Novartis raises core profit guidance, books $1.9 billion hit from drug trial setback

ZURICH/LONDON, Oct 27 — Novartis raised its full-year core ​operating income guidance on Tuesday but also booked a $1.9 billion partial impairment ‌charge related to a pipeline setback in September.

The ⁠Swiss drugmaker now ​expects core operating ⁠income to grow by a low ‌single-digit percentage ‌compared with the low single-digit decline ⁠previously expected. It maintained ⁠its forecast for low single-digit net sales growth.

In the third quarter, core operating income increased 10% at constant exchange rates thanks to higher net ‌sales, the Basel-based company ​said.

Reported operating income, the non-adjusted figure, declined 61%, which Novartis attributed to higher research and development costs and a $1.9 billion partial impairment charge for del-desiran, one of two consecutive major ​trial setbacks unveiled in September ‌that sent ‌shares ⁠tumbling.

The drug, which was being tested for myotonic dystrophy, a muscle-wasting disease with no approved treatments, was obtained through ‌Novartis' $12 billion acquisition of ​Avidity.

(Reporting by Marleen Kaesebier, ‌Bhanvi Satija ⁠and Patricia ​Weiss, Editing by Friederike Heine and Thomas ​Derpinghaus)

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