On Tuesday, Novartis AG (NYSE:NVS) reported third-quarter sales of $12.823 billion, up 9% (+10% on constant currency), beating the consensus of $12.76 billion.

Guidance: Novartis also raised its 2024 full-year guidance again this year.

In a statement, Novartis said it expects full-year core operating income to grow by a "high teens" percentage, compared with previous guidance of a "mid-to-high teens" percentage.

Novartis forecasts full-year sales growth in the low double digits, having previously guided for high-single to low-double-digit growth.

Pelabresib filing was further delayed, triggering a $800 million impairment charge related to the $2.9 billion acquisition of MorphoSys.

Earlier this year, MorphoSys faced a burgeoning safety concern surrounding pelabresib.

Goldman Sachs notes that MorphoSys-related impairment charge is somewhat underwhelming, raising doubts about the company's M&A strategy.

Truist notes that Novartis is concentrating on preparing the market for the PSMAFore label, which is expected to triple its addressable market.

They also pointed out that growth opportunities in China and Japan, and metastatic hormone-sensitive prostate cancer (mHSPC) and oligometastatic disease, could push Pluvicto's sales well above the projected $2 billion peak.

The company is committed to maximizing the potential of Pluvicto and its radioligand therapy (RLT) portfolio.

For other radiopharmaceutical companies targeting PSMA, entering this market may become more challenging.

A crucial question remains regarding the standards that must be met to compete with more effective radioligand products. This context relates to companies such as Eli Lilly And Co (NYSE:LLY) and Bristol Myers Squibb & Co (NYSE:BMY), which have RLT products in their pipelines, as well as smaller companies, including Y-mAbs Therapeutics Inc (NASDAQ:YMAB) and Perspective Therapeutics Inc (NASDAQ:CATX).

Novartis highlighted continued strong growth and momentum and sees room to grow the market size for B-cell inhibition in multiple sclerosis, relating Biogen Inc (NASDAQ:BIIB).

Truist highlights Novartis' strong balance sheet, which enables further bolt-on deals and share buybacks. Recent transactions primarily involve deals in the sub-$1 billion range, along with a few larger bolt-on acquisitions.

A Truist analyst indicated that they will be monitoring how the adoption of Leqvio may affect Amgen Inc's (NASDAQ:AMGN) Repatha and Regeneron Pharmaceuticals Inc's (NASDAQ:REGN) Praluent. Meanwhile, Novartis has reported that the launch is advancing smoothly, and Leqvio continues to grow, outpacing the overall market as per the management.

Novartis' Cosentyx witnessed strong uptake and continued brand growth driven by hidradenitis suppurativa expansion, and the market opportunity can accommodate several players, Abbvie Inc (NASDAQ:ABBV), Incyte Corporation (NASDAQ:INCY), and Kymera Therapeutics, Inc. (NASDAQ:KYMR).

Price Action: NVS stock is down 0.48% at $110.00 at last check Wednesday.

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