- Battling entry of cheaper versions to a key cancer drug, Novartis on Thursday reported $2.01 billion in first quarter net income compared to $2.31 billion a year ago, a 13% drop. Net revenue declined by 3% to $11.6 billion, missing market expectations.
- Sales of Novartis' blockbuster Gleevec fell by a substantial 22% after a generic version of the blood cancer drug entered the U.S. market in February 2016.
- Uptake in the U.S. was slower than expected for the company's new heart failure drug Entresto, which notched only $17 million in Q1 sales despite higher formulary access. Novartis is expanding its field force in the U.S. and launching a direct-to-consumer marketing campaign to help boost sales.
The entry of a generic version of Gleevec in the U.S. is a major challenge for Novartis. In the first quarter of last year, the cancer drug brought in $1.07 billion in sales and made up a significant share of the company's overall oncology revenue.
However, despite the 22% sales decline to $834 million in Q1 of this year, the drop-off was smaller than expected, according to The Wall Street Journal. Steady gains from other drugs in its oncology portfolio, such as Votrient and Tafinlar + Mekinist, offset the fall in Gleevec sales and helped drive a 6% gain in oncology revenue.
But Novartis' new heart failure drug Entresto continued to disappoint. U.S. uptake was slow, despite formulary access for Medicare patients reaching 91%. Novartis identified prior authorizations and "a lack of physician experience to counteract entrenched prescriber habits" as key challenges for the drug.
Novartis is investing more money to help drive sales, and said it will expand its U.S. field force this month and launch a DTC marketing campaign. Presumably as part of this, the company has recently begun airing a new TV commerical for the drug.
However, its other major launch for the psoriasis drug Cosentyx has done better. Sales of the IL-17A drug hit $176 million in the first-quarter.
The generic unit Sandoz reported steady sales overall but was buoyed slightly by better U.S. sales from launches of Glatopa and Zarxio, the first biosimilar approved in the U.S.
Shares of Novartis rose initially but have fallen back in Thursday morning trading. Novartis' Swiss rival Roche reported stronger sales growth earlier this week on the back of its oncology and immunology divisions.