NovartisNVS has a strong presence in the healthcare market across the world. This Switzerland based company has a presence in the field of oncology, neuroscience, ophthalmology and generics.
However, like many of its peers, Novartis is facing generic competition and pricing pressure for some of the products in its pharmaceutical segment. Novartis' blockbuster drug, Diovan lost exclusivity both in the U.S. and EU and entry of generics is impacting the top-line. Moreover, Gleevec also lost exclusivity in the U.S.
In this scenario, investor focus remains on late-stage pipeline candidates and their commercial potential, apart from the usual top-and bottom-line numbers. The company's ophthalmologic division, Alcon, was facing challenging conditions due to a decline in surgical equipment sales in the U.S. and emerging markets as well as intensifying generic competition in the country for Ophthalmic Pharmaceuticals. In a bid to revamp its beleaguered Alcon business, Novartis announced that its ophthalmic pharmaceuticals business will be moved to the pharmaceuticals division.
Novartis has a mixed track record. The company beat estimates twice in the last four trailing quarters posting a positive average earnings surprise of 2.92%.
Currently, Novartis has a Zacks Rank #3(Hold), but that could definitely change following the company's earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: Novartis missed on earnings in the first quarter of 2016. Our consensus called for EPS of $1.19, while the company reported EPS of $1.17.
Revenue : Novartis posted revenues of $11.6 billion, marginally falling short of our consensus estimate of $11.7 billion.
Key Stats : The loss of exclusivity for blockbuster oncology drug Gleevec (down 20%) negatively impacted sales in the first quarter. Revenues were also negatively impacted by pricing pressure. Novartis expects generics to negativey impact sales by $3.2 billion in 2016 compared to $2.2 billion in 2015. However, the key drugs at Novartis - Gilenya, Tasigna, Cosentyx, Tafinlar + Mekinist, Jakavi, Promacta/Revolade and Entresto continue to boost revenues.
Check back later for our full write up on this Novartis earnings report later!
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