations.
Continuing operations fourth quarter
Net sales were USD 12.4 billion (+8%, +9% cc) in the fourth quarter
driven by volume growth of 13 percentage points, mainly from Entresto,
Zolgensma, Cosentyx and Kisqali. Strong volume growth was partly offset
by the negative impacts of pricing (3 percentage points) and generic
competition (1 percentage point).
Operating income was USD 1.8 billion (+34%, +37% cc) mainly driven by
higher sales and divestments, partly offset by growth investments,
higher legal provisions and higher amortization.
Net income was USD 1.1 billion (-7%, -6% cc) due to higher taxes,
including a one-time, non-cash deferred tax expense, partly offset by
higher operating income. EPS was USD 0.50 (-6%, -4% cc), benefiting from
lower weighted average number of shares outstanding.
Core operating income was USD 3.5 billion (+11%, +13% cc) mainly driven
by higher sales, partly offset by growth investments. Core operating
income margin was 27.9% of net sales, increasing by 0.8 percentage
points (+0.8 percentage points cc).
Core net income was USD 3.0 billion (+11%, +13% cc) driven by growth in
core operating income. Core EPS was USD 1.32 (+14%, +15% cc) growing
faster than core net income driven by lower weighted average number of
shares outstanding.
Free cash flow from continuing operations amounted to USD 3.5 billion
(+20%) compared to USD 2.9 billion in the prior year quarter. The
increase was mainly driven by higher cash flows from operating
activities and higher proceeds from the divestment of intangible assets.
Innovative Medicines net sales were USD 9.9 billion (+10%, +11% cc) in
the fourth quarter. Pharmaceuticals BU sales grew 14% (cc), driven by
continued momentum on Entresto and Cosentyx and the launch uptake of
Zolgensma. Oncology BU grew 8% (cc) driven by continued momentum on
Kisqali and Kymriah and the launch uptake of Piqray. Volume contributed
15 percentage points to sales growth. Generic competition had a negative
impact of 2 percentage points. Net pricing had a negative impact of 2
percentage points.
Sandoz net sales were USD 2.5 billion (+1%, +2% cc), driven by strong
volume growth of 5 percentage points partially offset by 3 percentage
points of price erosion. Excluding the US, net sales grew strongly (+8%
cc). Global sales of Biopharmaceuticals grew to USD 425 million (+11%
cc), mainly driven by continued strong double-digit growth in Europe.
Novartis continues to expect the previously-announced divestment of the
Sandoz US oral solids and dermatology portfolio to be completed in Q1
2020, pending regulatory approval. Novartis remains fully committed to
this business until it is divested to Aurobindo. The results of this
business are included in continuing operations.
Continuing operations full year
Net sales were USD 47.4 billion (+6%, +9% cc) in 2019 driven by volume
growth of 12 percentage points, mainly from Cosentyx, Entresto and
Zolgensma for the Pharmaceuticals BU and Promacta/Revolade, Kisqali and
Lutathera for the Oncology BU. Strong volume growth was partly offset by
the negative impacts of pricing (2 percentage points) and generic
competition (1 percentage point).
Operating income was USD 9.1 billion (+8%, +14% cc) mainly driven by
higher sales, higher divestments and productivity programs, partly
offset by growth investments, legal provisions and higher impairments.
Net income was USD 7.1 billion (-44%, -41% cc) as prior year benefited
from a USD 5.7 billion net gain recognized from the sale of our stake in
the GSK consumer healthcare joint venture. EPS was USD 3.12 (-43%, -40%
cc) benefiting from lower weighted average number of shares outstanding.
Core operating income was USD 14.1 billion (+12%, +17% cc) mainly driven
by higher sales and productivity programs, partly offset by growth
investments. Core operating income margin was 29.7% of net sales,
increasing by 1.6 percentage points (+1.9 percentage points cc).
Core net income was USD 12.1 billion (+11%, +15% cc) driven by growth in
core operating income partly offset by the discontinuation of core
income from the GSK consumer healthcare joint venture. Core EPS was USD
5.28 (+12%, +17% cc) growing faster than core net income driven by lower
weighted average number of shares outstanding.
Free cash flow from continuing operations amounted to USD 12.9 billion
(+15%) compared to USD 11.3 billion in 2018. The increase was mainly
driven by higher operating income adjusted for non-cash items.
Innovative Medicines net sales were USD 37.7 billion (+8%, +11% cc) in
2019. Pharmaceuticals BU grew 12% (cc) driven by Cosentyx reaching USD
3.6 billion, Entresto USD 1.7 billion and Zolgensma USD 361 million.
Oncology BU grew 10% (cc) driven by Promacta/Revolade reaching USD 1.4
billion, Kisqali USD 0.5 billion and Lutathera USD 0.4 billion. Volume
contributed 13 percentage points to sales growth. Generic competition
had a negative impact of 1 percentage point. Net pricing had a negative
impact of 1 percentage point.
Sandoz net sales were USD 9.7 billion (-1%, +2% cc) driven by strong
volume growth of 8 percentage points partially offset by 6 percentage
points (of price erosion, mainly in the US. Excluding the US, net sales
grew strongly (+7% cc). Global sales of Biopharmaceuticals grew to USD
1.6 billion (+16% cc), driven by continued strong double-digit growth in
Europe from Hyrimoz (adalimumab), Rixathon (rituximab) and Erelzi
(etanercept).
Discontinued operations
Discontinued operations include the business of Alcon and certain
Corporate costs directly attributable to Alcon up to the spin-off date.
As the Alcon spin-off was completed on April 9, 2019, there were no
operating results in the fourth quarter of 2019.
Discontinued operations net sales in 2019 were USD 1.8 billion compared
to USD 7.1 billion in 2018 and operating income amounted to USD 71
million compared to an operating loss of USD 234 million in 2018. Net
income from discontinued operations in 2019 amounted to USD 4.6 billion
compared to a net loss of USD 186 million in 2018 driven by the
non-taxable non-cash net gain on distribution of Alcon Inc. to Novartis
AG shareholders which amounted to USD 4.7 billion. For further details
see Note 3 "Significant transactions -- Completion of the spin-off of
the Alcon business through a dividend in kind distribution to Novartis
AG shareholders".
Total Group fourth quarter
For the total Group, net income amounted to USD 1.1 billion compared to
USD 1.2 billion in prior year, and basic earnings per share was USD 0.50
compared to USD 0.52 in prior year. Cash flow from operating activities
for the total Group amounted to USD 3.5 billion and free cash flow to
USD 3.5 billion.
Total Group full year
For the total Group, net income amounted to USD 11.7 billion compared to
USD 12.6 billion in prior year, and basic earnings per share was USD
5.12 compared to USD 5.44 in prior year. Cash flow from operating
activities for the total Group amounted to USD 13.6 billion and free
cash flow to USD 12.9 billion.
Key growth drivers (Q4 performance):
Underpinning our financial results in the fourth quarter is a continued
focus on key growth drivers including:
-- Entresto (USD 518 million, +65% cc) continued to deliver strong
double-digit performance, benefiting from the PIONEER data on hospital
initiation and higher demand in ambulatory settings.
-- Zolgensma (USD 186 million) US launch continued to progress well.
Policies are in place covering 97% of commercial patients and >50% of
Medicaid patients. Currently, 16 states representing 32% of newborns are
screening for SMA in the US.
-- Cosentyx (USD 965 million, +21% cc) continued to grow strongly across
indications and regions. In the US sales grew 25% with broad first line
access in all three indications.
-- Kisqali (USD 155 million, +166% cc) accelerated in the US driven by use
in metastatic breast cancer patients, independent of menopausal status or
combination partner, and benefiting from overall survival data, as well
as strong uptake and patient share gain in Europe and other regions.
-- Kymriah (USD 96 million) grew driven by ongoing uptake in the US and
Europe. There are over 200 qualified treatment centers and more than 20
countries worldwide have coverage for at least one indication.
-- Piqray (USD 67 million) US launch continued to progress well. Piqray is
the first and only treatment for the 40% of HR+/HER2- advanced breast
cancer patients who harbor a PIK3CA mutation.
-- Promacta/Revolade (USD 380 million, +16% cc) grew at a double-digit rate
in most regions driven by increased use in chronic immune
thrombocytopenia (ITP) and further uptake as first-line treatment for
severe aplastic anemia (SAA) in the US.
-- Tafinlar + Mekinist (USD 356 million, +15% cc) grew double-digit due to
demand in metastatic and adjuvant melanoma as well as NSCLC, with ongoing
uptake of the adjuvant melanoma indication in Europe.
-- Jakavi (USD 293 million, +17% cc) grew double-digit across all regions
driven by demand in the myelofibrosis and polycythemia vera indications.
-- Beovu (USD 35 million) was launched in the US following FDA approval in
October. Initial launch uptake has been strong and broad access has been
established including a permanent J-code from CMS effective January 1,
2020.
-- Lutathera (USD 107 million, +31% cc) continued to grow led by the US,
with over 170 centers actively treating patients, and ongoing launches in
Europe. Sales from all AAA brands (including Lutathera and
radiopharmaceutical diagnostic products) were USD 168 million.
-- Mayzent (USD 17 million) launch is progressing and efforts are ongoing to
accelerate patient on-boarding and drive urgency to treat.
-- Biopharmaceuticals (biosimilars, biopharmaceutical contract manufacturing
and Glatopa) grew to USD 425 million (+11% cc), driven by continued
strong double-digit growth in Europe.
-- Emerging Growth Markets, which comprise all markets except the US, Canada,
Western Europe, Japan, Australia and New Zealand, sales grew 12% (cc),
driven by China (USD 544 million) growing 21% (cc) from strong volume
growth, including the launches of Cosentyx and Entresto.
Net sales of the top 20 Innovative Medicines products in 2019
% change % change
------- -------
Q4 2019 FY 2019
USD m USD cc USD m USD cc
------- ---- ---- ------- ---- ----
Cosentyx 965 20 21 3 551 25 28
Gilenya 803 -4 -3 3 223 -4 -1
Lucentis 517 -1 1 2 086 2 7
Tasigna 491 3 4 1 880 0 3
Entresto 518 63 65 1 726 68 71
Sandostatin 402 1 2 1 585 0 2
Afinitor/Votubia 365 -9 -8 1 539 -1 1
Promacta/Revolade 380 15 16 1 416 21 23
Tafinlar + Mekinist 356 14 15 1 338 16 20
Galvus Group 342 5 5 1 297 1 5
Gleevec/Glivec 313 -16 -15 1 263 -19 -17
Xolair 303 13 16 1 173 13 19
Jakavi 293 14 17 1 114 14 20
Diovan Group 266 2 5 1 064 4 9
Exforge Group 245 -2 -1 1 025 2 7
Exjade/Jadenu 231 -19 -19 975 -11 -9
Votrient 177 -11 -10 755 -9 -6
Ilaris 178 15 16 671 21 25
Zortress/Certican 123 3 5 485 5 8
Kisqali 155 158 166 480 104 111
------- ---- ---- ------- ---- ----
Top 20 products
total 7 423 7 8 28 646 7 11
------- ---- ---- ------- ---- ----
R&D Update - Key developments from the fourth quarter
New approvals and regulatory update
-- Adakveo (crizanlizumab, formerly SEG101) was launched in the US following
approval by FDA to reduce frequency of pain crises in individuals living
with sickle cell disease. The approval came approximately two months
ahead of the FDA's priority review action date. Adakveo reduced the
annual rate of sickle cell pain crises by 45% and the median annual rate
of days hospitalized by 42% compared to placebo.
-- Beovu (brolucizumab, formerly RTH258) was launched in the US in October
and received a positive CHMP opinion in December. Beovu is the only
anti-VEGF in wet AMD approved in the US to maintain eligible patients on
up to three-month dosing intervals immediately after the loading phase.
-- Mayzent (siponimod) was approved in the EU for the treatment of adult
patients with active secondary progressive multiple sclerosis (SPMS).
-- Ziextenzo (Sandoz biosimilar pegfilgrastim) was approved and launched in
the US.
Regulatory submissions and filings
-- Inclisiran was submitted in the US for primary hyperlipidemia and in the
EU for mixed dyslipidemia, which include FH, ASCVD or ASCVD risk
equivalent patients.
-- Ofatumumab (OMB157) was submitted to FDA and EMA (Jan) for treatment of
RMS.
-- Capmatinib (INC280) was submitted to FDA with breakthrough therapy
designation for NSCLC.
-- Cosentyx was submitted to FDA for treatment of non-radiographic axial
spondyloarthritis (nr-axSpA) if approved, nr-axSpA would be the fourth
indication for Cosentyx.
Results from ongoing trials and other highlights
-- Inclisiran, an investigational cholesterol-lowering therapy to address
cardiovascular diseases, was added to the pipeline from our acquisition
of The Medicines Company. If approved, inclisiran will be the first and
only LDL-lowering siRNA medicine that can be given twice yearly by
subcutaneous injection and integrate seamlessly into routine healthcare
visits, potentially improving adherence and patient outcomes.
-- MBG453 anti-TIM-3 antibody phase Ib data in combination with decitabine
in patients with high-risk myelodysplastic syndrome (MDS) and acute
myeloid leukemia was presented at ASH, showing that MBG453 was safe and
well tolerated and exhibited evidence of anti-leukemic activity with
encouraging preliminary response rates. These findings validate TIM-3 as
a promising therapeutic target in MDS and AML.
-- Tropifexor (LJN452) FLIGHT-FXR phase IIb positive interim results showed
robust and dose-dependent reductions in several key biomarkers of NASH
including hepatic fat content, body weight and both alanine
aminotransferase and gamma glutamyl transferase levels compared to
placebo at 12 weeks. Full 48-week biopsy data from the study are expected
in Q2 2020.
-- Cosentyx PREVENT trial in patients with nr-axSpA showed 41.5% of patients
treated with Cosentyx had improved ASAS40 scores through Week 16 and
improvements continued through Week 52. Cosentyx narrowly missed
statistical significance for superiority in ACR 20, the primary endpoint
of the EXCEED head-to-head trial in psoriatic arthritis, while showing
numerically higher results versus Humira(R).
-- Kisqali MONALEESA-3 data were published in the NEJM showing superior
overall survival compared to fulvestrant and consistent efficacy across
advanced breast cancer patient subgroups, reducing the risk of death by
almost 30% compared to fulvestrant alone.
-- Kymriah data presented ASH demonstrated consistent efficacy and safety
outcomes in US patients when used in real-world setting. Understanding
the Kymriah safety profile, and increased experience with administration
in real-world practice supports use in the outpatient setting.
-- Sickle cell disease global survey results were presented at ASH showing
profound and often under-reported effects, for example more than 90% of
patients surveyed experienced at least one vaso-occlusive crisis (VOC) in
the past 12 months.
-- QMF149 positive phase III results showed statistically significant
improvement in lung function compared to monotherapy. QMF149 showed
improvement in peak expiratory flow, exacerbation rates, rescue
medication use versus mometasone furoate among other secondary endpoints.
-- Fevipiprant analysis of phase III LUSTER 1 and 2 phase trials did not
support further development in asthma as a primary indication.
-- Sandoz US Generic Advair(R) development program in the US was
discontinued.
Capital structure and net debt
Retaining a good balance between investment in the business, a strong
capital structure and attractive shareholder returns remains a priority.
In 2019, Novartis repurchased a total of 60.3 million shares for USD 5.4
billion on the SIX Swiss Exchange second trading line, including 46.5
million shares (USD 4.2 billion) bought back under the up to USD 5
billion share buyback and 13.8 million shares (USD 1.1 billion) to
mitigate dilution related to participation plans of associates. In
addition, 1.7 million shares (USD 0.2 billion) were repurchased from
associates. In the same period, 15.8 million shares (for an equity value
of USD 1.1 billion) were delivered as a result of options exercised and
share deliveries related to participation plans of associates.
Consequently, the total number of shares outstanding decreased by 46.2
million versus December 31, 2018. These treasury share transactions
resulted in a decrease in equity of USD 4.5 billion and a net cash
outflow of USD 5.3 billion.
As of December 31, 2019, net debt decreased by USD 0.3 billion to USD
15.9 billion versus December 31, 2018. The decrease was mainly driven by
USD 12.9 billion free cash flow from continuing operations during 2019
and USD 2.9 billion net inflows related to the Alcon spin-off, partly
offset by the USD 6.6 billion annual dividend payment, net cash outflow
for treasury share transactions of USD 5.3 billion and M&A transactions
of USD 3.8 billion (mainly the Xiidra acquisition).
In January 2020, Novartis acquired The Medicines Company for USD 9.7
billion and in connection borrowed USD 7 billion under a short term
credit facility.
As of Q4 2019, the long-term credit rating for the company is A1 with
Moody's Investors Service and AA- with S&P Global Ratings.
2020 Outlook
Barring unforeseen events
Focused medicines company guidance
Excluding Alcon and the Sandoz US oral solids and dermatology business
from both 2019 and 2020
-- Net sales: expected to grow mid to high-single digit (cc)
-- From a divisional perspective, we expect net sales performance (cc) in
2020 to be as follows:
-- Innovative Medicines: expected to grow mid to high-single digit
-- Sandoz: expected to grow low-single digit
-- Core operating income: expected to grow high-single to low double digit
(cc)
The guidance above includes the forecast assumption that no Gilenya and
no Sandostatin LAR generics enter in 2020 in the US.
Foreign exchange impact
If late-January exchange rates prevail for the remainder of 2020, the
currency impact for the year would be zero to negative 1 percentage
point on net sales and negative 1 to negative 2 percentage points on
core operating income. The estimated impact of exchange rates on our
results is provided monthly on our website.
Annual General Meeting
Dividend proposal
The Novartis Board of Directors proposes a dividend payment of CHF 2.95
per share for 2019, up 4% from CHF 2.85 per share in prior year,
representing the 23rd consecutive dividend increase since the creation
of Novartis in December 1996. Shareholders will vote on this proposal at
the 2020 Annual General Meeting.
Reduction of Share Capital
The Novartis Board of Directors proposes to cancel 60 313 900 shares (of
which 59 483 900 shares were repurchased under the eighth and 830 000
shares were repurchased under the seventh share repurchase program in
2019) and to reduce the share capital accordingly by CHF 30 156 950,
from CHF 1 263 687 410 to CHF 1 233 530 460.
Nominations for election to the Board of Directors
The Novartis Board of Directors announced today that it is nominating
Bridgette Heller, for election to the Board at the Annual General
Meeting on February 28, 2020. Bridgette Heller brings more than 35 years
of experience at Fortune 100 companies and held several executive
positions in the consumer goods and healthcare industry among others at
Danone, Merck & Co as well as Johnson & Johnson. Furthermore, Bridgette
Heller serves on several Boards. Bridgette Heller is the co-founder and
CEO of The Shirley Proctor Puller Foundation which is committed to
generating better educational outcomes for underserved children in St.
Petersburg, Florida. Her extensive track record in global leadership
roles coupled with her broad experience in both the consumer products as
well as healthcare area will be a great addition to the Novartis Board's
commercial expertise.
As previously announced on October 22, 2019, the Board of Directors also
proposes the election of Simon Moroney to the Board.
Re-elections of the Chairman and the members of the Board of Directors
The Novartis Board of Directors proposes the re-election of Joerg
Reinhardt (also as Chairman), Nancy C. Andrews, Ton Buechner, Patrice
Bula, Srikant Datar, Elizabeth Doherty, Ann Fudge, Frans van Houten,
Andreas von Planta, Charles L. Sawyers, Enrico Vanni, and William T.
Winters as members of the Board of Directors.
Re-elections and elections to the Compensation Committee
The Novartis Board of Directors proposes the re-election of Patrice Bula,
Srikant Datar, Enrico Vanni, and William T. Winters and the election of
Bridgette Heller as a new member of the Compensation Committee. Ann
Fudge is no longer standing for re-election as a member of this
committee. The Board of Directors intends to designate Enrico Vanni
again as Chairman of the Compensation Committee, subject to his
re-election as a member of the Compensation Committee.
Continuing operations(1) Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Net sales 12 403 11 481 8 9 47 445 44 751 6 9
Operating income 1 823 1 362 34 37 9 086 8 403 8 14
As a % of sales 14.7 11.9 19.2 18.8
Core operating income 3 462 3 112 11 13 14 112 12 557 12 17
As a % of sales 27.9 27.1 29.7 28.1
Net income 1 129 1 220 -7 -6 7 147 12 800 -44 -41
EPS (USD) 0.50 0.53 -6 -4 3.12 5.52 -43 -40
Core net income 2 985 2 681 11 13 12 104 10 920 11 15
Core EPS (USD) 1.32 1.16 14 15 5.28 4.71 12 17
Cash flows from operating
activities 3 540 3 436 3 13 547 13 049 4
Free cash flow 3 488 2 913 20 12 937 11 256 15
-------- ------- ----- ------- ------- ----
Innovative Medicines Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Net sales 9 920 9 022 10 11 37 714 34 892 8 11
Operating income 2 210 1 300 70 73 9 287 7 871 18 24
As a % of sales 22.3 14.4 24.6 22.6
Core operating income 3 122 2 769 13 14 12 650 11 151 13 18
As a % of sales 31.5 30.7 33.5 32.0
---------------------------- -------- ------- ------- -------
Sandoz Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Net sales 2 483 2 459 1 2 9 731 9 859 -1 2
Operating income / loss - 195 237 nm nm 551 1 332 -59 -53
As a % of sales -7.9 9.6 5.7 13.5
Core operating income 517 482 7 10 2 094 2 002 5 10
As a % of sales 20.8 19.6 21.5 20.3
---------------------------- -------- ------- ------- -------
Corporate Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Operating loss -192 -175 -10 -11 -752 -800 6 4
Core operating loss -177 -139 -27 -29 -632 -596 -6 -9
-------- ------- ----- ----- ------- ------- ---- ----
Discontinued operations
(2) Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Net sales 1 788 1 777 7 149
Operating income / loss - 63 71 - 234
As a % of sales -3.5 4.0 -3.3
Core operating income 275 350 1 266
As a % of sales 15.4 19.7 17.7
Net income / loss - 26 4 590 - 186
------- ------- -------
Total Group Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change
USD m USD m USD cc USD m USD m USD cc
-------- ------- ----- ----- ------- ------- ---- ----
Net income 1 129 1 194 -5 -4 11 737 12 614 -7 -3
EPS (USD) 0.50 0.52 -4 -2 5.12 5.44 -6 -2
Core net income 2 985 2 881 4 5 12 382 11 938 4 8
Core EPS (USD) 1.32 1.25 6 7 5.40 5.15 5 9
Cash flows from operating
activities 3 540 3 766 -6 13 625 14 272 -5
Free cash flow 3 488 2 939 19 12 875 11 717 10
-------- ------- ----- ------- ------- ----
nm = not meaningful
(1) Continuing operations include the businesses of Innovative Medicines
and Sandoz Division including the US generic oral solids and dermatology
portfolio and Corporate activities. See page 45 of the Condensed
Financial Report for full explanation
(2) Discontinued operations include the business of Alcon. Net income
of discontinued operations for 2019 includes a USD 4.7 billion gain
on distribution of Alcon Inc. to Novartis AG shareholders. See page
45 and Notes 2, 3 and 11 of the Condensed Financial Report for full
explanation
Detailed financial results accompanying this press release are included
in the Condensed Financial Report at the link below:
https://ml-eu.globenewswire.com/resource/download/3ddf6567-def7-415a-b1ae-cee41a33897f/
Disclaimer
This press release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of
1995, that can generally be identified by words such as "growth,"
"expansion," "breakthrough innovation," "potentially," "to optimize,"
"transformative," "potential," "guidance," "launched," "launching,"
"momentum," "growth investments," "submissions," "submitted,"
"submission," "to sustain," "advancing," "focus," "focused," "focusing,"
"expect," "becoming," "to improve," "expected," "to grow," "continued,"
"continuing," "continue," "growing," "launches," "continues," "expect,"
"to be completed," "pending," "fully committed," "launch," "ongoing,"
"filings," "breakthrough therapy designation," "will," "may," "would,"
"proposed," "pipeline," "priority," "outlook," "unforeseen," "forecast,"
"enter," "priority review," "upcoming," "on track," "integrate,"
"potentially improving," "promising," "to be discontinued," "prevail,"
"impact," "intends," "launch," "strongly," "remain," "likely," "believes,
" or similar expressions, or by express or implied discussions regarding
potential new products, potential new indications for existing products,
potential product launches, or regarding potential future revenues from
any such products; or regarding the development or adoption of
potentially transformational technologies, treatment modalities and
business models; or regarding potential future or pending transactions,
including the potential outcome, or financial or other impact on
Novartis, of the proposed divestiture of certain portions of our Sandoz
Division business in the US; or regarding the potential impact of share
buybacks; or regarding potential future sales or earnings of the Group
or any of its divisions or potential shareholder returns; or by
discussions of strategy, plans, expectations or intentions. Such
forward-looking statements are based on the current beliefs and
expectations of management regarding future events, and are subject to
significant known and unknown risks and uncertainties. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those set forth in the forward-looking statements. You should not place
undue reliance on these statements. In particular, our expectations
could be affected by, among other things: global trends toward
healthcare cost containment, including ongoing government, payor and
general public pricing and reimbursement pressures and requirements for
increased pricing transparency; uncertainties regarding potential
significant breaches of data security or data privacy, or disruptions of
our information technology systems; regulatory actions or delays or
government regulation generally, including potential regulatory actions
or delays with respect to the proposed transactions or the development
of the products described in this press release; the potential that the
proposed divestiture of certain portions of our Sandoz Division business
in the US or the planned acquisition of the Japanese operations and
associated assets of Aspen Global Incorporated may not be completed in
the expected time frame, or at all; the potential that the strategic
benefits, synergies or opportunities expected from the acquisition of
The Medicines Company, the proposed divestiture of certain portions of
our Sandoz Division business in the US, or the planned acquisition of
the Japanese operations and associated assets of Aspen Global
Incorporated, and other transactions described, may not be realized or
may be more difficult or take longer to realize than expected; the
successful integration of The Medicines Company into the Novartis Group
and the timing of such integration; potential adverse reactions to the
transaction by customers, suppliers or strategic partners; dependence on
key personnel of The Medicines Company; dependence on third parties to
fulfill manufacturing and supply obligations; the uncertainties involved
in predicting shareholder returns; the uncertainties in the research and
development of new healthcare products, including clinical trial results
and additional analysis of existing clinical data; our ability to obtain
or maintain proprietary intellectual property protection, including the
ultimate extent of the impact on Novartis of the loss of patent
protection and exclusivity on key products that commenced in prior years
and is expected to continue this year; safety, quality, data integrity,
or manufacturing issues; uncertainties involved in the development or
adoption of potentially transformational technologies and business
models; uncertainties regarding actual or potential legal proceedings,
including, among others, product liability litigation, disputes and
litigation with business partners or business collaborators, government
investigations generally, litigation and investigations regarding sales
and marketing practices, and intellectual property disputes; our
performance on environmental, social and governance measures; general
political, economic and trade conditions, including uncertainties
regarding the effects of ongoing instability in various parts of the
world; uncertainties regarding future global exchange rates;
uncertainties regarding future demand for our products; and other risks
and factors referred to in Novartis AG's current Form 20-F on file with
the US Securities and Exchange Commission. Novartis is providing the
information in this press release as of this date and does not undertake
any obligation to update any forward-looking statements as a result of
new information, future events or otherwise.
All product names appearing in italics are trademarks owned by or
licensed to Novartis Group companies.
Advair(R) is a registered trademark of GSK. Humira(R) is a registered
trademark of Abbvie Inc.
About Novartis
Novartis is reimagining medicine to improve and extend people's lives.
As a leading global medicines company, we use innovative science and
digital technologies to create transformative treatments in areas of
great medical need. In our quest to find new medicines, we consistently
rank among the world's top companies investing in research and
development. Novartis products reach more than 750 million people
globally and we are finding innovative ways to expand access to our
latest treatments. About 109,000 people of more than 140 nationalities
work at Novartis around the world. Find out more at. www.novartis.com
Novartis will conduct a conference call with investors to discuss this
news release today at 14:00 Central European time and 8:00 Eastern Time.
A simultaneous webcast of the call for investors and other interested
parties may be accessed by visiting the Novartis website. A replay will
be available after the live webcast by visiting.
https://www.novartis.com/investors/event-calendar
Detailed financial results accompanying this press release are included
in the condensed financial report at the link below. Additional
information is provided on Novartis divisions and pipeline of selected
compounds in late stage development and a copy of today's earnings call
presentation can be found at.
https://www.novartis.com/investors/event-calendar
Novartis issued its 2019 Annual Report today, and it is available at
www.novartis.com. Novartis will also file its 2019 Annual Report on Form
20-F with the US Securities and Exchange Commission today, and will post
this document on www.novartis.com. Novartis shareholders may receive a
hard copy of either of these documents, each of which contains our
complete audited financial statements, free of charge, upon request.
Novartis also issued its 2019 Novartis in Society ESG report today, and
it is available at www.novartis.com.
Important dates
February 28, 2020 Annual General Meeting
April 28, 2020 First quarter results 2020
May 19/20, 2020 Meet Novartis Management -- in Basel
July 21, 2020 Second quarter results 2020
October 27, 2020 Third quarter results 2020
Please find full media release in English attached and on the following
link: Media release (PDF)
https://ml-eu.globenewswire.com/resource/download/12ef3b87-73bc-4d2c-83e9-6a698ee0034f/
Further language versions are available through the following links:
German version is available through the following link: Medienmitteilung
(PDF)
https://ml-eu.globenewswire.com/resource/download/5c64e357-04f6-420d-9615-f639f39c5459/
French version is available through the following link: Communiqué
aux médias (PDF)
https://ml-eu.globenewswire.com/resource/download/54c45005-d561-478f-8408-4f99d55414c3/
(1) Refers to continuing operations as defined on page 45 of the
Condensed Financial Report, excludes Alcon, includes the businesses of
Innovative Medicines and Sandoz (including the US generic oral solids
and dermatology portfolio), as well as the continuing corporate
functions.
(2) Constant currencies (cc), core results and free cash flow are
non-IFRS measures. An explanation of non-IFRS measures can be found on
page 58 of the Condensed Financial Report. Unless otherwise noted, all
growth rates in this Release refer to same period in prior year.
(3) Removes Alcon and the Sandoz US dermatology and oral solids
portfolio from both 2019 and 2020. Forecast assumption that no Gilenya
and Sandostatin LAR generics enter in 2020 in the US.
(END) Dow Jones Newswires
January 29, 2020 01:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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