Novartis Stock Slumps After Drugmaker’s Earnings, Guidance Fall Short of Expectations

Novartis (NVS) announced fourth-quarter results and guidance Wednesday that fell short of analyst’s expectations, and the company also ended a study on an experimental blood cancer treatment. American Depositary Receipts (ADRs) of the Swiss drugmaker were down more than 3% in afternoon trading in New York.

The company posted fourth-quarter core net income of $3.13 billion, with revenue up 8% to $11.43 billion, missing projections on both accounts.

Novartis said sales were driven by “continued strong performance” from its Entresto heart medicine, which were 26% higher in constant currency—removing impact of non-U.S. dollar conversions and foreign exchange fluctuations. Sales for Kisqali were up 76%, Kesimpta sales rose 73%, Cosentyx grew 21% and Pluvicto sales were 53% higher in constant currency terms.

In addition to its current portfolio, CEO Vas Narasimhan explained that the company had 10 positive Phase 3 trials on products with “significant sales potential” over the past year.

However, Novartis also announced that it was stopping research on its experimental drug for myelodysplastic syndrome or chronic myelomonocytic leukemia-2, sabatolimab, after it missed its primary endpoint in a Phase 3 trial.

The company also said it anticipates full-year sales to grow by a mid-single-digit percentage, and core operating income to rise by a high-single-digit percentage. Those were below forecasts as well.

Novartis ADRs were down 3.4% at $104.05 at around 1:45 p.m. ET. The stock had hit an all-time high earlier this month, and even with today’s declines they were up about 21% in the past year.