What You Need To Know About Novartis’ Top Selling Drugs

Novartis’ Q2 revenue

– Second quarter sales totaled $14.6 billion, up 2%.

– Emerging markets grew 8%.– Pharmaceuticals sales up 1% to $8.2

billion.– Alcon (eye care) sales up 4% to $2.8

billion.– Sandoz (generics) sales up 4% to $2.3

billion.– Consumer health sales up 5% to $1.05

billion.– Vaccines sales down 14% to $240

million.

Novartis’ revenue is growing slowly.

Pharmaceuticals = most important• Pharmaceutical product sales account for 56% of Novartis’ sales.• 3 blockbusters are grew more than 20% year-over-year in Q2.

Lucentis• Lucentis sales improved 7% to $619 million in Q2.

• Novartis’ owns ex-U.S. rights.

•Ex-U.S. market opportunity totals $6 billion annually by 2018.•Market share stabilizing in wet-AMD versus Regeneron & Sanofi’s Eylea.• First quarter 2014 Eylea global

net sales increased 54% to $577 million.

•Emerging markets growing more quickly than developed markets.

Gilenya• Gilenya sales improved 28% to $606 million in Q2.

•Ex-U.S. No. 1 market share for oral MS treatment.• Biogen’s Tecfidera launches

this year and threatens share.• Biogen’s Tecfidera approved

in March 2013.• Tecfidera has already

displaced Gilenya as the No. 1 oral MS drug in the U.S. with $460 million in Q1 U.S. sales.

Afinitor• Afinitor sales improved 25% to $384 million in Q2.

•Breast cancer approval helps drive sales growth.•5 potential label expansions by 2017.• HER2 breast cancer: 1st line.• HER2 breast cancer: 2nd/3rd

line.•Potential peak sales of $2 billion+.

Diovan headwind growsRough waters for its blockbuster Diovan.

•Sales fell 20% YoY in 2013 after losing patent protection.•Sales still totaled $3.5 billion in 2013.•Q2 sales weaker on U.S. inventory de-stocking ahead of generic launch.• Ranbaxy won FDA approval of its generic Diovan in June.• More risk coming.

Zometa headwind continues

Zometa sales have fallen even more quickly.• Zometa sales down 53% to $600 million in 2013.• Sales fell 53% to $76 million in Q2.• Sales are down 63% to $150 million in 1H2014.

Pipeline opportunity• Zykadia won FDA approval in April

for ALK+ non-small cell lung cancer.

• Small patient population.• 2nd line use behind Pfizer’s Xalkori.

• Xalkori sales of $350 million in 2013.

• LBH589 filed for FDA approval in Q2 for multiple myeloma.

• Outperformed Velcade in phase 3.• LDE225 filed for EU approval in Q2

for advanced basal cell carcinoma.

Fool-worthy thoughts•Pharmaceuticals segment headwinds increase this year due to Diovan monotherapy generic launch.•Lucentis’ wet-AMD sales stabilizing; however, Eylea label expansion to DME could threaten sales in 2015.•Tecfidera roll-out globally will eat into Gilenya ex-U.S. sales.•New drug approvals will need to offset considerable headwinds.

.Crush non-dividend paying stocks over the

long term.