CEO’s letter
2022 was a year of transformation for Novartis. After more than USD 100 billion in acquisitions and divestures over the last several years, our structural transformation from a diversified healthcare conglomerate into a focused, innovative medicines company will be largely complete after the planned spin-off of Sandoz in 2023.
We also begin 2023 with a simplified organizational structure that will spur innovation and give us a stronger foundation for growth in a rapidly changing global business environment.
As we look to the future as a focused medicines company, our dedication to innovation and excellence will drive us forward
While Novartis has pursued bold portfolio change, core elements of our company remain the same. Our vision is to become the most trusted and valued medicines company in the world – valued not only for our business performance, but also for the difference our innovation makes for patients and society.
The world is counting on us to succeed. Fewer than 10% of diseases known to affect humans are currently treatable, and globally, people live an average of 10 years with a disease or disability. Yet new treatments broadly still reach only a fraction of eligible patients, and manageable conditions like heart disease cause millions of avoidable deaths each year.
Our performance in 2022 showed that we are making progress in addressing society’s greatest disease burdens. Our focus on cardiovascular disease, for example, gives countries and healthcare systems solutions to address the world’s leading cause of death and disability. Entresto, our medicine for heart failure and hypertension, is estimated to be treating around 10 million patients worldwide, while our cholesterol-lowering siRNA treatment Leqvio is now approved in 70 countries.
We saw robust growth momentum across our in-market medicines. This includes stronger-than-expected uptake in the US for Pluvicto, our novel radioligand therapy for advanced prostate cancer, highlighting our ability to turn the promise of next-generation medicines into a reality for patients.
Despite challenging macroeconomic conditions and an unstable geopolitical environment, we delivered a solid financial performance that underscores the progress we are making, with 4% growth in net sales in constant currencies (cc) and 8% growth (cc) in core operating income compared with the previous year. Looking ahead, we aim to generate sales growth of 4% CAGR over the next five years, and grow above peer median beyond 2027.
Our investments in R&D are key to achieving these ambitions. In 2022, we saw a positive Phase III readout for iptacopan, which was discovered at NIBR, in a rare and deadly blood disorder. We saw an important positive Phase III result for Pluvicto in earlier lines of prostate cancer. And we also reported positive Phase III results for Cosentyx in hidradenitis suppurativa, offering the potential to expand one of our most successful medicines and bring a new treatment option to patients with this painful skin disease.
As we continue innovating for patients, millions around the world are still without proper access to healthcare. Translating the latest science into lasting progress requires us to work with healthcare systems and other stakeholders to advance access for underserved patients in low- and middle-income countries, while also tackling access barriers in some of the wealthiest countries in the world.
In the US, for example, we expanded our 10-year Beacon of Hope initiative, which seeks to address racial disparities in healthcare, including by increasing diversity among clinical trial participants and investigators. We also pledged to invest USD 250 million in R&D for the treatment of malaria and neglected tropical diseases, building on our decades-long commitment to global health priorities. We continue to make progress in other aspects of our ESG agenda, including reducing greenhouse gas emissions from our own operations by nearly half since 2016.
As we look to the future as a focused medicines company, our dedication to innovation and excellence will drive us forward. We have set clear growth ambitions and we are confident we will meet them. Through reshaping Novartis, we are set to reimagine medicine for decades to come.
Sincerely,
Vas Narasimhan
Chief Executive Officer