NEW YORK – Novartis on Wednesday before markets opened reported a 14 percent increase in second quarter revenues, thanks in part to the gradual easing of COVID-19 pandemic-related constraints and robust performance of its oncology segment.
For the three months ending June 30, the Basel, Switzerland-based company reported $12.96 billion in revenues compared to $11.35 billion in Q2 2020, outperforming analysts' consensus estimate of $12.51 billion.
"We had a strong quarter two despite the impact of COVID during the period," Novartis CFO Harry Kirsch said on a conference call to discuss the company's financial results, noting that higher sales due to stabilizing markets and favorable margins were partly offset by higher costs.
Novartis' oncology business unit grew sales 11 percent, reaching $3.9 billion compared to $3.5 billion in the prior-year second quarter, driven by growth in several of the company's key cancer assets, including its targeted BRAF and MEK inhibitor combination dabrafenib (Tafinlar) plus trametinib (Mekinist), a treatment for certain patients with BRAF-mutated melanoma or non-small cell lung cancer. Net sales for this combination therapy was $425 million, up 15 percent from the year-ago period.
Meanwhile, the company's established tyrosine kinase inhibitor imatinib (Gleevec), a treatment for Philadelphia chromosome-positive chronic myeloid leukemia and Kit-positive gastrointestinal stromal tumors, among other indications, brought in $263 million, which reflected a 9 percent decrease in net sales from the prior year's second quarter largely due to continued generics competition.
Revenues from Novartis' CDK4/6 inhibitor ribociclib (Kisqali), a treatment for certain hormone receptor-positive, HER2-negative advanced breast cancer patients, grew 42 percent to $225 million compared to $159 million in Q2 2020. Its autologous CAR T-cell therapy tisagenlecleucel (Kymriah), a one-time treatment for certain leukemia and lymphoma patients, meanwhile, brought in $147 million in net sales, though Novartis didn't note how much the drug sales had grown compared to Q2 2020. The company did note that tisa-cel's growth in the quarter was driven mainly by sales in Europe and other emerging growth markets, as well as expanding coverage across 30 countries for at least one indication.
The company's net income during the second quarter was $2.90 billion, or $1.29 per share, versus $1.87 billion, or $.82 per share, in Q2 2020. Novartis reported core EPS of $1.66, beating analysts' consensus estimates of $1.52.
Despite the revenue growth in the oncology segment, sales of therapies that require patients to receive them at a hospital — including tisa-cel — were impacted due to lingering COVID-19 restrictions in the US, which is Novartis' biggest market for oncology drugs and contributes more than 40 percent of revenues in the segment.
"When you look at the US, only 75 percent of patients are back versus pre-COVID levels, so we still lack a quarter of patient volume than we usually see," Susanne Schaffert, Novartis' president of oncology, said during the call. "And that is impacting diagnostics, impacting screening. ... You see lower biopsies, lower testing overall."
Biomarker testing rates overall are still suppressed versus pre-pandemic levels, Schaffert noted, and the patient volume still needs to recover. The segments affected most by lower patient volumes include Novartis' breast cancer portfolio, recent drug launches, and hospital-initiated therapies.
Looking ahead, Novartis will submit applications to the US Food and Drug Administration seeking approval of several therapies, including its targeted radioligand therapy, 177Lu-PSMA-617, for PSMA-positive metastatic castration-resistant prostate cancer patients during the second half of the year. The treatment, which has received breakthrough therapy designation from the FDA, improved both overall survival and radiographic progression-free survival when combined with standard-of-care treatments versus standard-of-care treatments alone in the Phase III VISION trial.
Overall, Novartis remains confident that patient visits to hospitals will increase and treatment patterns will further improve in the second half of the year, which the company hopes will accelerate growth in the months to come.