By Helena Smolak

Novartis raised its 2025 outlook after high demand for key drugs drove first-quarter profit and sales above expectations, becoming the first among peers to lift forecasts this quarter despite looming competition for its heart drug Entresto.

The Basel-based drugmaker is bracing for headwinds from the U.S. patent expiry for its biggest moneymaker Entresto. It expects U.S. competition for Entresto, cancer drug Tasigna and Promacta that treats low blood platelets, to begin in mid-2025, kicking in a weaker second half as patent expiries take effect, chief financial officer Harry Kirsch said in a media call. For Entresto, Novartis estimates generic competition around July, which could, however, vary depending on the timing of court battles.

The Swiss pharmaceutical major said Tuesday that it now expects sales to grow at constant currencies at a high single-digit percentage in 2025, compared with previous guidance of between mid- to high-single digits. It forecasts its core operating income to grow low double-digits at constant currencies, while it previously saw growth at between high-single digits and low double-digits.

Novartis said earlier this month it would spend $23 billion in the U.S. over the next five years to preempt looming U.S. import tariffs. "Tariffs are fully manageable for us this year and we expect them also to be manageable in a mid- to long-term outlook," Chief Executive Vas Narasimhan said in a call with reporters. The company's goal is that 100% of its U.S. products are produced locally within the next five years and it won't make changes in patents or transfer pricing, Narasimhan said.

Its core operating profit--one of its preferred earnings metrics, which strips out exceptional items--rose 23% on year in the first quarter to $5.575 billion. The profit increase was driven by higher net sales, partly offset by higher research and development and drug launch investments.

Sales climbed to $13.23 billion from $11.83 billion. Strong growth in sales of the company's Entresto heart drug, breast-cancer treatment Kisqali and psoriasis treatment Cosentyx helped the top line. Entresto and Consentyx both topped $1 billion in quarterly revenue. Positive pricing effects, benefiting from revenue deduction adjustments mainly in the U.S., more than offset generic competition, the company said.

Analysts polled by Visible Alpha had forecast the company's first-quarter core operating profit at $5.22 billion and sales at $13.00 billion.

The company said it is confident in its mid- to long-term growth outlook.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

April 29, 2025 02:54 ET (06:54 GMT)

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