By Ludwig Burger
FRANKFURT (Reuters) - Novartis expects sales and core operating profit to rise around 5% this year, below some analysts' expectations, as the Swiss drugmaker weighs up interest in its generics business Sandoz from potential suitors.
The pharmaceuticals company raised the prospect in October of divesting Sandoz after years of revamping it, as price pressures mount in the off-patent drug sector.
Alongside quarterly results on Wednesday, Novartis reiterated it would give an update on the matter by the end of 2022 and that it could still retain the business.
Media reports have cited interest from private equity firms in particular, and a potential valuation of around $25 billion. Chief Executive Vas Narasimhan has also flagged interest from various suitors.
He said on Wednesday all options were on the table.
"We don’t have a bias towards any of these options at the moment. We are doing the work to finish the carve-out financials to provide that to relevant parties and we’ll see what proposals come back," he said.
Finance chief Harry Kirsch added significant progress was unlikely to be announced before the third or fourth quarter.
Core operating income for the fourth quarter ended Dec. 31 rose 9% to $3.8 billion, as higher drug sales offset in increase in marketing and development costs.
But Novartis shares were down 2.4% to 79.20 Swiss francs at 0933 GMT, erasing gains in the previous three trading sessions, as analysts at Third Bridge and Zuercher Kantonalbank said the 2022 guidance for "mid single digit" growth in sales and core operating profit was slightly short of some expectations.
Quarterly revenues from arthritis and psoriasis drug Cosentyx gained 13% to $1.24 billion, slightly below analysts' average forecast of $1.3 billion, based on Refinitiv data.
Revenues from heart failure treatment Entresto jumped 34% to $949 million, broadly in line with the market consensus.
Novartis forecast Sandoz sales would be broadly in line with 2021's $2.5 billion, while the division's core operating income was expected to fall at a low-to-mid single-digit rate.
Despite plans to buy back up to $15 billion worth of shares by the end of next year, Novartis has said it would retain enough spending power to buy companies and technologies, back its own research efforts and pay attractive dividends.
It proposed raising its dividend 3.3% to 3.10 francs per share, the 25th consecutive increase since its creation.
($1 = 0.9207 Swiss francs)