By John Miller
ZURICH (Reuters) - Novartis (S:NOVN) saw first-quarter sales climb as hospitals and patients stocked up on drugs to avoid being left short during the coronavirus crisis, lifting profits for the Swiss drugmaker.
The company reported on Tuesday that core net income rose 34% to $3.55 billion, exceeding the average analyst forecast in a Refinitiv poll of $3.17 billion. Sales climbed 13% to $12.3 billion, above the poll average of $12 billion.
The result topped Novartis's 2020 forecast of mid to high single-digit percentage growth for revenue and high single-digit to low double-digit growth for operating profit.
But Chief Executive Vas Narasimhan stuck to his existing outlook, saying the rush for supplies would ease as customers' shelves were now well stocked.
"We assume Q2 healthcare systems return to normal operations, and with that we can come back to our originally planned performance in 2020," Narasimhan told reporters on a call.
The shares were little changed at 88.28 francs.
Net income rose 16% to $2.2 billion, Novartis said, adding operations did not face significant disruptions from the pandemic that has killed 210,000 people worldwide and sickened at least 3.1 million.
Sales from Novartis's innovative medicines division rose 13% to $9.8 billion, driven by its skin and arthritis drug Cosentyx and a nearly two-thirds revenue jump for heart failure drug Entresto.
Its Sandoz generics unit pushed revenue 11% higher to $2.5 billion, as its biosimilars -- copies of biological medicines -- muscle in on patent-expired drugs made by rivals, mostly in Europe.
"The overall result ... is positive," Zuercher Kantonalbank analyst Michael Nawrath, with an "overweight" rating, said.
TRUMP'S GAMECHANGER
Novartis is running a 440-person trial of its generic drug hydroxychloroquine in COVID-19 patients, after the decades-old medicine was touted in March by U.S. President Donald Trump as a potential "gamechanger" despite a lack of scientific evidence that it works.
Trump's advocacy of hydroxychloroquine, followed by swift action by U.S. officials to make it available for coronavirus patients, has raised questions about whether political pressure had overridden scientific criteria in the crisis.
Narasimhan, who has labelled hydroxychloroquine as Novartis's biggest COVID-19 hope, said science is playing catch-up after the pandemic caught the world unaware.
He said drugs being trialled by industry so far had not yet produced adequate data but said he hoped that would change soon.
"Those data vary, based on the dose, based on the setting that the medicine is used, based on the healthcare system -- all the more reason we need properly powered, randomised, controlled, blinded studies," he said.
"By the summer, we will have that data," he added.