Novartis (NVS.US) Q4 net profit significantly surpasses expectations as patents for several key drugs are set to expire.

Swiss pharmaceutical company Novartis NVS.US announced on Friday that its adjusted fourth-quarter net profit grew by 26% to $3.93 billion, significantly surpassing analysts' estimates of $3.64 billion. This was driven by strong sales of Entresto, a well-known heart failure drug, and Kesimpta, a multiple sclerosis drug. Entresto's quarterly revenue grew by a third to $2.18 billion, exceeding market expectations, as it will lose patent protection later this year. Kesimpta's revenue grew nearly 50% to $950 million, also exceeding market expectations. The company forecast that, excluding the impact of currency fluctuations, its adjusted operating profit would grow by "high single-digit to low double-digit" percentages in 2025, compared to 22% in 2024. Novartis' three main drugs are set to lose patent protection, with Entresto expected to face generic competition in the United States later this year. The pharmaceutical company said that new therapies would continue to drive growth. In addition to Entresto, two of Novartis' top 20 drugs — Tasigna, a leukemia treatment, and Promacta, a blood coagulation treatment — will also face generic competition in the United States. However, Novartis expects to have more than 15 key drugs submitted to regulatory agencies or approved this year. Patent expiration is a test for CEO Vas Narasimhan, who has been reforming the company for several years, focusing on specific types of diseases. Earlier this year, Narasimhan released a forecast that many investors viewed as cautious, and then raised it in several consecutive quarters. Over the past 12 months, Novartis' stock price has only risen by about 1%, lagging behind its competitor Roche. Roche said on Thursday that its profit, excluding certain items, could grow by high single-digit percentages this year, measured at constant exchange rates.