Novartis (NVS) Q4 2020 Earnings Call Transcript

Novartis (NVS 0.14%)
Q4 2020 Earnings Call
Jan 26, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and good afternoon, and welcome to the Novartis Q4 and full-year 2020 results release conference call and live audio webcast. [Operator instructions] The conference is being recorded. [Operator instructions] A recording of the conference call including the Q&A session will be available on our website shortly after the call ends. [Operator instructions] With that, I would like to hand over to Mr.

Samir Shah, global head of investor relations. Please go ahead, sir.

Samir Shah -- Global Head of Investor Relations

Much and good morning and good afternoon to everybody. And thank you for taking the time to join us on this Q4 full-year results presentation. The information presented today contains forward-looking statements that involve known and unknown risks uncertainties and other factors. These may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements.

Please refer to the company's Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors. And thank you again for joining us and I'll hand across to Vas Narasimhan. Vas?

Vas Narasimhan -- Chief Executive Officer

Thank you, Samir. I also wanted to say thank you, all, for joining today's conference call. If we move to Slide 3, with me today, I have a number of my ECN colleagues, Harry, Susanne, Marie-France, John Tsai, Richard, and Shannon. And we'll be available to take your questions and also will be joining me for parts of the -- the presentation.

So, if we move to Slide 5, over the past three years, we've been executing on a strategy we set out in 2018 to focus the company -- focus on certain geographies to accelerate our growth and to focus on five strategic priorities that we remain committed to and believe in the long run will enable Novartis to sustainably grow and sustainably have impact on healthcare around the world and deliver on our purpose to reimagine medicine. Now, when you look at some of the proof points as we've set out on this journey, we believe we're making good progress. Always more to do, always things to learn where we're making good progress. We're 100% focused now as a medicines company; we have a leading pipeline across 10 therapeutic areas for advanced therapy platforms, unique in that having only 8% of our sales, and one product, and over 15 blockbusters; we have achieved $2 billion in cost savings over the last three years; a leading data science platform that's enabling us to weather this pandemic and I believe sets us up for the medium and long term; consistently improving ESG scores, now with sector-leading performance in four key indices; and from a culture standpoint, record-high engagement scores across multiple different measures.

Now, moving to Slide 6, when you look at how the strategy is translated into operational performance, we see solid operational performance over the past three years with sales growing 5% from $42 billion now, approaching $49 billion core up and growing double digit at 10%, exceeding now $15 billion. And we've reached our goal -- our initial goal of innovative medicines core margin to 35%, on our way to our mid-term goal of the high-30s which we are well on track to achieve. Now, turning to this year's perform -- sorry the 2020 performance and Q4 performance on Slide 7, you can see a breakdown of some of the key drivers. As you saw on our release, net sales for the full year were up 3% and core operating income up 13%.

Our overall performance in Q4, as well as the full year, were driven by our key growth drivers Entresto and Cosentyx continuing to demonstrate double-digit growth. A broad range of oncology medicines also demonstrating double-digit growth. And taken together. we now have over half of our sales coming from our key growth drivers and launches in innovative medicines, positioning us well for the future and positioning us well to overcome the patent expiries we have in this period and continue to drive growth through 2025 and beyond.

Now, moving to Slide 8, I wanted to dive into a few of the products and Sandoz before turning it over to my colleagues. First, on Zolgensma, full-year sales were $920 million in the first full year since launch. Medicine is now registered in 37 countries. We're making very good progress in the rollout of this medicine around the world.

As you saw in Q4, we had sales of $254 million which were lower than Q3. This was driven primarily by COVID-19-related impacts, delaying new starts as hospitals face disruption and we saw physicians delaying starts or switches to the product, as well as delays in reimbursement decisions in some of the European and emerging markets we're currently working with. We expect this impact to continue through the first half of 2021. We would expect sales in that Q3-Q4 range before an acceleration in the second half of the year.

But we remain confident in the longer-term potential of the medicine in the IV form to reach ultimately $2 billion. It remains the treatment of choice for newly diagnosed patients. We're seeing about 15% of patients in the EU in the older-than-2-year-age range. We're on our way to get access in nine EU countries which would be about 25% of the population.

And we have important formal reimbursement decisions in 15 countries over the coming year to two years. So, taken together, we think we're on the right track. When you look at the IT program, we continue to await the animal data which we expect to have in the middle of this year -- to the back half of this year to remove the partial clinical hold if the data is -- confirms the safety profile. We are working with the FDA to finalize the design of a pivotal confirmatory study which we would rapidly plan on implementing.

We continue to pro -- progress our 10 early stage portfolio -- programs in gene therapies with two INDs and clinical trial starts planned in 2021. Now, moving to Slide 9, I also wanted to say a word regarding our performance in China. Now, as you saw in our release, we were very, very pleased with our growth in China with sales growing 16%, second fastest among multinationals in China. Our goal is to double our sales in the country by 2024, making China the second-largest market for Novartis in the world.

Our key growth driver is similar to what we see in other geographies. Our Entresto, Cosentyx, as well as our other oncology strategic brands. What's very notable, I think, is the number of NRDL listings we achieved, we believe the highest in the -- in the industry in 2020. We also have a rich pipeline with seven approvals expected in 2021.

So, taken together, we think we're on the right track to reach our goals in China and really continue to dive -- drive dynamic growth in this important market. Now, moving to Slide 10. With respect to Sandoz, you saw in the full year, Sandoz matters the sales guidance largely in line for the full year and the quarter. Importantly, Sandoz was able to drive 15% core operating income growth moving its core margin up to 24.2%.

Some of the pushes and pulls for Sandoz a continued strong biopharmaceuticals performance with 19% growth, primarily in -- in the European market but also held back a bit by our retail -- retail declines we saw driven by COVID-19 and the U.S. oral solids business that we now retained. I think taking a longer-term view on Sandoz, we remain determined to build a business that can grow mid-single digit with margins in the mid-to-high 20s, really competitive with the top end of the peer set. And we expect to be able to do that through a robust biosimilars pipeline, as well as high LOE coverage among small molecules through the 2024 period.

Now, moving to Slide 11, I didn't want to say a word about the company's efforts to overcome the COVID-19 challenges we see in the marketplace. Harry will talk a little bit more about our guidance. But certainly, when you look at the healthcare systems' performance over the back half of last year, we continue to see a situation where healthcare systems didn't return fully to their pre-pandemic levels. Here on the left-hand side of the chart, you see two examples.

In dermatology, we continue to see patient visits and NBRx below the pre-pandemic levels. In the bottom, you can see in the oncology markets, depending on the cancer setting, you have biopsy and surgery rates below pre-pandemic levels, also in the CDK4/6 market. So, for the first half of the 2020 -- 2021, we expect to continue to see challenges for -- for certain therapeutic areas such as dermatology and ophthalmology, as well as in Sandoz retail. We expect that some of our new launches will be impacted though we expect to continue to see solid progress and you'll hear more about that from Marie-France on preparing for these launches to accelerate in the back half of the year such as Kesimpta and Mayzent.

And we also know products that involve hospital initiation such as Kymriah, Lutathera, and Zolgensma will face a tougher situation in the first part of the year. Again, we would plan to overcome that in this period and then hopefully see acceleration in the second half of the year. Now, moving to Slide 12. Returning to our innovation performance and innovation milestones in Q4, we saw the approval of Leqvio in the EU six months ahead of schedule.

We saw the positive FDA AdComm for Entresto in preserved ejection fraction heart failure, as well as a number of other notable achievements, a number of designations achieved for iptacopan and ligelizumab, I think demonstrating the potential of these medicines as they continue to progress in late-stage development. We also signed an important in-licensing deal on tislelizumab with BeiGene for anti-PD1, which we hope we'll be able to file later this year in the U.S. and other markets. I also wanted to say a word, as I know there have been a number of questions on Leqvio and an update on the CRL.

Now, first and foremost, it's important to note that there are no safety, efficacy, or product-related concerns with respect to Leqvio in the CRL. The -- as I mentioned, the EU fully approved this product out of the same facilities that we also filed for the U.S. FDA. The CRL was related to facility inspection related conditions, primarily related to documentation and controls -- certain control systems at a third-party manufacturer in Europe.

We expect based on the third party's readiness to complete the request made by FDA to be able to submit the documentation and other requests of FDA in the Q2, Q3 time period. We still do not know if the FDA will ultimately want to inspect this facility. As noted previously, the FDA had originally planned to inspect this facility in May of 2020. They are currently not conducting overseas inspections in situations like this.

So, we'll continue to have to work with the FDA to try to expedite that inspection. And we're concurrently working on a tech transfer to add our own Novartis facility in shops now for the production supply chain of Leqvio. So, we remain confident we will get this product approved as fast as possible and then continue our plans to launch this medicine, which -- in a highly effective way, which Marie-France will go through in a bit more detail in a moment. Now, moving to Slide 13, other innovation milestones that we expect for 2021.

Multiple major approvals, Kesimpta in the EU, Entresto -- have passed for an expanded indication for Entresto, a number of major submissions you can see listed here including asciminib in CML. We have also a range of major readouts that -- which would enable submissions in 2021, notably canakinumab, sabatolimab, MBG453, and Lu-PSMA, among others. We also will hope to see the readouts of ligelizumab and Cosentyx which would enable submissions in 2022. And I also wanted to say a word on our next wave of assets, which you can see on Slide 14.

Here, we lay out the five life cycle management programs, five pharmaceutical programs, five oncology programs, and five wildcards we highlighted in our Meet the Management meetings. And in many of these programs, we have milestones expected in 2021. You can also see the milestone chart in the appendix of this document. I'll note a few.

We expect the PARADISE post-AMI trial to read out in the first half of 2021. I already mentioned Cosentyx in hidradenitis suppurativa, the Kisqali-MONALEESA-2 OS in the second half of 2021. We'll see important mid-stage readouts for iptacopan in IgA nephropathy at C3G. We'll see also an important Phase IIb start for branaplam in Huntington's disease.

And then, of course, the range of oncology milestones as well across the oncology -- various oncology molecules. Important to note, in all of these projects, we have full teams working to accelerate them and working as fast as possible to maintain their progress through the pandemic and beyond. Particularly, we're looking forward to continue to advance our SHP2 inhibitor and our c-RAF inhibitor as well in the oncology portfolio. So, I hope that gives you an overview of our story -- well, mid- and long-term story, most importantly, but also our story in Q4 and for 2021.

And with that, I'll hand it over to Marie-France. Marie-France?

Marie-France Tschudin -- President, Novartis Pharmaceuticals

Thank you, Vas. So, going on to Slide 16. Good morning, good afternoon. I'm pleased to update you on the 2020 performance for pharma.

We grew 5% year-over-year in a challenging environment. And our growth drivers, Cosentyx and Entresto, showed continued momentum and now account for $6.5 billion in revenues. But the story that stands out here is the shift that you see in our portfolio. The contribution from growth drivers and launches went from 33% to 43%, and that demonstrates our replacement power in light of several patent expiries expected.

We're delivering strong operational performance in the end-market growth drivers. We also made progress in the next wave of potential launches, providing the basis for growth in 2021 and beyond. Slide 17, once again, Cosentyx delivered double-digit growth and reached $4 billion for the full year. Our focus is on continuing to compete strongly to maintain our position in dermatology and accelerate in rheumatology.

We know what we need to do to grow. We need to make sure we maintain broad access and balance that with a long-term value of Cosentyx, and you can expect us to continue to do that. We'll expand into new geographies. In fact, we're now the only innovative biologic with broad NRDL listing in China.

And we'll make sure that we're competitive in the marketplace with our industry-leading approach to data and presence, as well as a number of new indications as we deliver on our ambitious life cycle management program. There is still tremendous opportunity in this market. And between the data, the access, and our outstanding teams, we have what it takes for Cosentyx to continue to grow. On Slide 18, Entresto continues to deliver 44% full-year growth, and the momentum continues across all of the geographies.

As you know, we're the only single-use medicine proven to be superior to previous standard of care. And thus, we're in a strong competitive position. It's also great to see that the American College of Cardiologists expert consensus now recommends that heart failure patients go direct to ARNI. And this puts Entresto in a pole position for the 75% of patients who are still on standard -- standard -- sorry, previous standard of care.

We also have exciting opportunities for growth with expansion in China and Japan as well as our life cycle management program for PEF or preserved ejection fraction in post-AMI. If we move to the next slide, the AdComm discussion for PEF reinforced the unmet need as well as Entresto's value in the treatment of preserved ejection fraction. And specifically, in patients with ejection fraction below normal. Ultimately, the addressable patient pool will depend on the label.

What I can tell you is that the total PEF population is about 3 million in the U.S. and about 2 million of them have an ejection fraction below normal. We know from our deep experience in rEF that guidelines matter in this market. So, our update will be gradual as the guidelines evolve.

Overall, we're very comfortable with Entresto's peak consensus, and we're confident that Entresto is going to continue on its impressive growth trajectory. If we move to Slide 20 and on to Kesimpta, we've said we have high expectations for this product. Our team is executing very effectively on the launch. In fact, we have beat all of our plans on gaining access.

We're seeing broad adoption. We have leading share of attention, onboarding is fast, and initiation is simple. But we do feel that it is more challenging to launch during a pandemic. We cannot move as fast as we would like due to the limited face-to-face access to physicians.

And what we're also seeing is a hesitancy to switch as physicians and patients prefer to wait. But this does not change our ambition for this product. We think that B-cell therapies have the potential to account to up to 40% of market share in MS. And we're positioning Kesimpta as a first choice DMT, as we relentlessly track for the highest customer satisfaction.

We have the foundational elements in place. We're focusing on breadth. And with our free drug program, once we're out of this pandemic and we can pool our full promotional power behind Kesimpta, we will really see the potential of this product. If we move on to Slide 21, we're also enthusiastically preparing for the launch of Leqvio.

Leqvio received EU approval in December, and we expect a slow and steady start. We also plan to roll out our first population health agreement with the U.K. NHS in quarter three. In the U.

S., as you've heard, we have a manufacturing-related delay which we're working to resolve. But what is important to remember is that we're thinking about this launch very differently. Our aim is to partner with healthcare systems on ASCVD management to overcome the non-clinical barriers to tackling this disease at scale. We're now using this time to advance our engagement with healthcare systems and to set up the needed infrastructure so that we can be stronger out of the gate once we get the green light from FDA.

Slide 22, 2020 was definitely a year like no other, but the external environment did not stop us from doing what we're passionate about and that is bringing medicines to patients. Our teams have worked hard and demonstrated great agility and resilience, and I am very proud of this team. Our 2021 strategy builds on the good work done. Number one, we want to maintain the momentum on Cosentyx and Entresto, penetrating markets further and delivering on our life cycle management programs.

Two, executing our launches, ramping up Kesimpta, bringing Leqvio to market, and restoring confidence in Beovu. And three, getting ready for the next wave of launches. Geographically, we have a clear focus on the U.S. and China, and we're putting our customers at the core of our strategy.

You will see us working in a much more personalized fashion with physicians, leveraging the investments that we've made in data and digital, and with healthcare systems to deliver access to more patients faster. Over to Susanne.

Susanne Schaffert -- President, Novartis Oncology

Thank you, Marie-France. So, moving to Slide 24, the oncology business had solid performance despite significant generic erosion and COVID impact, delivering 3% growth and reaching $14.7 billion. In Q4, we have seen very good momentum across our portfolio, mainly driven by the strong uptake of our recent launches and continued strong performance of our growth drivers. And these brands could also more than compensate for the continued generic erosion of Afinitor and Exjade/Jadenu in the U.S.

and Sandostatin LAR in the EU. Due to the pandemic, some areas of our business, as mentioned by Vas, like the hospital-initiated therapies and specifically breast cancer therapies, continues to experience delays in new patient starts, as well as concerns about patient management during COVID. And -- but I have to say our team has really stepped out, and we leveraged our robust digital capabilities embarked on -- and embarked on omni-channel launches for Tabrecta in the U.S. and Piqray and Adakveo in Europe and are very pleased that this launch has continued gaining momentum despite limited face-to-face interactions with physicians.

Moving to Slide 25 and Kisqali. Kisqali delivered a very strong performance in 2020, with full-year sales up 45%, reaching $870 million. And this is driven by the unprecedented overall survival benefit from two pivotal Phase III clinical trials. We are also very pleased to see Kisqali continue growing and gaining market share despite the overall slowdown of the CDK4/6 market, driven by suppressed patient screening and overall decrease in new patient starts.

At a recent Congress in San Antonio, we were very proud to share that Kisqali demonstrated the longest median overall survival among all Phase III trials in advanced breast cancer, reaching nearly five years of survival in premenopausal patients. And additionally, we presented the pool data from MONALEESA studies that confirmed efficacy across luminal and estrogen therapy-resistant HER2-enriched patient subtypes. And these data confirm that Kisqali's ability to selectively inhibit CDK4 may store endocrine sensitivity in these very aggressive tumors. On the development side, the NATALEE adjuvant study in intermediate and high-risk population is enrolling incredibly well, and we are on track for final readout in 2022.

So overall, we are very pleased with the performance of Kisqali and remain very confident in this brand. Moving to Slide 26. Also, Kymriah had an excellent year with sales up 68%, driven by strong double-digit growth across all geographies despite pandemic conditions. We continue to expand our global presence with now over 290 centers qualified to administer Kymriah across 27 markets.

Commercial manufacturing for Kymriah has been expanded with the recent approval of FBRI in Japan, and this is building on previous approvals of Stein and Les Ulis earlier in the year. In 2020, we made also significant progress in expanding our global manufacturing capacity with a 70% increase compared to previous year. And we also continue to improve the robustness of our process, leading to an increased manufacturing success rates. On the development side, we were pleased to share the new data from the ELARA trial showing that Kymriah is effective in pretreated patients with relapsed or refractory follicular lymphoma.

Submission for this important indication is expected later this year. And we have also presented the JULIET updated efficacy results which showed continued durable responses for patients with relapsed or refractory DLBCL. We also continue to invest in our CAR-T cell therapies. There's already two new CAR-T assets in Phase I trials being manufactured on a completely novel CAR-T platform.

With this technology, we expect to increase manufacturing reliability, shorten the turnaround times, and the preservation of certain T cell subpopulation. Moving to next slide, we'd like to share with you the exciting data we have recently presented at ASH on asciminib, our first-in-class STAMP inhibitor that has the potential to transform CML treatment standards. In the Phase III ASCEMBL trial, asciminib nearly doubled the major molecular response rate at 24 weeks compared to bosutinib in patients resistant to or intolerant of at least two prior TKIs. Asciminib also demonstrated favorable safety profile, underscoring that STAMP inhibition reduces the off-target adverse events typical for TKIs.

The U.S. FDA has granted Fast Track Designation earlier in December and we are on track with the U.S. and EU submissions in the first half of '21. We also continue evaluating multiple development options for asciminib in early treatment lines in CML and looking forward to update you in the future.

Moving to Slide 28. I would like to give an outlook also on '21. We will continue to maximize our growth drivers and we expect continued growth from Kisqali. We are going to leverage the increased manufacturing capacity to drive further growth in Kymriah.

And for Lutathera, we plan to unlock the potential in the community setting in the U.S. and grow use in earlier lines. We expect also continued growth from our growth drivers, Revolade/Promacta, Jakavi, and Tafinlar/Mekinist. We are also committed to deliver on our launches.

We will further expand Piqray in the U.S. and gain momentum in Europe. And we hope to continue strong on Adakveo, expanding to larger accounts in the U.S. and continue global rollout.

We will further maximize the first-mover advantage with Tabrecta in the U.S., and we'll continue driving awareness of CML and the unmet need and the importance of STAMP inhibitors. Last but not least, we will prepare for our next big bet, lutetium-PSMA, by advancing our commercial organization for the readout of VISION trial later this year and also focus in medical education on canakinumab to establish the importance of pro-tumor inflammation. Another important focus for us is the medical education on sabatolimab to build awareness for the dual mechanism of action of TIM-3 in MDS and AML. And as Vas said, we are advancing our early assets, TNO155 and LXH254 in a broad range of combination studies.

Moving to Slide 29. Just to give you an update on the recently announced deal to in-license tislelizumab from BeiGene. This is a late-stage PD-1 inhibitor specifically engineered to minimize binding to the Fc gamma receptor on macrophages. Tislelizumab has 15 potentially registration enabling clinical trials are currently ongoing with first ex-China filing expected in 2021.

With this deal, Novartis obtains development and commercial rights on key markets, ex-China, including U.S., Europe, and Japan. It is a very attractive asset for us as we look to expand our presence in the checkpoint inhibitor space, and it provides us with an opportunity to launch a PD-1 sooner in broad and important indications such as lung cancer. We have identified also multiple potential combination opportunities with the Novartis portfolio across all of our four therapeutic platforms. So, we are very excited about collaborating with BeiGene to bring tislelizumab to patients around the world.

And we are looking forward to provide you with more updates after the transaction is closed later this year. And with that, I hand over to Harry.

Harry Kirsch -- Chief Financial Officer

Thank you, Susanne. Good morning, good afternoon, everyone. I'm now going to walk you through some of the financials for the fourth quarter and full year, as well as provide you with our 2021 guidance. As always, my comments refer to results of continuing operations and growth rates in constant currencies, unless otherwise noted.

So, turning to Slide 31. We compare our actual results here with our 2020 latest guidance. And as you know, we've revised our core operating income guidance upward in October. And I'm pleased to say that we met both core operating income and the sales guidance.

On sales, given the resurgence of COVID-19 in quarter four, we ended at a low end of the 3% to 4% range, as we mentioned during the quarter three investor call. Now, on Slide 32 showed a summary of the performance for quarter four and full year. I will focus on the full-year results on the right-hand side. Full-year performance was solid, with sales growing 3% and both core operating income and core EPS growing 13%.

Sales were, of course, mainly driven by Entresto, Zolgensma, and Cosentyx. Core operating income growth was driven by higher sales, some lower spend, and significant productivity programs. Operating income grew 19%, driving net income growth of 20%. We will come back to the free cash flow number, which was $11.7 billion, a little later.

Overall, clearly, a solid yearly performance, especially given the challenging business environment we are all in. Next, let's focus on the core margins, on Slide 33, again showing on the right-hand full year and left-hand quarter four. For the full year, continuing operations' core margin was 31.7%, growing 280 basis points in constant currencies, with strong improvements in both divisions. Innovative Medicines margin reached 35%, as outlooked, up 220 basis points, allowing us to achieve our previously announced mid-30s core margin target a couple of years earlier than planned and Sandoz margin grew by 330 basis points to 24.2%.

Clearly, our full-year margins show we are well on track to deliver on our Innovative Medicines margin targets of the high 30s in the mid-term as well as our Sandoz margin target of mid-to-high 20s in the mid-term. Let's go to the next slide. As mentioned earlier, our free cash flow for the full year was $11.7 billion, down 10% versus prior year. Obviously, this was because higher operating income was more than offset by the payments related to legal matters and higher divestment proceeds in the prior year.

Now, turning to our full-year 2021 guidance on Slide 35. We expect sales to grow low to mid-single-digit and core operating income to grow mid-single-digit, ahead of sales-driving core margin increase. Within the divisions, we expect Innovative Medicine sales to grow mid-single digit and Sandoz topline to be broadly in line with the prior year. The Sandoz guidance is due to the impact of COVID on our retail business and expected decline of U.S.

oral solid business. The key assumption for this guidance, importantly, is that we see a return to normal global healthcare systems and prescribing dynamics by the middle of 2021. And in addition, we assume that no Gilenya and no Sandostatin LAR Generics enter in 2021 in the U.S. Please also note that the overall generic impact is expected to be in the range of the negative minus 3% of sales, similar to what we saw in 2020.

We expect there to be continued generic erosion on brands, including Afinitor, Exjade, Gleevec, also with some mature ophtha brands and Diovan. On Slide 36, I would like to explain the dynamics that we expect to see in quarter one, given that we have quite a significant COVID impact last year quarter one, which, of course, would impact the growth rate. So, as you recall, there was a significant forward purchasing in quarter one of last year and we had approximately three points of growth that largely reversed in quarter two with no overall impact on the full year 2020. So as a result, in quarter one 2021, we anticipate sales to decline low to mid-single digits year on year.

The quarter one underlying performance, excluding the stocking effect, is expected to be broadly in line with prior year due to the continued COVID-19 impact on healthcare systems and patient visits. Turning to Slide 37. In 2021, we do expect further margin expansion, as mentioned earlier, with core operating income growth. And the magnitude, however, will be lower compared to 2020, where we increased core margins by 280 basis points.

Expected positive drivers of future core operating income growth include the continued performance of our growth drivers, the launch uptake of Kesimpta and other launches, as well as productivity programs and continuing adoption of our new ways of working. Growth will be partly offset by increased launch and pre-launch investments, mainly Kesimpta and Leqvio, as well as development costs for tislelizumab which we recently in-licensed from BeiGene, of course, only after the completion of the transaction. We will also likely see further investments into growth drivers as we expect physician access to normalize from the middle of the year. On Slide 38, I would like to add some perspective on other key financial elements of the expected quarter one performance.

As you can see, we expect core net financial expenses to be broadly in line with 2020 and also the 2021 core tax rate to be around 16%. Next slide, please. So, as you can see here on Slide 39, we are pleased to propose our 24th consecutive dividend increase to CHF 3 per share, with an increase of 2%, with our dividend yield remaining above 3% and fully in line with our dividend policy of increasing our dividend every year in Swiss francs. And finally, on Slide 40, as currency is consistently -- constantly changed, I want to bring your attention the estimated currency impact on our results using the current exchange rate.

So, if late January rates prevail for 2021, we would see a full-year impact of currencies on sales around 3% to 4% positive and on core operating income 3% positive. For quarter one, as you can see here, sales would be positive 4% and on core operating income of positive 2%. And as you know, we update these expected currency impacts every month on our website. With that, I hand back to Vas.

Vas Narasimhan -- Chief Executive Officer

Great. Thank you, Harry. Turning to Slide 42. Just a final word on our ESG progress as a company.

I think as many of you know, we've placed a high priority in being a leader in our sector on ESG across our four main areas of focus through our materiality assessment. Some of the highlights include the issuance of the first industry sustainability-linked bond for access to medicines. Our commitment for full carbon plastic and water neutrality by 2030. We were just ranked today number two in the Access to Medicines index that was just announced and continued to see strong progress in our D&I and other corporate citizenship efforts.

All of this has led to improvements in our ESG rankings, and we continue to work to being a leader in the ESG efforts across the sector in the years ahead. So, moving to Slide 43. As we noted in our Meet the Management meeting in November, we're confident we will grow top and bottom line every year to 2025 and meet external expectations of 4% growth, reaching $60 billion in sales in 2025 and reaching the consensus margin of 37.6% in 2025. And we look forward to continuing to demonstrate our progress on this front as we move through the quarters ahead.

So, closing on Slide 44, as you see, we delivered on our strategic and operational commitments and advanced our strategic priorities in 2020 despite the challenging business environment. Our third year of sales, core operating income, and margin improvement I think demonstrating the operational effectiveness of the organization. We're progressing our pipeline, deep, mid, and late-stage pipeline as well as important milestones in 2020. And as I noted, expect top and bottom-line growth every year through 2025.

So, with that, we can open the line for questions. [Operator instructions] Thank you. Operator?

Questions & Answers:

Operator

Thank you. Your first question today comes from the line of Mark Purcell from Morgan Stanley. Please go ahead. Your line is open.

Mark Purcell -- Morgan Stanley -- Analyst

Yeah. Thank you very much for taking my questions. It's Mark Purcell from Morgan Stanley. So, just firstly for Harry.

Harry, could you just help us further with the sort of phasing of growth through the course of the year? So, as you said for Q1, underlying growth roughly flat. Should we assume a similar thing for Q2 which sort of sets you out for 8% to 9% sales growth in the second half of the year to reach the guidance? And is there anything you see in terms of the phasing of Sandoz which we may not have as much visibility on which is different to that pattern? And then secondly, Vas, maybe one for you. With tislelizumab and the BeiGene deal, obviously, this is exporting innovation out of China, one of the first products to do so. So, is there a potential challenge here in terms of exporting the product at a lower price point when it comes to negotiating pricing agreements with the -- with governments globally? Or is the lower price points in China potentially something you could use to your advantage when it comes to transferring the value into potential combinations of your next-generation assets, so thinking of things such as TIM-3, SHP2, CD73, et cetera? So, it'll be useful to get some context there.

Vas Narasimhan -- Chief Executive Officer

Terrific. Thanks, Mark. Harry, on phasing of growth?

Harry Kirsch -- Chief Financial Officer

Yeah. Thank you, Mark. Yeah, the last year was quite interesting with the forward buy, if you will, as healthcare systems try to get some inventory, and also at the patient level longer scripts have been given. So, we have this $400 million roughly effect of forward buy or stocking in quarter one and then they destocked in quarter two.

That's roughly three points on our quarter. So, of course, then, quarter two would have the reversed positive effect. Another effect we had in quarter two is that Lucentis, tragically many patients skipped or doctors skipped one injection. That's now fully back.

So, quarter two, we should see some good growth. And so, the first half, I would say we do expect to be broadly in line with prior year, maybe low single-digit growth as totality, right? First, decline in quarter one and then some good growth in quarter two is the expectation. That is broadly in line with prior year, especially what we have seen the last two quarters. As you think about the second half of 2020, quarter three was zero, quarter four was plus one, and that was the environment that we expect the next couple of quarters to be in.

So, that's why we believe that is a reasonable scenario. Of course, there's unprecedented volatility and therefore, we have to plan in different scenarios. So, then as you say, you know, in the second half, we do expect some very good growth. But again, we talk ranges and have to see how quickly then the healthcare systems open up.

So, I think that phasing of half one, half two, and then if you have to do this quarter one stocking, quarter two destocking of last year should give good feeling for how to model the quarters. I don't want to get into Innovative Medicines or Sandoz; I think it will get too granular. But you have seen last year, the quarter one, quarter two of both divisions and I think that should be helpful.

Vas Narasimhan -- Chief Executive Officer

Thanks, Harry. On tislelizumab, you know, broadly speaking, our goal is to maximize the value of this asset. We have a -- asset that can participate in the $50 billion-plus PD-1 market around the world. We have the full commercial flexibility to maximize the value of the product.

And then our goal, of course, is to leverage the medicine across the full combination possible across Novartis' Oncology portfolio. So, we have a number of combination studies already planned, and we believe having a hopefully soon approved PD-1 in U.S. and then later also in Europe will enable us to accelerate our own combination programs across the full range of our portfolio. I can't comment and it's too soon I think and premature to comment on pricing, strategies, et cetera.

But I think once the deal closes and we're further along we can, of course, provide more granularity, and Susanne can provide more granularity on our commercial strategies.

Mark Purcell -- Morgan Stanley -- Analyst

Thank you.

Vas Narasimhan -- Chief Executive Officer

Next question, operator?

Operator

Thank you. Your next question comes from the line of Laura Sutcliffe from UBS. Please go ahead. Your line is open.

Laura Sutcliffe -- UBS -- Analyst

Hello. Thank you. Two product-specific questions, please. Firstly, for Zolgensma in the U.S., I think you said at your last set of results that you had 74% newborn coverage and your goal now is, I think, 80% by the end of the year if I heard it right.

Does that mean that you think that access is only really going to expand sort of incrementally in the U.S. this year and sort of in practical terms there won't be very much extra? Or is there a more optimistic scenario in there? And then secondly on Kesimpta, do you have a rough idea of when you expect that you'll start to see the majority of sales come from paid-for products rather than free products? Thank you.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Laura. So, on Zolgensma, what we ended up seeing in 2020 was newborn screening coverage in the U.S. in the high-60s, and our goal is to get that into the high-80s in the -- over the course of 2021.

And in that setting, we would expect, again, Zolgensma to have a very high -- a very high market share in states that have newborn screening. Alongside that, we also are working hard to get better, even further Medicaid coverage with hopefully getting a significant number of additional states fully putting in place Medicaid programs. So, we haven't seen this as a significant barrier. We do think that will ease the ability to get patients started.

I would still say in general, I mean, the biggest constraint right now on Zolgensma growth is more the pandemic than the underlying demand. We see very good dynamics, very solid AAV testing rates around the world. We see a strong interest for governments to put in place reimbursement programs. But it does take more time in the pandemic and we do see physicians delaying starts with Zolgensma simply because of the initiation procedures involved with such a therapy.

So, we're hopeful that as the pandemic recedes or healthcare systems stabilize, we'll see an acceleration over the course of the year. Now, turning to Kesimpta, Marie-France?

Marie-France Tschudin -- President, Novartis Pharmaceuticals

So, thank you, Laura. Our bridging program is available for commercial patients for up to 12 months. So, we've had a generous program, and I can tell you that the majority of Kesimpta patients are currently on this bridging program. We expect the conversion to paid products with share of free goods to decline from 70% to 30% over the course of the year, and that will obviously drive up the sales ramp-up.

What's important here is that we expect three-quarters of 2021 sales to be realized in the second half of the year, and this of course assumes the pandemic recovery in line with group guidance. What I can say in the meantime is that the team is doing an incredible job with the launch. We've seen access and we've beat our own internal benchmarks on access. We're seeing naive patients at 17%.

We have leading share of attention. We've made sure that we focus on making fast initiations and making it easy, so we're in good shape. We're building the foundation. We have a good free goods program and we're hoping to accelerate the sales in the second half of the year.

Vas Narasimhan -- Chief Executive Officer

Great. Thanks, Marie-France. Thanks, Laura. Next question, operator?

Operator

Thank you. Your next question comes from the line of Matthew Weston from Credit Suisse. Please go ahead. Your line is open.

Matthew Weston -- Credit Suisse -- Analyst

Thank you very much. Two questions, please. One, Vas, at the CMD in late November you expressed confidence in consensus, and I think a lot of investors took that to mean each year rather than just 2025; now the 2021 guide seems to be somewhat below consensus. So, you obviously had good visibility on the challenges of COVID in late November, so can you just tell people if there is anything that's fundamentally changed since late November, or really, it's just the pattern of growth out to 2025 that potentially was misinterpreted? And then secondly on Entresto in pEF, again, just referencing that Meet Management, you put it in the $500 million to $1 billion peak sales bucket.

Now, that you've heard the AdComm commentary and you've obviously had further interaction with FDA, do you think that peak sales potential is conservative given the number of patients that you've just laid out in the presentation today?

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Matthew. On the first point, you know, our intention in Meet the Management was to provide confidence over the five-year period and not to provide any sort of annual milestones with respect to consensus. So, certainly, if that was misinterpreted, I apologize that we were not clear enough.

I think what we did say is we plan to consistently grow sales and core operating income. We do that this year; we grow core operating income ahead of sales. We also have tried to be consistent that the margin progression will not be at a steady pace, but we will get to the high-30s as we outlined as well. So, I think we're on track.

Nothing fundamentally has changed. And when we look at that 4% growth out to 2025 and the margin out to a rounded 38%, we feel very good with our ability to achieve that with the portfolio that we have in hand. Now, with respect to HFpEF, maybe I'll turn it over to Marie-France to give a little bit of the range of patient numbers and potential.

Marie-France Tschudin -- President, Novartis Pharmaceuticals

Thank you, Vas. So, the AdComm discussion really reinforced the unmet need for Entresto's value in the treatment of pEF, and we see this specifically in this group of patients with ejection fraction before normal. But it's difficult at this point to give you a specific range because that's going to depend on the addressable patient pool which will obviously depend on the label. What I can say is that the total pEF population is about 3 million patients in the U.S., and about 2 million of them have an ejection fraction below normal.

We also know in this market, and this is critical, I referenced it before, that it's important to have guidelines. So, our uptake is going to be gradual as those guidelines are updated, and we're going to continue to keep our consensus around $4 billion to $5 billion for total Entresto sales. So, we previously guided $3 billion to $4 billion on rEFs and we are guiding $4 billion to $5 billion on rEFs and pEFs together.

Vas Narasimhan -- Chief Executive Officer

Great. Thanks, Marie-France. Thanks, Matthew. Next question, operator?

Operator

Thank you. Your next question comes from the line of Steve Scala from Cowen. Please go ahead. Your line is open.

Steve Scala -- Cowen and Company -- Analyst

Thank you. The inclisiran situation in the U.S. is perplexing. Two months ago, Novartis had been anticipating a year-end 2020 approval, then said the facility review only related to paperwork and might not be needed, and now the product appears delayed a year in the U.S.

So, something seems not right and I'm wondering what perspective you can add. The second question, Vas, you said Zolgensma potential was $2 billion. Is that the first time Novartis has provided that number? And what does that include for addressable SMA patient groups as well as other indications? Thank you.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Steve. On the inclisiran topic, it's been certainly a interesting journey for us as well. I mean, this is a situation where we had a facility, routine inspection would've happened in May.

Due to the pandemic, the FDA converted this to a paper-based inspection. The third party provided the documentation and the entire interaction has been purely based in writing. There have been no verbal conversations and these of course have happened in writing with -- with the third-party facility. Our best estimates over the course of last year were based on our discussions with the review team and our understanding that there were no safety efficacy or CMC-related concerns that were product-specific.

We ultimately all learned and we did it as well with the CRL that FDA wanted additional documentation and some additional control changes within this facility. It's notable this facility is approved in our European Medicines file, fully approved, and is part of the launch -- launch network for the launch of Leqvio in -- in Europe. We're working as fast as we can with the third party. Ultimately, it's the third party's responsibility to provide answers to those questions to the FDA.

I think we're trying to provide realistic guidance given that we're in a pandemic of Q2 to Q3 and then it will be up to the FDA, ultimately, to determine if they still want an in-person inspection, when they want to conduct that inspection, and how long they take to complete that process and -- and review. I mean that's -- those are the facts as we know them and we'll continue to work as fast as we can to get the -- this medicine approved in the U.S. and launch. I think what's important is what Marie-France and the team mentioned -- which she mentioned if anything this is an opportunity for us to prepare even better for the launch.

We don't have to launch this medicine in the midst of a -- of a pandemic. We have the opportunity now to build an even-stronger launch-preparedness effort and then hopefully get off to a strong start as soon as the product is -- is approved. With respect to Zolgensma, I think historically we've said that we're comfortable with the 2025 consensus which I believe is in that range of $1.9 billion to $2 billion. And so, that's the basis of -- of this -- of the comment that I made.

It's based on Zolgensma IV and based on Zolgensma IV in the current indications of under two years old in the U.S. and up to 22 kgs outside of the U.S. As I mentioned, we continue to work for -- to -- to get AVXS-101 IT fully licensed and we'll keep -- we'll give you an update once we clear the pre-clinical topic and we finalize the Phase III development program.

Steve Scala -- Cowen and Company -- Analyst

Thank you.

Vas Narasimhan -- Chief Executive Officer

Thanks, Steve. Next question, operator?

Operator

Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead.

Graham Parry -- Bank of America Merrill Lynch -- Analyst

All right. Thanks for taking my question. So, firstly a question on COVID impacts on your '21 guide. So, roughly, how many percentage points do you think COVID is negatively impacting revenue growth in 2021.

And on margins, how much wiggle room are you giving ourself there given the likelihood that you are going to get more COVID savings. So, as we look into '22, you're really setting yourself up here for quite an easy base for '22 growth. And then secondly, question on CANOPY-1. It's been quite a lot of investor discussion around timing of interims.

I think some investors interpreted management comments made recently that there's definitely no interims in first half of '21. So, can you clarify if that's correct, or if you're just saying you're just not disclosing timing and just leave us guessing if it could happen any point between now and the final analysis in Q4? Thank you.

Vas Narasimhan -- Chief Executive Officer

Thanks, Graham. On COVID-19 impact, I'll give it to Harry. Harry?

Harry Kirsch -- Chief Financial Officer

Thank you very much, Graham. So, very exact numbers are hard to grab, right, on what is purely COVID. But as we compared to our forecast and of course then analytics around it which we're doing constantly, I would say starting with the -- the impact we ex -- we experienced in 2020 between 2% and 3% points of sales growth that we would attribute as a negative. On the bottom line, given the cost discipline as well as some of the natural underspend as we have -- as you have seen, we have made up more than that, you know, and it could even increase our core operating income guidance.

Now, for 2021, a half-year effect. We have some little under 2% on the top line, what we expect. So, again, it depends very much on quarter two, quarter three goal. We have several scenarios which we tried to put here.

One, the guidance is never easy but I think we have to be a bit careful around when our patient visits and initiations back to pre-COVID model which we do expect as of the summer as of Q3. And then on the bottom line, I just want to mention one thing. As you know, and we had significant savings and underspend. Of course, we keep our ways of working -- well, saving on travel and internal meetings and -- and so on, leveraging digital.

But we have -- we have basically put that into the base for '21 on the cost side. And now to assume we can do a significant effort like this again on top of already quite a lot of savings in -- in 2020, one has to be careful that we would not under-invest into the launches and pre-launches. So, we clearly see margin improvement but after 280-basis-points year in constant currencies, you know, to -- we have to also ensure the right level of investments as we expect the markets will open up for more face-to-face promotion also as of the summer.

Vas Narasimhan -- Chief Executive Officer

Thanks, Harry. And then on -- on interim guidance, maybe rather than giving specific on CANOPY-1, in general, we have interim data readouts across our programs. We were no longer disclosing the timing of those interim readouts. We'd rather have investors focus on the full-data readout -- full timing of data readouts based on the -- the powering of -- of these studies -- the power, of course, to read out, you know, at -- at the close of the study.

And so, we continue to guide to CANOPY-2 in the first half, CANOPY-1 in the second half, CANOPY adjuvant in -- in '22. Thanks, Graham. Next question, operator?

Operator

Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead. Your line is open.

Emmanuel Papadakis -- Deutsche Bank -- Analyst

Thank you very much. Emmanuel Papadakis from Deutsche Bank. A couple of questions, please. Perhaps the first one if you take us on the SHP2 just -- if you can give us a bit of clarity in terms of timing.

What we might see that first c-RAF combination data on OD and the clinics since Q2 last year was, you know, partner in the U.S. MonarchE. So, just comment on timing and the degree of confidence you have based on the data you've presumably seen in-house that will have a major role to play in the future-targeted lung-therapy space. And then perhaps a second on the iptacopan -- iptacopan breakthrough designation and PNH, and C3G.

Alexion has been historically quite clear they don't expect the oral complement assets to challenge C5 agents as the main stem of therapy rather -- or in, you know, refractory patients or those with breakthrough hemolysis. So, would you disagree with that view? Was the breakthrough designation also covering naive patients or just the refractory subgroups, for example. And just a bit of thoughts in terms of the mid-term outlook in that space. And then maybe if I could just tack on in C3G.

We've had reasonably promising phase due to date from avacopan in the ACCOLADE early in December. Company there is talking about potential for filing that would put you very significantly behind. So, just timings and indeed differentiation on that side of things as well would be helpful. Thank you.

Vas Narasimhan -- Chief Executive Officer

Thanks, Emmanuel. So, on the SHP2, John?

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Yeah, sure. Thanks for the question, Emmanuel. On the SHP2 inhibitor, you know, we've been working with Mirati and we have a clinical collaboration in terms of moving forward. There are couple of patients in combination with their c-RAF G12C adagrasib.

We're beginning to see the initial results. I think there was one case study that was presented at an ontology conference at the end of the year last year. We hope that it reach proof of concept later this year and move forward based on those results. So, the exact timing in terms of the Phase II/Phase IIIs will be forthcoming and probably the mid -- this -- this time mid -- middle of this year is how we would move forward.

So, also, I think you had a number of questions regarding avacopan and I believe specifically you're asking about our approach with avacopan and PNH and combinations. As, you know, and just for the folks online here avacopans are first-in-class complement B -- factor B inhibitor that acts upstream of C3 and C5. And as Alexion has their anti-C5, what we note is that we're targeting both intravascular hemolysis which is the C5 inhibitors which target the intravascular but we also target the C3. So, we know that about 70% of the patients currently who have PNH are inadequately controlled with C5 inhibitors.

So, we have designed a superiority trial in terms of moving forward in. So, we do feel like that would be a superiority trial that would give us the indication to move forward and send wage at.

Vas Narasimhan -- Chief Executive Officer

And then John, avacopan, and C3 -- C3 -- yeah, I think that's a C5 inhibitor. So, I think they're acting downstream the moment they can.

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Exactly that is downstream. And Emmanuel, I think a third question on IgA. If you could just ask that question because I didn't write down that specific third question.

Vas Narasimhan -- Chief Executive Officer

No, John. It was the -- that was a question on -- on timing of C3G and when we would plan to -- to get to a filing in C3G for avacopan.

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Yeah. So, for -- for avacopan and C3G, what we've noted is that we have a Phase II data readout in the first half of this year. And based on that, we're looking to move forward in potential Phase III program and potential filing next year -- or 2023.

Vas Narasimhan -- Chief Executive Officer

And I -- I just want to highlight again for avacopan, our -- our goal is a first-line -- a first-line indication. I think Susanne and her team have a strong hematology presence in the U.S. So -- so, we believe we can launch this product successfully in first-line with respect to PNH. And then, of course, in the full range of indications and the -- in the coming year.

Thank you for the -- the question. And next question, operator?

Operator

Thank you. Your next question comes from the line of Richard Parkes from Exane BNP. Please go ahead. Your line is open.

Richard Parkes -- Exane BNP Paribas -- Analyst

Hi. Thanks for taking my questions. Two questions. Firstly, on Kesimpta.

I just wondered to what degree the launch and the cost overall is being impacted by patients delaying treatment initiation due to either worries over immunosuppression or lack of -- potential lack of response to COVID vaccination. I -- I've noticed a couple of recent complications underlying it. Two times increased risk of severe COVID would be so depleted. So, just wondered if you could comment on that and what degree that impacts on the c-RAF might linger longer term as we come out of the pandemic.

And then secondly on Entresto. Just a clarification based on the patient populations that you're pointing to for the -- the present ejection fraction indication. It sounds like you -- you think the labeling discussions will be around kind of ejection fraction cutoffs rather than necessarily restricting by sex. So, just wondered if you can confirm that and if you are able to quantify what you think the opportunity for Entresto is in the PARADISE-MI setting that would be really helpful.

Thank you.

Vas Narasimhan -- Chief Executive Officer

So, Marie-France, both on Kesimpta and Entresto.

Marie-France Tschudin -- President, Novartis Pharmaceuticals

Yeah. So, on Kesimpta, I think the important thing is that we're -- we're really leaving no stone unturned in this launch. And as I mentioned before, I think we're in pretty good shape on all our metrics to really bring this product as a first-line BMT to market. We are, however, feeling the effects of the pandemic and -- and you can see that mostly in the overall ability of our teams to perform their patient visits.

Now, there is some noise in the market around vaccination or delaying hesitations by HCPs on switching therapies. And -- and that's -- that is a -- -a reality that we're seeing right now. However, what I can say is that we are currently running some clinical trials in vaccinations. We also have data in this -- in this regard looking at other vaccinations and -- and B cell therapies and in other biologics that give us confidence that we'll be able to make sure that patients and physicians feel comfortable with using Kesimpta in -- regardless of -- of COVID and regardless of -- of vaccination.

So, there are currently a lot of real-world evidence, databases that are quite encouraging. We're looking at this not only for Kesimpta but across a broad range of -- -of products including Cosentyx as well. The important thing is that patients get treated. And despite the fact that our -- our selling cycle is a little longer, we're not slowing down.

We're continuing to build the foundation for this product. And I do believe that -- that you can expect to see the B cell market grow significantly not only because of the work that we're doing but because this is really bringing a high-efficacy therapy to patients upfront and that could radically change the way that physicians think about and -- and treat multiple sclerosis patients. So, we've said that we are ready, we just need this market to bounce back.

Vas Narasimhan -- Chief Executive Officer

And then, Marie-France on the Entresto HFpEF ejection fraction versus male-female. And then also PARADISE-MI potential.

Marie-France Tschudin -- President, Novartis Pharmaceuticals

So, when -- when we go back to -- to what I said before, it really depends on the addressable pool of patients. We're very encouraged by the conversations that -- that we've heard coming out of the outcome. And now we're in discussions with FDA around the exact wording of -- of the label. And it'll depend on the patient pool.

As I said before, this is a significant population but it's also an under-diagnosed population. So, we'll have to take things as it comes. It's very encouraging as we -- we have seen from -- from the -- the PARAGON data that there are groups of patients that do benefit. And there's a general consensus with physicians that -- that this is not an exact science.

So, having an ejection fraction below normal and looking at precise rates is not something that -- that -- that is an exact science. So, we're working to make sure that we can bring this product to the largest population possible and where it makes sense. And on AMI, so we'll obviously have to wait for the side for -- for the -- for the results of the -- of the trials. But our data tells us there are -- there are about 7 million AMI events every year across the globe and one in four will -- will develop heart failure.

So, in the U.S. alone, we're talking about 800,000 patients suffering from AMI every year. And -- and these might benefit from Entresto. So, we've got strong access for this product that we've built over the years.

We've got a great team and we, you know, we hope to bring Entresto to -- to a -- a large incremental population if the results of the trial are positive.

Vas Narasimhan -- Chief Executive Officer

Thank you, Marie-France. Thanks, Richard. Next question, operator?

Operator

Thank you. Your next question comes the line of Simon Baker, Redburn. Please go ahead. Your line is open.

Simon Baker -- Redburn Partners -- Analyst

Thanks for taking my questions. Just two if I may, please. Firstly, on the newer modalities. On Zolgensma, Vas, you gave us some details at the beginning on the countries you expect to add to reimbursement.

Could you tell us the current number of countries where Zolgensma is reimbursed.? And on Kymriah, it was a particularly good performance in the fourth quarter against expectations. Could you just give us some color on any pandemic disruption you've seen there and the extent to which that's been offset by the expanding footprint for Kymriah that you discussed? And then finally a quick question on just eculizumab. Could you give us the location of the manufacturer for the trial and commercial material that you will be using? Thanks so much.

Vas Narasimhan -- Chief Executive Officer

Yes. So, on -- thanks, Simon. On -- on Zolgensma, outside of the U.S., the -- of course, we have access in Germany through the standard access pass there. We have reimbursement in Japan and we're working very -- and we have a limited reimbursement program right now in a few other European countries particularly Italy -- notably Italy.

What we hope to be able to accomplish in the first half of this year is to establish reimbursement pathways in the U.K., Italy, Spain, Canada, and a number of other markets. We'll see those -- those discussions as I mentioned have been a little delayed due to the pandemic. But we're hopeful we can accelerate them. And then on top of that, a key priority for us is to enable access in emerging markets, particularly Turkey, Brazil, but among other emerging markets as well where there are significant SMA populations that could -- children who could benefit from Zolgensma.

So, we hope to see a steady pace of getting reimbursement decision over the coming year. Kymriah, Susanne?

Susanne Schaffert -- President, Novartis Oncology

Yeah. Thank you, Simon. So, I am -- we were really pleased with the performance of Kymriah. It is also in Q4, very strong growth, and this was really driven by double-digit growth across the geographies in the U.S., in Europe, and Japan and this despite COVID.

I would say that that growth is partly driven by the expanding in new markets. As I said, there is now 27 markets that have reimbursements for at least one of the Kymriah indications. The increased manufacturing capacity which means that we could serve all of the demand. And I have to say you were asking if there is impact from COVID and yes there is because some treatment are delayed.

But on the other side, I think within the market, Kymriah has performed exceptionally well. We have gained market share, and I think this is probably driven by the strong data that we, also in real-world evidence, could demonstrate that efficacy and also safety is even better than in the JULIET trial. So, I think very, very strong and I think very safe product that would not require ICU space, and I think this led probably to the decision by many centers to go for Kymriah.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thank you, Susanne. And then on tislelizumab manufacturing, the product is produced by an established third party, European established third party. I'm not sure under our agreements what -- and given the ongoing review what I can and can't disclose.

I propose our IR team simply gets back to you once we do the appropriate checks, but a very reputable, top-class third-party manufacturer based out of Europe.

Simon Baker -- Redburn Partners -- Analyst

Thank you.

Vas Narasimhan -- Chief Executive Officer

So next question, operator?

Operator

Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead. Your line is open.

Kerry Holford -- Head of Global Pharmaceutical Equity Research

Thank you. Yes, Kerry Holford from Berenberg. A couple of questions left for me, please. Firstly, on the BeiGene PD-1, I wonder if you can just talk through why you took the decision to bring that on board given you have spartalizumab, and what did that asset really offer that yours did not? Was it just timing or is there something else here the world should be aware of? Should we assume spartalizumab could now -- continue those ongoing combinations going to that asset as well? And then secondly on branaplam.

You highlighted in the slide Phase IIb is due to start in Huntington's in the second half of the year. I wonder why not any earlier. Is there COVID-related delays, is there additional data preparation you need to do in the first half? And could that Phase IIb study be seen as a pivotal trial? Thank you.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Kerry. On BeiGene, it does not change the status of our own PD-1. We view them as complementary.

Our own PD-1 was primarily focused -- spartalizumab was focused on a few select indications. That was the strategy we took with that medicine. We'll continue on those indications. BeiGene has taken a very broad development program across the main PD-1 indications without overlap on spartalizumab, and so we're excited to bring that medicine to market across the full range of indications.

Susanne, anything you'd want to add on this point?

Susanne Schaffert -- President, Novartis Oncology

Yeah, Vas. Just to add, I think that really, we were impressed by the very broad development program that BeiGene is running in global programs, having really 15 potentially registration-enabling trials ongoing. And I believe for us also, advantage is that BeiGene has tested tislelizumab in very important indications in monotherapy that's different from spartalizumab like non-small cell lung cancer, gastric cancer, and so on. And therefore, we're excited to bring this product to market ex-China.

Vas Narasimhan -- Chief Executive Officer

And then, John, on branaplam timelines for Huntington's.

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Yeah, branaplam timelines. Maybe, Kerry, just one last item on the last question there is we also have a number of targeted therapies that we could use in combination. And if we have an approved PD-1, it actually fits very well in terms of a complementary portfolio. So, I think that's something that we thought about given timelines as you noted in the question.

Specifically, on branaplam, as you highlighted, we will get the Phase I results in the first half of this year. With those results, what we intend to do is take it to the health authorities and have discussions. And if timelines allow, we certainly will move as quickly as possible. If it's realistic, we will absolutely have a Phase IIb in the first half of this year.

But it really depends on the feedback from the health authorities because we will have to have discussions both with the FDA as well as European agencies. So, your last question or the last part of that question was will this allow for a registrational study in Phase IIb. That really will also depend on the discussions that we have and as well as the data that we'll see in the Phase I program. So, I think we'll be able to share more with you as we have these discussions and when we see the data.

Vas Narasimhan -- Chief Executive Officer

Thanks, John. Thanks, Kerry. Next question, operator?

Operator

Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is open.

Peter Welford -- Jefferies -- Analyst

Hi. Yes, thanks for taking my questions. Firstly, just going to another pipeline asset, iscalimab. Wondering if you could just give us a bit of clarity on the path forward for filing of that now? I see a commentary that the regulatory interactions suggest that you can't file, based on kidney transplant -- sorry based on the ongoing study.

So, what is the planned timeline there? Can you use liver and kidney together or is another trial started or planned to be started? And how do you think about that and what sort of endpoints the regulators are requiring? And then secondly, just on the generics. Obviously, you're guiding toward no Sandostatin Gilenya generics during the course of this year, from Harry, I guess makes sense on Gilenya. I presume we're still going to wait for clarity from the court before you give us timing on that one. But Sandostatin in the U.S., can you just give us some clarity on, I guess, what sort of research or visibility you have on that and sort of your confidence that we won't see a U.S.

Sandostatin LAR generic this year? Thank you.

Vas Narasimhan -- Chief Executive Officer

So, great. John, on iscalimab.

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Yeah. Thanks, Peter. On iscalimab, this is our anti-CD40. As you know, we had intentions of moving forward, and we still have intentions of moving forward with two or three indications, renal transplant, liver transplant as well as Sjogren's.

We took an aggressive clinical strategy given that there's really been no improvement or change of standard of care for renal transplant in 35 years other than calcineurin inhibitors. I think we noted previously in discussions, whether that was Meet Novartis Management or other calls where we were using a digital endpoint, and we were having really good discussions with the agency on using this aggressive approach, using this digital endpoint. At the end of the year last year, they came back and they noted that they wanted to still use the same endpoint as previously which is BPAR, biopsy-proven acute rejection. Having that as feedback, we felt like we wanted to ensure that we have a path forward which would be a full Phase III, so -- which would be the same timelines as developing your traditional transplant drugs.

Noting that, we do feel like there's also a potentially faster path through Sjogren's, and we're awaiting the Sjogren's Phase IIb result. And once we have those results, we'll be able to disclose the overall timelines on the Sjogren's program which may be faster than the transplant program.

Vas Narasimhan -- Chief Executive Officer

Thanks, John. On Sandostatin LAR generics in the U.S., Susanne?

Susanne Schaffert -- President, Novartis Oncology

Yeah, Peter. I mean, as you know, there is one generic company that has achieved marketing authorization in Europe and is doing a very targeted commercialization, currently being really commercialized only in eight markets, including Germany, France, and U.K. Our guidance for the U.S. is based on the fact that this same company has application running in the U.S.

since a while. We have no update at this point. But given also the situation, this COVID, we expect that this process could take longer. But there is no concrete update and there is no new information.

Vas Narasimhan -- Chief Executive Officer

Thanks, Susanne. Just a quick note for Simon from Redburn. We did a quick check and I can confirm that the tislelizumab is produced at the Boehringer-Ingelheim production site in Shanghai. So, next question, operator?

Operator

Thank you. Your next question comes from the line of Keyur Parekh from Goldman Sachs. Please go ahead. Your line is open.

Keyur Parekh -- Goldman Sachs -- Analyst

Good afternoon. Thank you. And first of all, Vas, congratulations on the progress you've made on the ESG front, especially with the access of medicine going up number two. Now, kind of two questions for me, broad picture, please.

First, kind of your slide on the BeiGene collaboration suggests that you're open to a broader strategic collaboration with BeiGene. Maybe I'm overinterpreting that sentence but would love to hear kind of what you are envisaging there. Is this kind of a corporate collaboration? Is it a collaboration from an oncology perspective? Is this for Novartis to sell stuff into China? Why them for you to import innovation? Just anything you can add to that would be great. And then secondly, as you look at kind of the bigger picture growth that you are suggesting, you are comfortable with consensus through to 2025 which is a 4% top-line growth.

To my mathematics, consensus has a 7%, 8% EPS growth. If you aren't successful at delivering that, that would put you in the middle of or in line with your peer group. Surely, your ambitions are bigger and higher than that. So, I was wondering if you might tell us what your kind of ambitions are and where you think you might actually get to.

Thank you.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Keyur, and thanks for the comments as well on ESG. We're very pleased with the collaboration with BeiGene in China and I think it fits with our broader goal to double the size of our Chinese business. As I noted, we were one of the fastest-growing multinationals.

I noted all the NRDL listings and the upcoming approvals. We're continuing to explore partnership discussions with a number of local Chinese players. I think specifically, BeiGene, of course, has a broader portfolio, has a strong oncology presence in China. And of course, we're looking forward to continuing a strong collaboration with them but also with other strong local Chinese players as makes sense for our portfolio.

So, no specific plans or decisions, but I think more just to highlight that our ambitions in China are significant and we think we're on the right track with very strong teams across GDD and John's organization as well as Marie-France and Susanne's commercial teams. In terms of the mid to long-term ambitions, I think nothing more to add. Of course, as a CEO who wants our company to lead and be the leading medicines company in the industry, I have very high ambitions. But I think more appropriate for me to keep those ambitions to myself and continue to simply say we're comfortable as we've stated with our sales and margin outlook from the consensus out to 2025.

And we'll do our best to deliver a world-class pipeline portfolio and execution across all five of our strategic priorities to get that. And then most important in my mind is to continue a strong growth trajectory beyond 2025 as well because we, of course, play this for the very long game. Thanks, Keyur. Next question, operator?

Operator

Thank you. Your next question comes from the line of Andrew Baum from Citi. Please go ahead. Your line is open.

Emily Hutchinson -- Citi -- Analyst

Hi, there. Emily Hutchinson from Citi on behalf of Andrew Baum. Just one question, please. On Cosentyx, can you talk to the anticipated performance in the U.S.

in 2021 given I note exclusion from a couple of national formularies? Thank you.

Vas Narasimhan -- Chief Executive Officer

Thank you, Emily. And this is the longest I've ever gone in an IR call in this role without a Cosentyx question. So, Marie-France, on Cosentyx.

Marie-France Tschudin -- President, Novartis Pharmaceuticals

Yeah, I'm very happy to get at least one question on Cosentyx. So, the first thing I'd say is I really need to put this in perspective because our overall access position in the U.S. remains incredibly strong. In fact, you heard me say that before; early line access is a key pillar to our strategy.

However, we're always going to balance access with long-term sustainability for Cosentyx, and you can expect us to continue to do that. Now, specifically on the ESI decision which is what you're referring to, you can obviously expect to see some impact on volume from this account, and that will also be reflected in our NBRx share. But know that we're confident in our ability to grow Cosentyx based on our three strategic pillars. We talked about access, we talked about the competitive product profile across four indications.

And then very importantly, our lifecycle management opportunities that could bring us to six indications in the future. So, we've consistently delivered double-digit growth despite the competition and despite the fact that there is a lot going on in this market, and you'll see us do that again in 2021. These access decisions are short-term decisions. It's not going to change the long-term trajectory for Cosentyx or our ability to reach $5 billion and beyond.

Vas Narasimhan -- Chief Executive Officer

Thanks, Marie-France. I'd ask the next set of analysts to please limit themselves to one question just in the interest of time. Next question, operator?

Operator

Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim. Please go ahead. Your line is open.

Seamus Fernandez -- Guggenheim Securities -- Analyst

Thanks very much. So, really just wanted to get an update on iscalimab in Sjogren's disease. I think previously, you had stated that you were planning for either an interim toward the end of this year or perhaps even a final look at those data. So, just wanted to get an update on iscalimab in Sjogren's disease.

And maybe if you could just give us a little color on the ability to recruit patients or continue recruiting patients into that study. If recruitment is completed, then obviously that question is irrelevant. Thanks.

Vas Narasimhan -- Chief Executive Officer

John, on iscalimab?

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Yeah. On iscalimab, thanks for the question, Seamus. As Vas disclosed earlier, we're really not disclosing the interims moving forward. So, as we're moving forward, the recruitment has been a little bit slower than we anticipated.

We're not fully recruited in the Phase IIb for iscalimab yet. So, the recruitment continues and those timelines really will depend on when we finish recruitment. So, we'll provide further updates in terms of the exact timing of completion of that trial.

Vas Narasimhan -- Chief Executive Officer

Thanks, John. Next question, operator?

Operator

Thank you. Your next question comes from the line of Richard Vosser from J.P. Morgan. Please go ahead.

Your line is open.

Richard Vosser -- J.P, Morgan -- Analyst

Hi. Thanks for taking my question. A question on Zolgensma and the intrathecal form. Just could you give us some help on the design of the pivotal trial? Would you look to broaden the age range beyond the two to five years which was the original, I suppose, strong trial design? And given the thoughts on what's happened to other gene therapies, what do you think the regulators would need in terms of duration, durability to see particularly in, I suppose, Type-2 SMA patients? Thanks very much.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Richard. So, we're in discussions now with FDA on finalizing that clinical trial design. I think the discussions are very positive both on dose and duration, but we haven't finalized the design.

Hopefully, by Q1, we'll be able to give you at least a perspective on what the agreed design of the study is, assuming we get off clinical hold later on in the year. So, still more to come and we'll keep you posted. Next question, operator?

Operator

Thank you. Your next question comes from the line of Florent Cespedes from Societe Generale. Please go ahead. Your line is open.

Florent Cespedes -- Societe Generale -- Analyst

Good afternoon. Thank you very much for taking my question. A quick one for Richard on Sandoz. Could you please share with us how do you see the dynamic of the non-biosimilar business because we understand what is driving this business, but for the rest of the portfolio it's a bit more difficult to understand? Could you maybe elaborate on this on mid-term dynamic of the non-biosimilar business? Thank you.

Vas Narasimhan -- Chief Executive Officer

Richard? See if we saw Richard? Richard, are you on the line?

Operator

Richard's line is still connected.

Vas Narasimhan -- Chief Executive Officer

No, I think --

Operator

Sorry, sir.

Vas Narasimhan -- Chief Executive Officer

Yeah.

Operator

Richard's line is still connected.

Vas Narasimhan -- Chief Executive Officer

OK. Well, I'll just quickly answer the question. I think the dynamics we see right now in biosimilars, primarily growth in Europe and Japan. In the U.S., it continues to be a mixed picture.

Of course, hopeful that with our next wave of assets we can get a much broader set of assets launched in the U.S. with 15 projects now progressing through our biosimilars portfolio. In terms of small molecules, the softness we saw was primarily in anti-infectives in Europe as well as the legacy -- the oral solids business we brought back from Aurobindo. What we're hopeful now is that hopefully, we see demand start to pick up again over the course of this year.

But much more important is revitalizing our pipeline and revitalizing our first-to-file engine in the U.S. and being at market formation in Europe. We think the combination of those two pillars, the biosimilars pipeline, and the first-to-file pipeline should get us to that mid-single-digit growth rate over time.

Richard Saynor -- Chief Executive Officer, Sandoz

Thanks, Vas. I shouldn't press my mute button.

Vas Narasimhan -- Chief Executive Officer

All right. Next question, operator? I think we have just a few more left.

Operator

Thank you. Your next question comes from the line of Naresh Chouhan from Intron. Please go ahead. Your line is open.

Naresh Chouhan -- Founder, Intron Health

Hi there. Thanks for taking my questions. Just one on M&A, please. You've had a couple of large deals which have resulted in some issues where we're arguing that those assets were developed internally.

The likelihood of those problems arising would've been probably much less likely to have occurred. I'm thinking the AveXis data integrity issues, the Leqvio CDMO issues. And given that even the most diligent acquirers would've been probably unlikely to have found those issues, does it dim your enthusiasm for future deals of this size given the risks involved? And if I may, just does the $60 billion sales number include M&A or is that just organic growth? Thanks.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Naresh. On the second part, just organic growth. We're not including M&A.

I think less about -- I mean, look, I think when we go into new technology areas which we believe we need to do in the long run to be a leader, to be competitive to drive growth, we are going to learn new things. I think certainly, the fact that we are doing small interfering RNA and novel gene therapies is part of the reason we have some of the challenges that we do. But I would say it's less about that and more -- we have enough on our plate with a full internal pipeline. We've done a number of deals which we're currently working on fully scaling.

We have four platforms we want to get to global leadership on, so we have plenty to do. Always opportunistically thinking about M&A, but that's not in focus at the moment. We want to execute on the strategy and plan we have ahead of us and that's where we're focused on at the moment. Next question, operator?

Operator

Thank you. Your next question comes from the line of Emily Field from Barclays. Please go ahead.

Emily Field -- Barclays -- Analyst

Hi. Thanks for taking my question. I just had a quick question on 2021 and the impact of taking on tislelizumab. I was just wondering if you could give us a sense of the order of magnitude of the incremental development costs that you'll be taking on with this asset.

And is that mostly coming from R&D and the initiation of these combination trials? Thank you.

Vas Narasimhan -- Chief Executive Officer

Yeah. Harry, you want to provide some color on that or clarity on that?

Harry Kirsch -- Chief Financial Officer

Yeah, thank you. So, it's a bit complicated. But first of all, we do account for the appropriate, if you will, share of development costs of the current registration trials in our core P&L. It's about one point of core operating income growth, if you will, from a dilution standpoint.

But it will not be a cash expense because the current portfolio is being executed by BeiGene and it's part of our upfront payment. So, it's not a cash expense but an expense given the structure of the deal. We always want to ensure that our core results and the core accounting is of the highest quality as well.

Emily Field -- Barclays -- Analyst

OK. That's very helpful. Thanks.

Vas Narasimhan -- Chief Executive Officer

Thanks, Harry. Last question, operator?

Operator

Thank you. Your last question today comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.

Mark Purcell -- Morgan Stanley -- Analyst

Well, thank you for taking my follow-up. Vas, there's just another clarification, investor question actually on tislelizumab. The question was the 15 registration trials that Susanne mentioned. I'm being asked which of those -- which regions and in which indications are you going to be able to file? So, I guess the question is really reflecting if you need any additional data in a specific country such as the U.S.

or parts of Europe in any specific indications. Thank you for the follow-up.

Vas Narasimhan -- Chief Executive Officer

Yeah. Thanks, Mark. So, I'll just quickly take it. We have rights in U.S., Europe, and a number of other ex-U.S.

markets. BeiGene keeps rights in parts of Asia and Latin America. The clinical trial portfolio -- clinical trials currently being conducted are already conducted with support filings in a full range of indications, so second-line lung which they hope to complete this year, first-line lung, colorectal cancer, head, and neck. Susanne, are there others that I'm missing?

Susanne Schaffert -- President, Novartis Oncology

No, I think gastric is also there. Yeah, head and neck you mentioned. And, I mean, these are global programs; that's probably worth to mention. They're enrolling not only Chinese patients but also from other geographies.

And I think what is important in this setting that the comparator is strong. And for example, we are excited about the second line data in non-small cell lung cancer; BeiGene reported very strong overall survival data versus doce. So, I think that's how you have to see this, that the clinical program, we believe, is very robust and would allow for filings ex-U.S. -- sorry, ex-China.

Mark Purcell -- Morgan Stanley -- Analyst

Thank you.

Vas Narasimhan -- Chief Executive Officer

Thanks, Mark. And thanks everyone for joining today's call. We appreciate your interest in our company as well as all the investors, I appreciate your support of Novartis. And we'll look forward to keeping you up to speed over the course of this year.

Please stay healthy and thank you again.

Operator

[Operator signoff]

Duration: 99 minutes

Call participants:

Samir Shah -- Global Head of Investor Relations

Vas Narasimhan -- Chief Executive Officer

Marie-France Tschudin -- President, Novartis Pharmaceuticals

Susanne Schaffert -- President, Novartis Oncology

Harry Kirsch -- Chief Financial Officer

Mark Purcell -- Morgan Stanley -- Analyst

Laura Sutcliffe -- UBS -- Analyst

Matthew Weston -- Credit Suisse -- Analyst

Steve Scala -- Cowen and Company -- Analyst

Graham Parry -- Bank of America Merrill Lynch -- Analyst

Emmanuel Papadakis -- Deutsche Bank -- Analyst

John Tsai -- Head of Global Drug Development and Chief Medical Officer

Richard Parkes -- Exane BNP Paribas -- Analyst

Simon Baker -- Redburn Partners -- Analyst

Kerry Holford -- Head of Global Pharmaceutical Equity Research

Peter Welford -- Jefferies -- Analyst

Keyur Parekh -- Goldman Sachs -- Analyst

Emily Hutchinson -- Citi -- Analyst

Seamus Fernandez -- Guggenheim Securities -- Analyst

Richard Vosser -- J.P, Morgan -- Analyst

Florent Cespedes -- Societe Generale -- Analyst

Richard Saynor -- Chief Executive Officer, Sandoz

Naresh Chouhan -- Founder, Intron Health

Emily Field -- Barclays -- Analyst

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