Novartis AG Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Emily Field - Barclays - Analyst : Thank you so much for taking my question. I just wanted to ask for a bit more context just on the NATALEE delay of the PDUFA in the United States. Can you confirm that this was very specific to the manufacturing issue and that the FDA did not ask for any additional information with regards to any of the subgroups or any additional information from the clinical trials? Thank you.

Question: Florent Cespedes - Bernstein Research - Analyst : Good afternoon. Thank you very much for taking my question. A quick question on Cosentyx. The new indication in HS, could you give us some color on how you see the HS opportunity going forward? It seems that you are gaining new patients as you have a new treatment, more potent than the existing one. But there will be also new entrants in the coming years, so some color on this HS market opportunity would be great. Thank you.

Question: Emmanuel Papadakis - Deutsche Bank - Analyst : Thank you for taking the question. The pipeline question on ianalumab, which you pulled forward the readout in Sjogren's 2025. So just the drivers of that confidence on probability of success. And there's been a number of competitor updates in that space recently, so just perhaps you could refresh us with your thoughts on the magnitude of ESSDAI improvement. You're have been showing indeed whether you still consider that to be the right and definitive endpoint. Thank you.

Question: Richard Parkes - BNP Paribas - Analyst : Hi. Thank you for taking my question. I was going to stick on pipeline events in 2025. On pelacarsen, probably your next sort of multi-blockbuster readout. Could you just remind us what your powering assumptions are in terms of the benefit that you're looking to see in the Lp(a) HORIZON trial? And then can you talk about barriers to uptake of Lp(a) targeting agents? Obviously, PCSK9 uptake has been disappointing for investors partly attributed to the need for injections and costs. I'm just wondering if those barriers are going to also limit Lp(a) targeting agents or is the lack of available alternatives for patients with elevated LP(a), and I mean those barriers are less significant. So if you could just talk about that, that would be great. Thank you.

Question: Graham Parry - Bank of America - Analyst : Okay. Thanks for taking my question. Just wanted to come back to NATALEE actually. Can you just clarify, you still think there's no manufacturing site inspection needed for the new process? I think you said in Q1, you didn't expect to see -- assume you'd actually know by now. And just again, do you remain confident that there is no outcome coming and confidence in the broad label. I know there's some discussion in the market about the node-negative patient population and whether that's approvable or not. Thank you.

Question: James Quigley - Goldman Sachs - Analyst : Great. Thanks for taking the questions. I've got one on Pluvicto. Could you walk us through some of the competitive dynamics you're seeing in the US? I mean you mentioned some of the centers had 30% share. So what is the consideration there in terms of driving the increase in share in those centers? And then thinking also about the community centers, where are you in terms of the development of the community centers and Pluvicto and the offering there? And when you speak to docs, physicians in those centers, how are they thinking about Pluvicto, which is relatively more complicated than the androgen receptor inhibitors, which are overall simple and seems to be launching quite strongly as well? Thank you.

Question: Mark Purcell - Morgan Stanley - Analyst : Yeah. Thank you very much for taking my question. First of all, the revenue aspiration is for mid-single-digit growth out to 2030, and now on a 2024 basis, about $66 billion. And when we look at consensus, it's about $53 billion at the moment before the results that were very strong today, so about a $13 billion gap. So which growth drivers, in your opinion, does consensus underappreciate? And what are the key readouts and progress points that we should look out for, which should close the disconnect between expectations and your aspirations?

Question: Richard Vosser - JPMorgan - Analyst : Hi, thanks for taking my question. Maybe a question on pelabresib. Could you probably give us an update on your thinking and around the filing? What extra data do you need to file with the product? And what sort of conversations are you having with the regulators around that one? Thanks very much.

Question: Peter Welford - Jefferies - Analyst : Hi, thanks for taking my question. I want to just return to Pluvicto, if I can, please. Just to understand you talked about some of the barriers in terms of gaining share in some of the sites. But I'm curious, just with regards to the referral pathway and what you're seeing there. Because I guess if you're starting DTC, it would suggest that you've got a high degree of confidence in some of the patients, particularly in the community, can then get to specialist centers for the VISION indication. I guess maybe you can talk a little bit about your confidence about that referral pathway, of being able to get these patients with say then CDC, perhaps in the wider community into centers able to administer. And equally then, the phased dose you're talking about with the patient-ready dose. Is that at the moment, do you think, a limitation for the VISION population? Or is that very much geared towards the PSMAfore future use? Just to understand that. And if I can just ask on Germany for Pluvicto. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 12:00PM, NOVN.S - Q2 2024 Novartis AG Earnings Call Just is there a challenge in Europe from still from the sort of pay hospital, if you like, pharmacy created RLPs? Or are you able to overcome that, do you think, with Pluvicto?

Question: Peter Verdult - Citi - Analyst : It's Peter Verdult from Citi. Can we go big picture, please, on IRA. Just what are the latest you're hearing from your contacts about how the initial price negotiation process is going for the industry? How manageable you feel IRA is for Novartis going forward? And with pelacarsen in mind, whether there have been any developments that give you increased confidence you can get oligonucleotides to be given the same 13-year exclusivity period as biologics?

Question: Kerry Holford - Berenberg - Analyst : Hi. Yes, Kerry Holford, Berenberg. Just one quick question for me on remibrutinib. The delay of the filing in CSU into next year, you referenced a few CMC adjustments. So I wonder if you could provide a little more detail on that, what's required and how long the delays obviously? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 12:00PM, NOVN.S - Q2 2024 Novartis AG Earnings Call

Question: Seamus Fernandez - Guggenheim Securities - Analyst : Thanks so much for the question. So Vas, the question is really for you strategically, as you look at the growth opportunities in the industry and across the industry, oncology, immunology and now cardiovascular metabolic disease with obesity, are all core therapeutic areas. One area that Novartis is not currently present in is obesity. You've been in a position to think strategically and act strategically in immuno-oncology, perhaps with disappointment. Just interested to get your thoughts on the opportunity for a late entry into the obesity market, and how Novartis could potentially or would potentially make sense of that strategically, whether with existing assets or only as a completely novel approach or novel mechanism moving forward? Thanks so much.

Question: Rajesh Kumar - HSBC - Analyst : Good afternoon. Just on capital allocation. You have maintained a very capital disciplined approach in terms of what sort of valuations you're paying for M&A as well as what sort of returns you're looking at. When you are in competitive situations, can you give us some color if your competitors are behaving in a similar way? And if they are not, what are the tools you have to work around that?

Question: Jo Walton - UBS - Analyst : My question comes back to Pluvicto, if I could. And just to look at the number of cycles that a patient is actually taking. I know the maximum is six. If you could tell us what you think the level is today. I think it is quite a bit below six. And how we should be thinking about that going forward into new indications? Do you think you are going to be able to expand the number of cycles? Many thanks.

Question: Tim Anderson - Wolfe Research - Analyst : Hi. If I could come back to IRA. There's no formal gag order preventing drug companies from talking about price negotiations that are ongoing. But CMS still seems to be out there telling all the companies that basically to keep quiet about it, and all the companies are obliging. And I'm trying to figure out why. One could read into this that CMS doesn't want companies saying, it's no big deal. We can manage it, because that would take away from a later announcement by them about the big price concessions that they've been able to achieve. So can you kind of share your thoughts on that one aspect of IRA. Thank you.

Question: Graham Parry - Bank of America - Analyst : Thank you. Great. Just a follow-up on Kesimpta, obviously had a very strong quarter there. I just wondered if you think you might need to really visit your peak guide there. And if so, when. And if you can just help us understand how far penetrated do you think you are into peak opportunity in the US and then rest of world, which now seems to be driving almost as much of the growth as the US?