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Novartis Q3 Results 2015

Basel, October 27, 2015 - Novartis delivered strong core margin expansion (cc) and continued to strengthen the pipeline in Q3; on track for full-year guidance

  • Solid growth (cc[1]) in Q3 sales, core operating income, core EPS for continuing operations[2]
    • Net sales were USD 12.3 billion (-6%, +6% cc)
    • Operating income was USD 2.2 billion (-18%, +2% cc)
    • Core operating income was USD 3.5 billion (-3%, +14% cc)
    • Core operating income margin improved 2.2 percentage points (cc)
    • Net income declined mainly due to Q3 provision for conditional settlement in principle of specialty pharmacies case (slightly below USD 0.4 billion)[3] and prior-year gain from sale of Idenix shares
    • Core EPS was up 14% (cc) to USD 1.27 (-1% USD), and free cash flow[1] was USD 2.8 billion (-11% USD primarily due to currency)
    • Strong USD negatively impacting sales by -12% and core operating income by -17%
    • Strong performance of Pharmaceuticals and Sandoz more than offset weakness at Alcon
    • Alcon growth acceleration plan development underway and will be reflected in 2016 guidance given with 2015 full-year results
  • Strong innovation momentum and progress on new launches continued in Q3
    • Entresto received positive CHMP opinion and Swissmedic approval
    • Tafinlar + Mekinist received EMA approval and FDA priority review in BRAF V600+ melanoma
    • New data on Cosentyx showed sustained efficacy in psoriasis patients after three years
    • Progress continued in immuno-oncology with acquisition of Admune Therapeutics (IL-15), licensing agreements with XOMA (TGF-beta) and Palobiofarma (adenosine receptor)
    • Neuroscience pipeline was strengthened with Amgen partnership for BACE and migraine portfolio; pending acquisition from GSK of ofatumumab rights in multiple sclerosis
    • Sandoz filing for biosimilar etanercept was accepted by FDA
  • Growth Products continued to drive Q3 performance and rejuvenate portfolio
    • Growth Products[4] grew 14% (USD) to USD 4.2 billion, or 34% of net sales
    • Cosentyx launch off to strong start in US; Entresto approved and launched in US
  • Outlook 2015 for continuing operations confirmed
    • Continuing operations net sales expected to grow mid-single digit (cc); core operating income expected to grow ahead of sales at a high-single digit rate (cc)

Read the media release (PDF)


[1] Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 51 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.
[2] Continuing operations are defined on page 42 of the Condensed Interim Financial Report.
[3] With, inter alia, the Southern District of New York
[4] Growth Products are defined on page 2.