Novartis AG raised its mid-term sales growth forecast as the Swiss drugmaker narrows its focus on innovative medicines with the highest profit potential.
Sales should increase 5% annually through 2027, the company said Tuesday. The core operating margin should be about 40% or more by then.
Chief Executive Officer Vas Narasimhan said the company has completed its transformation into a streamlined and focused drugmaker. It spun off its Sandoz generics business earlier this year.
“Pruned pipeline and greater efficiency are paying off in our view,” Peter Welford and Lucy Codrington, analysts at Jefferies, wrote in a note to clients.
Novartis is concentrating on four therapeutic areas, including cancer and heart disease, in four priority markets: the US, China, Germany and Japan.
The stock was little changed in early Zurich trading. It has gained about 9% this year, more than crosstown rival Roche Holding AG.
Novartis’s previous mid-term sales guidance was for annual growth of 4%.
(Updates with analyst comment in fourth paragraph, share price in sixth)
