Novartis’s 1Q17 Estimates: Innovative Medicines Segment
Innovative Medicines segment
Novartis’s (NVS) Innovative Medicines segment, formerly the Pharmaceuticals segment, consists of products for therapeutic areas such as oncology, cardiometabolic, immunology, dermatology, retina, respiratory, neuroscience, and established medicines. The segment includes research, development, manufacturing, distribution, and selling of patented prescription drugs throughout the world.
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The overall contribution of the Innovative Medicines segment is about 67.0% to Novartis’s total revenues.
Expectations for key products
Gilenya, Tasigna, Galvus, Mekinist and Tafinlar, Promacta and Revolade, Jakavi, Entresto, and Cosentyx, a new product, are expected to report growth in 1Q17.
Gilenya is an oral therapy for multiple sclerosis. Due to the increased demand for Gilenya, its revenues are expected to rise in 1Q17. Gilenya competes with Biogen’s (BIIB) Tecfidera and Sanofi’s (SNY) Aubagio.
Tasigna, used in the treatment of chronic myeloid leukemia, is expected to report revenue growth in 1Q17. Tasigna competes with Pfizer’s (PFE) Bosulif.
The combination of Tafinlar (dabrafenib) and Mekinist (trametinib) is used in the treatment of BRAF V600+ metastatic melanoma. The combination is expected to report revenue growth in 1Q17.
Medicines losing market share
Many pharmaceutical products are exposed to competition due to patent expiration or better products that enter the market. Those products are expected to report a fall in 1Q17. Some of those products include Gleevec, Afinitor, Lucentis, Exelon Patch, and Exforge.
To divest the risk, you can consider ETFs such as the First Trust Value Line Dividend ETF (FVD), which holds 0.50% of its total assets in Novartis.