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Speaker 1: We're deep in the weeds of earning season. Novartis has

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Speaker 1: given us their third quarter sales that beat the analyst estimates,

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Speaker 1: with guidance coming in line as the firm raises its

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Speaker 1: profit forecast for the third time. This is the first

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Speaker 1: report since spinning off Sando's generic business.

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Speaker 2: Joining us night to discuss the numbers is.

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Speaker 1: The CEO vas Narasimhan, joining us from Vasil.

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Speaker 2: Good to have you with us. You know what went

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Speaker 2: through my mind when I looked at this.

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Speaker 1: I saw you six years ago and you set off

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Speaker 1: on a journey to change this company. How unshackled are

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Speaker 1: you today with these numbers after the spinoff?

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Speaker 3: Good morning Vaz, Good morning man Is, Good morning Danny.

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Speaker 3: Great to see you both. You know, it's been a

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Speaker 3: six year journey to transform nev Artists into a pure

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Speaker 3: play innovative medicines company. We've done about one hundred billion

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Speaker 3: dollars of transactions over this time. We created three global

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Speaker 3: leading businesses support of the creation of a consumer health business,

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Speaker 3: the Alkoni device business, spun off Sandos into a leading

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Speaker 3: generics company. And now what I see everyone is seeing

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Speaker 3: coming through in the third quarter is no of artist

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Speaker 3: as a pure play innovative medicines, I think powerhouse, and

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Speaker 3: you see we were able to deliver double digit sales

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Speaker 3: growth over twenty percent core core profit growth, which really

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Speaker 3: shows I think the business now really showing what it

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Speaker 3: can deliver as a pure play innovative medicines company.

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Speaker 4: What do you think then, is the next challenge that

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Speaker 4: you face on the horizon given you pivoted to this

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Speaker 4: pure play model, what do you need to conquer next?

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Speaker 3: You know, for us, it's going to be delivering in

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Speaker 3: our four core therapeutic areas. A big mantra now inside

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Speaker 3: the company is focus, focus, focused, and we need to

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Speaker 3: keep delivering strong pipeline assets and launches in oncology, cardiovascular

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Speaker 3: and renal diseases, immunology, and neuroscience. And when you look

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Speaker 3: at the portfolio of medicines that we have, we think

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Speaker 3: we have nine major medicines that have multi billion dollar

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Speaker 3: potential that can deliver that growth over the coming years.

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Speaker 3: We've guided to four percent plus growth and forty percent

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Speaker 3: core operating income margins out to twenty twenty seven. And

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Speaker 3: when you look at the performance of some of those

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Speaker 3: growth drivers, we're really excited about the performance of our

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Speaker 3: breast cancer drug Kiscali, our multiple sclerosis drug Kasimpta, the

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Speaker 3: emerging performance of our Pluvicto prostate cancer medicine, amongst others.

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Speaker 3: So I think everything's headed in the right direction, but

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Speaker 3: of course we're going to have to consistently deliver on

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Speaker 3: that pipeline and launches to be successful.

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Speaker 1: Look the one hot button topic, and we'd like you

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Speaker 1: to have used from a couple of different angles here

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Speaker 1: is obviously on the obesity drugs. I mean, the world

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Speaker 1: is in a frenzy at the moment you dropped one

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Speaker 1: from development mb out nine for nine. You talk about

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Speaker 1: high risk and high reward. Where are you in that

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Speaker 1: narrative in the ABCD drugs? What comes next for nevatis?

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Speaker 1: What have you got in the pipeline? How do you

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Speaker 1: plug that hole?

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Speaker 3: Look on Obcity, we're taking a much more next gen

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Speaker 3: look at what could come in the future. We have

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Speaker 3: early stay research efforts looking at what mechanisms might support

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Speaker 3: patients to impact obesity. And we really look at this

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Speaker 3: from the lens of how can we impact cardiovascular disease

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Speaker 3: and renal diseases, which are core to our long term focus.

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Speaker 3: But what I like to think about is, rather than

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Speaker 3: chasing the herd into obesity. Where can we deliver breakthrough

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Speaker 3: innovation where we're really uniquely positioned, and that's in this

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Speaker 3: whole new class of oncology drugs called radiolgan therapy. It's

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Speaker 3: in using cart therapies to really deliver almost cures in

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Speaker 3: severe immunological disease, which is remarkable and continuing to be

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Speaker 3: in the leader in RNA therapeutics. These are three very

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Speaker 3: large markets, we think twenty to thirty billion dollar markets

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Speaker 3: over time that we can build and have a leadership

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Speaker 3: position to really drive long term growth.

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Speaker 4: So you're looking perhaps past the frenzy that we see now,

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Speaker 4: but that's just on that point because manage is so right.

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Speaker 4: Everywhere you turn, everyone is talking about these weight loss

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Speaker 4: medications to the point raeven Nesslie is talking about giving

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Speaker 4: out products that complement things like ozepic, and we go,

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Speaker 4: what is the risk Is there a risk in that

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Speaker 4: of this absolute madness we've seen around these products.

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Speaker 3: Look, I think these medicines are really impactful, and these

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Speaker 3: GLP one and GLP one agonists have really delivered important

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Speaker 3: benefits for patients across a range of different indications. But

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Speaker 3: I think always we have to look at risk benefit.

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Speaker 3: Nothing comes for free when you're giving these kinds of therapeutics,

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Speaker 3: and as you go broader and broader, you inevitably will

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Speaker 3: pick up safety signals. And also I think one of

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Speaker 3: the questions is long term use. How will patients stay

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Speaker 3: on these medicines. Will they lose muscle mass over time?

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Speaker 3: Will there be impacts on cardiovascular risk because of the

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Speaker 3: impacts on heart rate and other factors. So these are

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Speaker 3: all things I think the next generation of drugs are

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Speaker 3: going to need to address. But I think it's important

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Speaker 3: also from a public health standpoint, diet, exercise, some of

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Speaker 3: the fundamentals can't be lost. There's nothing that really comes

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Speaker 3: for free. When you think about longevity.

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Speaker 2: No, I can assure you there's nothing for free.

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Speaker 1: You've just got to do more miles on the treadmill

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Speaker 1: or walking around New York. At look, we could have

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Speaker 1: endless conversations about those drugs and the societal impact, but

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Speaker 1: we're here to talk about you and your business.

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Speaker 2: Rush does a seven billion dollar deal.

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Speaker 1: The natural sort of generic questions, do you feel onderpressure

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Speaker 1: to do another deal?

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Speaker 2: Let's dispense with that.

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Speaker 1: Where is the market Is it getting more expensive for

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Speaker 1: you to do the kind of deals that you want

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Speaker 1: to do.

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Speaker 2: Given the heat that.

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Speaker 1: Somebody like Rosh has turned up in the market, what

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Speaker 1: is the deal objective for you? You're six years in,

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Speaker 1: what do you want to I'm not saying it's your

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Speaker 1: swan song. You could be there for another six years,

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Speaker 1: but what kind of deal do you want to do?

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Speaker 1: That sort of says yes, I was here.

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Speaker 3: Our focus is on these bolt on M and A

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Speaker 3: deals that are within our core therapeutic areas that really

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Speaker 3: build scale with those fourth therapy areas I talked about,

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Speaker 3: or they give us a further technology advantage, like we

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Speaker 3: did an early stage deal in the area of small

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Speaker 3: interfering RNAs in these technology platforms we're trying to build,

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Speaker 3: you know. When I look at the market overall, of course,

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Speaker 3: the biotech sector is having its second year of really

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Speaker 3: historic lows, at least the historic lows over the last decade,

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Speaker 3: So certainly the valuations can be supportive of activity. But

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Speaker 3: really we're driven by the science and we need really

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Speaker 3: really strong stands to make these bets. I think it's

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Speaker 3: critical to look very carefully at these assets and make

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Speaker 3: the appropriate valuations.

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Speaker 4: Oh man, I see, I was looking for the tie

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Speaker 4: of can we judge how relaxed Vas is dressed depending

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Speaker 4: on whether or not he's moving into biotech or not.

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Speaker 4: We'll have to play that game next time.

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Speaker 2: Vas, all right?

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Speaker 4: Does that mean then, if you're looking for boltons that

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Speaker 4: the era for transformative M and A for your sector,

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Speaker 4: for you and your peers, are we far from it?

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Speaker 2: Are you going to.

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Speaker 4: Leave the bankers just waiting and hoping for those types.

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Speaker 3: Of Well, the bankers will keep coming, I'll assure you

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Speaker 3: of that. But you know, I think when you look

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Speaker 3: at our sector over the long run, there really hasn't

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Speaker 3: been significant consolidation in over a decade. And part of

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Speaker 3: that is just the reality that beyond a certain scale,

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Speaker 3: you don't get further scale effects from getting bigger in

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Speaker 3: R and D or getting bigger in the commercial environment. Now,

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Speaker 3: of course, policies squid shift that we make that more

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Speaker 3: attractive five years from now, But in the near time

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Speaker 3: I don't see consolidation events. I really see everyone trying

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Speaker 3: to focus in collect good assets from the biotech sector,

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Speaker 3: focus on their internal R and D engine, and hopefully

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Speaker 3: drive successful launches in the market.

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Speaker 4: That's really wonderful to catch up with you this morning.

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Speaker 4: Please come join us anytime, whether whether earnings results or not.

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Speaker 4: Fas Narasimhan, they're than nevartists CEO