Novartis stock slumped Thursday after the health giant reported light sales for its second-biggest moneymaker, Cosentyx.
Cosentyx treats autoimmune conditions, including plaque psoriasis and psoriatic arthritis. During the second quarter, Cosentyx brought in $1.63 billion in sales, widely missing the Street's call for $1.75 billion, according to FactSet.
Promisingly, sales of heart failure treatment Entresto beat forecasts at $2.36 billion. Analysts called for $2.3 billion from Novartis' bread-and-butter drug. But Novartis recently lost a patent decision in U.S. court, meaning generic competition is coming.
Edward Jones analyst John Boylan says Novartis otherwise continued "its streak of good quarters featuring solid cost control." But "we also believe this outlook is reflected in the price of the shares, as evidenced by Novartis' P/E (price/earnings) ratio trading above its peers."
Novartis stock fell 3.3%, closing at 114.52. Shares, which had been lingering in the 5% chase zone, undercut a buy point at 116.91, according to MarketSurge.
Novartis Stock: Earnings Easily Beat
Across all products, Novartis sales grew 12% on a strict, as-reported basis to $14.05 billion. In constant currency, sales climbed 11%. Sales were roughly in line with expectations for $14.07 billion, according to FactSet.
The company also earned $2.42 per share, which beat forecasts for $2.35 a share and grew 23% vs. the year-earlier period. Excluding the impact of exchange rates, earnings advanced 24%.
Novartis kept its outlook for sales to grow by a high single-digit percentage this year. That's in line with analysts' forecast for $54.76 billion in sales, up almost 9% on a strict, as-reported basis.
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