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Stock Watch: Novartis Earnings Get Interesting Boost

How Interest Rate Rises Help Prop Pharma Profits

 
• By Andy Smith

A number of facets from last quarter’s earnings season carried over to Novartis’s first-quarter report, including pipeline attrition and the dependence of sales growth on a single product. While new, still minor products are hoped eventually to buffer its patent expiries, help from another corner has emerged.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

Unlike Johnson & Johnson’s (J&J’s) first-quarter earnings report the previous week, which was met with a stock price fall, Novartis AG’s first-quarter earnings announcement was accompanied by a 4% stock price rise to a dizzy three-year high. By comparison, the NYSE Arca Pharmaceutical Index (DRG) finished barely in positive territory on the same day.

Novartis’s first-quarter 2023 net sales grew by just over 3% on the same quarter of 2022 while earnings per share (EPS) grew by a stonking 17%. Sales and EPS beat analysts’ estimates by just over 3% and by 11%, respectively

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