Novartis Chief Executive Vas Narasimhan said on Tuesday that the "extremely disruptive environment" posed by the coronavirus pandemic had dimmed the Swiss drugmaker's 2020 revenue outlook, after reporting a drop in quarterly sales and profit.
Net income in the three months through June fell 4% to $1.9 billion, compared with $2.1 billion in 2019. Sales fell 1% to $11.35 billion, from $11.8 billion. Analysts at Zuercher Kantonalbank said the sales decline was 7% weaker than the bank had expected.
The Basel-based company trimmed its 2020 sales outlook, saying it now expects sales to grow in the mid-single-digit percentage range, down from its previous expectation for a mid-to-high-single-digit percentage increase.
Novartis sees core operating income rising by low double-digit percentages, at the top of its earlier forecast's range, as pandemic-related travel and conference attendance cuts help reduce costs.
Second-quarter sales and profit both fell, as drugs for eye and skin diseases were impacted. Moreover, Novartis's medicines that must be given in the hospital saw declines as patients postponed treatment due to lockdowns and travel restrictions.
"In addition to opthalmology and dermatology, therapies in the second quarter that required hospital stays did see an impact across the portfolio," Narasimhan said on a call, citing radioligand therapy Lutathera for certain cancers.
Lutathera second-quarter sales fell to $105 million, from $109 million a year earlier.
The pandemic also took the shine off Cosentyx, Novartis's top-selling psoriasis and arthritis drug, which saw sales rise 12% to $944 million, less than half the 2019 growth rate. For eye drug Lucentis, sales fell a quarter to $401 million.
"We are seeing now a rebound back in terms of patient visits to physicians, both in ophthalmology and dermatology," Narasimhan said. "So we're optimistic you'll then see that underlying performance of Cosentyx come through in the second half."
The drugmaker's generics business Sandoz saw sales drop 9% to $2.16 billion, as the first-quarter surge in buying by hospitals due to the pandemic ended.