NEW YORK – Novartis on Wednesday reported that overall revenues were down 4 percent in the fourth quarter of 2022, even as its oncology portfolio saw solid gains, including a 25 percent increase in Kisqali (ribociclib) sales versus the prior year's fourth quarter.
For the three months ending Dec. 31, Basel, Switzerland-based Novartis brought in $12.69 billion in revenues, down from $13.23 billion in the fourth quarter of 2021 and below the $13.13 billion analysts were projecting on average. On a constant-currency basis, Q4 revenues grew 3 percent year over year.
On a call to discuss the firm's Q4 and full-year 2022 financials Wednesday morning, Novartis CFO Harry Kirsch blamed inflation-related headwinds, generic competition, and expenses related to spinning off generic drugmaker Sandoz.
Sales of Novartis' precision oncology drugs, however, continued to increase. The CDK4/6 inhibitor Kisqali brought in $357 million during Q4 2022, up 25 percent from $285 million in Q4 2021. According to Novartis CEO Vas Narasimhan, drug sales reflect a growing recognition of Kisqali's benefit in patients with hormone receptor-positive, HER2-negative advanced breast cancer. Recently, the National Comprehensive Cancer Network updated guidelines recommending Kisqali as a category 1, or front-line, treatment option alongside hormone therapy for previously untreated metastatic breast cancer patients.
New data from the Phase II RIGHT Choice trial presented toward the end of 2022 further supported Kisqali's benefit in this setting. In that study, Kisqali plus endocrine therapy reduced the risk of disease progression or death by 46 percent compared to combination chemotherapy in HR-positive, HER2-negative advanced breast cancer patients. At 24 months, the median progression-free survival was nearly a year longer among patients on Kisqali versus 12.3 months on chemo.
"With that NCCN guideline update now, and as we continue to communicate that to physicians, this hopefully will give us continued momentum," Narasimhan said, adding that Kisqali holds 27 percent of the market among patients receiving the drug for the first time. The drug's recent approval in China could further bolster future sales, he added.
Novartis is awaiting a final readout in the second half of 2023 from the Phase III NATALEE study, which pits Kisqali against endocrine therapy in the adjuvant early-stage breast cancer setting. The drugmaker is eyeing regulatory submissions for Kisqali in this earlier, broader patient population later this year, too.
Pfizer's CDK4/6 inhibitor Ibrance (palbociclib) remains Kisqali's key competitor. As such, Novartis is actively recruiting advanced or metastatic HR-positive, HER2-negative, or HER2-enriched patients to a Phase III head-to-head study dubbed HARMONIA. That study, led by the European SOLTI Breast Cancer Research Group, pits Kisqali and hormone therapy against Ibrance and hormone therapy.
In Q4 2022, Novartis' net income was $1.47 billion, or $.69 per share, compared to $16.31 billion, or $7.29 per share, in Q4 2021. The company's core EPS was $1.52, above analysts' average EPS estimate of $1.44.
Novartis' radioligand therapy Pluvicto (177Lu-PSMA-617 or lutetium vipivotide tetraxetan) is continuing to ride the "outstanding start" it has had on the market since it was approved in the US in March 2022, according to Narasimhan. Pluvicto brought in $179 million in Q4 2022, more than double its revenues from Q3 2022. The firm is expecting to see continued growth in revenues, especially as Pluvicto moves into the earlier-line treatment setting for prostate-specific membrane antigen-positive metastatic castration-resistant prostate cancer.
Toward the end of 2022, Novartis announced that Pluvicto had met its primary endpoint in the Phase III PSMAfore clinical trial in PSMA-positive mCRPC patients who have not received prior taxane-based chemotherapy. This would set Novartis up for a significant expansion over the current US Food and Drug Administration-approved indication, which requires patients to be chemo-refractory. The firm is planning to present detailed data from that trial this year and file for FDA approval in H2 2023.
Since Pluvicto's launch, Narasimhan said Novartis has been working on expanding its radioligand manufacturing capacity, especially since it hasn't been able to meet the demand for the drug.
"From a demand standpoint, I would say our initial estimate of the VISION [clinical trial] population has underestimated the potential of this population, and … there are a greater number of patients and providers interested in this medicine," Narasimhan said. "We certainly have not fully penetrated the VISION population in the United States." To meet that demand, he acknowledged that Novartis needs to open new manufacturing facilities.
As of now, the company only has one facility, but it plans to expand across four facilities, eventually targeting a treatment capacity of over 250,000 Pluvicto doses per year in 2024 and beyond. "And then we'll continue to expand that capacity by adding additional facilities if demand warrants it," Narasimhan said. "We certainly see this medicine becoming a very significant medicine for the company, assuming the data reads out positively." Novartis is also evaluating Pluvicto in the PSMAddition trial in the hormone-sensitive prostate cancer setting.
Novartis also touted gains for another recent oncology launch: its STAMP inhibitor Scemblix (asciminib), for Philadelphia chromosome-positive chronic myeloid leukemia patients whose cancers harbor a T315I mutation and chronic-phase CML patients previously treated with at least two TKIs. The therapy, which garnered FDA approval in October 2021, brought in $52 million during the fourth quarter of 2022, a 27 percent sequential increase compared to $41 million in Q3 2022.
In August 2022, the European Commission approved Scemblix for patients with previously treated Philadelphia chromosome-positive CML in chronic phase. Novartis is now conducting clinical trials of that drug in first-line CML and wants to file for earlier-line FDA approval by 2025. The ASC4FIRST study, which is registration-directed, completed enrollment earlier than expected. "We expect a readout in 2024, which will enable us potentially to move this medicine into the first-line setting where it could potentially be used as an alternative to imatinib or some of the other first- and second-generation TKIs," Narasimhan said.
Separately, Novartis' well-established BRAF-MEK inhibitor combination of Tafinlar (dabrafenib) plus Mekinist (trametinib) also saw sales growth. In Q4 2022, the combination brought in $465 million, up 2 percent from $458 million in the year-ago quarter. The growth was mostly driven by demand in BRAF-positive adjuvant melanoma and non-small cell lung cancer, Novartis said in a statement.
As in recent earnings calls, Novartis avoided any mention of its slowly declining leukemia and lymphoma treatment Kymriah (tisagenlecleucel), which the field once had high hopes for. In Q4 2022, the autologous CD19-directed CAR T-cell therapy brought in $139 million, down 3 percent from $143 million in Q4 2021. The treatment now has significant competition from Gilead Sciences' and Bristol Myers Squibb's cell therapies. Unlike Gilead's and BMS' CAR T-cell therapies, Kymriah wasn't able to show a benefit in the second-line diffuse large B-cell lymphoma setting.
Novartis is now focusing on a new CAR T-cell therapy platform, T-Charge, with which it is developing a CD19-directed "rapid" CAR T-cell therapy for first-line high-risk large B-cell lymphoma as well as other indications. Novartis anticipates Phase II data readouts for the LBLC therapy, dubbed YTB323, in 2024 or 2025.
For the full year, Novartis recorded revenues of $50.55 million, a 2 percent dip compared to $51.63 billion in 2021 and lower than the $51.27 billion in revenues analysts were expecting on average. On a constant-currency basis, full-year revenues grew 4 percent year over year.
Kisqali contributed $1.23 billion in revenues in 2022, a 31 percent increase over 2021. Tafinlar/Mekinist brought in $1.77 billion, a 5 percent increase compared to the prior year. Year over year, Kymriah's sales were down 9 percent to $536 million. Pluvicto's sales to date during 2022 totaled $271 million, while Scemblix recorded revenues of $149 million.
The firm posted a net income of $6.96 billion, or $3.19 per share, in 2022, versus $24.02 billion, or $10.71 per share, in 2021. The core EPS was $6.12, which beat the consensus Wall Street EPS estimate of $6.05.
In 2023, Novartis is expecting sales to grow in the low-to-mid single digits and core operating income to grow in the mid-single digits.