Good morning and good afternoon, and welcome to the Novartis Q4 and full year 2021 results release conference call and live webcast. Please note that during the presentation all participants will be in a listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions by pressing star and one at any time during the conference. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. Should anyone need assistance during the conference call, they may signal the operator by pressing star and zero. With that, I would like to hand over to Mr. Samir Shah, Global Head of Investor Relations. Please go ahead, sir.
Thank you very much and good morning and good afternoon, everybody. A big thank you for joining us today on our Q4 2021 and full year 2021 results. 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. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. With that, I now hand over the call to Vas.
Thank you, Samir, and thank you everyone for joining today's conference call. Moving to slide three. With me today, I have Harry, Marie France, Susanne, John, Richard, Karen, and of course you've already heard from Samir. Now turning to slide five, and before moving into the quarter, I'd like to just make a few overarching statements about the company, our direction and our overall profile. We believe we continue to present an attractive profile for investors. A clear strategy as a focused medicines company powered by technology and technology platforms, which we believe will define the future of our sector and the future of medicine.
An attractive growth profile where we're confident in the 4%+ sales CAGR that we've guided to, and with the goal to be above peer median beyond 2026, and an aspiration to be in the high 30s IM margin, which we're well on our way towards. A strong mid and late-stage portfolio with over 20 assets with significant peak sales potential. Platform leadership, which we continue to work towards across multiple defining platforms in the sector. A balanced approach to capital allocation, which I'll speak more about in a few slides. Now moving to slide six. We continue to evolve and sharpen our strategy. We are continuing to look at where to play with a particular focus now on four key therapeutic areas with two additional therapeutic areas we are selectively participating in.
Focus on four key geographies while always evaluating our geographic footprint and aspiration to transform Sandoz. Five key priorities on how we win, which we continue to focus on and believe will enable us to outperform the sector over time. A clear aspiration to be a top three innovator, be in the high thirties in terms of our IM margin, an attractive return on invested capital and continuing to be one of the leaders in material ESG factors in the biopharmaceutical sector. Moving to slide seven. When you look at our track record on our financial performance, our track record, particularly on IM, has been solid. IM sales in the last four years have grown 7%. IM core operating income has grown 13%, which is among the highest in the sector.
Our IM core margin has now reached 36.2% and our group free cash flow continues to perform well and we continue to look at improving our free cash flow generation as a firm. I think this demonstrates that we are delivering against the goals we set ourselves and we plan to continue to do that in the years to come. Moving to slide eight. Just as a reminder, over the coming years we expect to grow that at that 4% or better rate, overcoming the estimated $9 billion of potential generic impacts that we could have in this period with a series of strong growth drivers, six major assets which we believe will have multi-billion-dollar potential. A strong pipeline which would then be added on top leading to that 4%.
Of course, depending on when the Entresto LOE falls, the potential to do even better. Now turning to Q4 and on slide nine. In Q4 we delivered strong performance across our value drivers. Growth was +6% in the quarter with IM reaching 7% of sales. Productivity continued with group core operating up 12%. IM core operating income up 15%. I think demonstrating that productivity power we have within the company. I'll come back to innovation, but we had important innovation milestones in the quarter. In terms of our progress on ESG, we had improved scores on multiple ESG metrics, including the MSCI, and continued our progress on environment and human rights. Focusing in on growth and turning to slide 10.
Our key growth drivers grew 24% in the quarter and now represent more than half of the IM sales. We were pleased with the performance on our growth brands and with Marie-France and Susanne will go through that in a bit more detail. As you can see on the right-hand side of the slide, the steady increase we've had of these growth drivers constituting more and more of our sales, demonstrating the replacement power of our core sales base that we have within the company. Now moving to slide 11. Across the six key brands that we're hyper-focused on, we saw double-digit growth. Cosentyx growing 17%, Entresto at 40%, Kesimpta is now 46%, and Kisqali at 36%. Kesimpta is off to a very strong start on its first full launch year.
Marie-France will go through that in a bit more detail, but we saw very strong share gains. Leqvio is in a build year this year, and we expect over the course of this year to consistently build momentum towards an inflection point in 2023 and beyond time period. As you can see, as we highlighted in our R&D Day, these brands are protected outside of Entresto into the late 2020s or into the 2030s, forming a strong foundation for the company which we can build on with our pipeline assets. Moving to Slide 12, when you take a geographic view of the business, we had consistent growth across U.S., Europe, and China in innovative medicines driven by different brands in each case.
In the US, we continue to show consistent growth, and we have an aspiration to become a top five player in the US over time. In Europe, we remain the largest pharmaceutical company, and again, are looking forward now to launching Kesimpta and Leqvio in the market and to continue that growth dynamic. In China, we have been one of the most consistent growing companies in the high teens over recent years, and we are confident that we will get to our goal of over $4 billion in sales in China by 2025.
We'll go through a little bit more on some of the dynamics in China in quarter four, but we've already seen a recovery from some of the slowdown we saw in Q4 due to the buying patterns, the NRDL listings and some of the other considerations that we have. We'll speak more about that in the conference call. Now moving to slide 13 and turning to innovation. We had multiple milestones in the quarter, the approvals of Semglee in the U.S. and Leqvio in the U.S., importantly from an approval standpoint. Additional submissions, including Lu-PSMA-617 in Europe, as well as alpelisib in PROS, an opportunity for us to take on a very high unmet need, those small indication.
Our readouts, multiple readouts in the quarter, positive data for Cosentyx and hidradenitis suppurativa, as well as with IV administration in psoriatic arthritis. Ligelizumab read out as well, positive versus placebo, non-inferior versus Xolair, and we continue to evaluate the path forward for ligelizumab. And YTB and PHE, which I'll speak more about as well, in terms of our novel CAR T platform. We began our phase III studies for remibrutinib, both in multiple sclerosis and CSU, as well as with ligelizumab in food allergy and cold-induced urticaria. Now moving to the next slide, on slide 14, just a few words on some of the data readouts. Ianalumab is an asset we're very excited about. This is our anti-BAFF receptor monoclonal antibody. Had very strong data in Sjögren's syndrome in a phase IIb study.
We'll be moving into Sjögren's phase III later this year. We are planning as well shortly to initiate studies in phase III for lupus nephritis. We're advancing in SLE as well as in autoimmune hepatitis and expect additional data over the coming 12 months on these two indications. We're also looking to progress within B cell malignancies, where we believe an anti-BAFF receptor antibody could provide an additional option for these patients. Taken together, we think this asset has the potential to be the quote-unquote pipeline in a single asset, and we look forward to advancing it across a broad range of indications. I already mentioned the Cosentyx data in HS. This is a high unmet need area. Hidradenitis suppurativa is a severe, debilitating condition, a good efficacy profile, a strong safety profile.
We are keeping the study blinded until the 52-week time point. Following that 52-week safety data, we will then be able to move forward with submissions in the US. Submissions in the EU are already under preparation, and we would expect them in the first half. As I mentioned, with ligelizumab data demonstrated superiority versus placebo, but not superiority versus Xolair. We'll provide a further update on this asset in terms of its progress in CSU shortly. However, we do believe there's potential for the medicine in food allergy and CIndU, given there is no approved anti-IgE therapy, IgE therapy in these indications.
Now moving to slide 15, just to say a word about the data we recently presented in December on our T-Charge platform, our next generation of CAR T platform, which we're excited about given the potential to provide fast access to therapy, hopefully improved rates of response and longer durability, as well as attractive economics in terms of its production and scalability. YTB323, which is indicated for DLBCL, in a small study of 16 patients, demonstrated a 73% CR rate at month three, and we're looking forward now to reading out the six-month data over the coming months. We plan to start a phase III trial in DLBCL this summer for this asset. PHE885 in multiple myeloma is a BCMA-directed CAR T.
Again, early data, but in the first six patients, 100% ORR. What's unique about this technology platform is its ability to preserve what's termed as T-cell stemness, the ability of T cells to regenerate themselves, to hopefully lead to more long and durable responses if a cancer recurrence should occur, also enables a shortened timeframe for cells to be out of the patient's body. Many things to be excited about. Early days, but we look forward to taking this forward and hopefully, over time, bringing additional targets onto the T-Charge platform. Moving to slide 16. In the quarter as well, we signed four additional BD&L deals to strengthen the pipeline. We acquired Gyroscope, which has a one-time subretinal phase II gene therapy that has the potential to transform the care of geographic atrophy.
In early data in nine patients, rather remarkable results that we saw for this one-time administration. We'll now have to see how those results hold up in larger phase II studies, but at least the potential to address a very large market and a very large patient unmet need with a one-time therapy. We signed an option agreement with BeiGene for ociperlimab, the phase III TIGIT inhibitor, currently being run by BeiGene in global phase III studies in solid tumors, particularly in lung cancer, ESCC, and cervical cancer. We are looking forward to working with BeiGene to fully build out this program over the course of the year, and then as data continues to materialize, determine if a full opt-in would be warranted.
We signed our opt-in agreement with Molecular Partners for Ensovibep, which has the potential to be a broad spectrum coronavirus therapeutic for patients in the outpatient setting. It has three targets of spike protein in three separate binding domains, opportunity for bacterial production, so much higher yields and much more efficient production, also higher scales. We are on track in our discussions with the FDA to complete an emergency use authorization filing, and then it would be determined by a review matter if the FDA would ultimately provide an approval. We also continue to be in discussions with the U.S. government as well as other governments around the world regarding this therapeutic, as well as advancing the phase III trials and subcutaneous formulation.
Lastly, we signed an agreement with UCB for the co-development and co-commercialization of an alpha-synuclein small molecule inhibitor, an opportunity to tackle Parkinson's disease with a small molecule agent against, I think, a very exciting target. Early data, early days, but certainly the potential to address a major unmet need. Now turning to slide 17. Slide 17 and the following slide as well give you an overview of one kind of a snapshot of our portfolio in pharmaceuticals, in cardiorenal. Things are on track, and you can see some additional progress we've made on the Electio outcome studies, and iptacopan and telocastine also remain on track. In neuroscience, Zolgensma, we've initiated the phase III intrathecal study now. Branaplam has also now initiated in its phase IIb study in Huntington's disease. I already mentioned remibrutinib and our agent in Parkinson's disease.
Across the immunology portfolio, a number of ongoing projects and programs in phase II and phase III, all largely on track. At the bottom, you see the status of our wild card programs. Later this year, we would have readouts for QBW and UNR, and we continue to also progress the other agents in that box as well. Now turning to slide 18. In oncology, we also are progressing on track in solid tumors and hematology. The Kisqali/NATALEE readout is on track. It's an event-driven readout, but we continue to expect it by the end of 2022. If the event rate changes and it flips into 2023, we'll of course let the markets know. The CANOPY-A study also is on track for a readout in the second half of this year.
Lu-PSMA, importantly, the additional readout for our PSMAfore study, again, an event-driven study, but we're hopeful to have a readout on that in the earlier lines of prostate cancer by the end of 2022. The review of Lu-PSMA with the FDA is on track, given its action date later this quarter. We also progressed JDQ-TNO. We look forward to presenting additional data on the combination, we hope, over the coming 12 months. In hematology, the asciminib first line approval, third line approval we've already achieved, and Susanne will speak more about that. Then I've already mentioned some of the other agents here. Sabatolimab, our anti-TIM-3, on track for a PFS readout in the first half of this year, and the various other studies moving towards PFS and OS will come over the coming year as well.
A lot going on. We expect additional readouts, particularly in the back half of this year and heading into 2023. When you look at slide 19, you can see the full list of expected events, regulatory decisions, submissions, submission-enabling readouts, additional readouts, and you can also see a large number of pivotal study starts. These studies will be important for us to continue to advance the 20+ assets that we've been talking about that will drive growth 2025 and beyond. Moving to slide 20. Just to say also a word on Sandoz. We saw Sandoz stabilizing in Q4. You saw sales grow +2% in the quarter, as well as biopharma growing 7% in constant currencies.
When we think about the outlook for 2022, we forecast sales to be broadly in line, and Harry will talk a little bit more about the specifics on the guidance. We're assuming here that cough and cold reverts to pre-COVID levels, that biosimilars continues to perform, particularly in Europe, where we have a very strong market position. We also face continued gross margin headwinds due to the price erosion and unfavorable mix, particularly in the U.S., which we expect to fully bottom out in this year and start to move towards a growth dynamic in the back half of next year. Our biosimilars launches, however, continue to be on track, and we're expecting these launches to drive material growth in the back half of 2023 into 2024 and beyond. There are $80 billion of originator sales, a large opportunity. We have 15+ assets somewhere in development.
That will be absolutely critical to move Sandoz into a strong growth dynamic looking ahead. Moving to slide 21, a word on our capital allocation strategy. We remain disciplined and shareholder-focused and really trying to balance the four elements of our strategy. This is a shift. We're not ranking them, but rather really showing them as a balanced approach. We invest in organic business. You can see $9 billion in R&D, over $1 billion in capital investments. We also continue to look at value-creating bolt-ons. We've done around $30 billion of acquisitions since 2018. We also return value to shareholders through our annual dividend, where we propose this year to increase by 3% Swiss francs and 6% in US dollars.
As announced in quarter four, we continue to also return our capital to shareholders where appropriate. Share buybacks of $2.8 billion were executed in 2021, and we're on track with respect to the $15 billion share buyback program that we announced in the back half of last year, which we expect, given the nature of the Swiss second trading line cancellations, take us till the end of 2023 to fully complete. Moving to slide 22. From an ESG standpoint, we continue to make important progress in Sub-Saharan Africa with respect to our human rights commitments in terms of disability inclusion.
Our environmental targets are on track with 34% Scope 1 and Scope 2 reductions, excluding offsets. Waste disposal also reduced and on track to be at half by 2025, all on track towards our goal of being carbon neutral across Scopes 1 through 3 by 2030 and fully net zero by 2040, and sooner, as soon as possible, is our aspiration. This has all led to improved scores from an MSCI. We are no longer having an MSCI controversy red flag. Ranked number two in the Access to Medicine Index and also favorably ranked in the S&P Global ESG ratings, among other ratings that we've had over the course of the year. In closing on slide 23, just wanted to highlight the priorities for the company over the course of this year.
The successful launches of Leqvio, Kesimpta, Lu-PSMA-617, which we believe has the potential to be a very significant asset, and Scemblix, where again, we have the opportunity to build on a third-line approval and hopefully move into earlier lines of therapy. Maintain the growth momentum on our six multi-billion-dollar assets that are the assets that we believe will drive the company's base level of growth over the coming years. Progressing the pipeline of 20+ potential significant sales assets with the opportunity to have be approved by 2026. Optimize our portfolio with the Sandoz review with a plan to have this updated by the end of 2022. Remain disciplined and thoughtful on our BD and M&A to build the growth profile of the company, but also ensure attractive returns for our shareholders.
Deliver those returns through our productivity initiatives, which especially in manufacturing and business services as we move towards the high 30s% in our margins, as well as an attractive return on invested capital profile. Continue to reinforce the foundations of a great company, a strong culture that drives performance, leadership and data science to drive value across the business and being an ESG leader. Thank you very much. With that, I'll hand it over to Marie-France Tschudin.
Good morning, good afternoon to all. On slide 25, I'm pleased to share the quarter four results of the pharma division with you. Our sales grew 9% this quarter. As you know, we're fully focused on our growth drivers and launches and the rejuvenation of our portfolio. You can expect us to continue to drive this shift in 2022 and beyond. Moving on to slide 26. Cosentyx delivered $1.2 billion in revenues and grew 13% in the quarter. We've seen strong demand for Cosentyx across geographies. We did see some impact in China due to the year-end budget caps. However, we've already seen a strong rebound in Q1. Our lifecycle program is starting to deliver with a positive readout for hidradenitis suppurativa in IV and will start to be a growth driver in 2023.
If we look to 2022, our focus is on volume growth in all geographies, especially China. In the U.S., our access position is stable, and we plan to grow with the market. As we will not benefit from the price favorability we saw last year, volume growth for us is key. You can expect to see the typical quarter-over-quarter decline in Q1, followed by continued double-digit growth for the full year, fully on track to deliver on our $7 billion-plus guidance. If I move on to slide 27, Entresto grew 34% in the quarter, finishing the year at $3.5 billion in sales. We continue to pull through the first line recommendations in the U.S. and Europe, and we continue to have good traction with the expanded label in the U.S., which as you know, includes five out of six patients with heart failure.
In China, we renewed our NRDL listing for heart failure, and we are thrilled that hypertension is now listed. The dip that you see in the ex-U.S. sales column is for China, and that is because of the wholesaler compensation for stock given our new price. This is on the back of very good news. Now that we have the listing, we also have access to a much broader population. If you think about the fact that only 15% of patients in China or hypertensive patients in China are well controlled versus, for example, 52% in the U.S., you can start to see the potential. For 2022, we are absolutely confident we can maintain Entresto's momentum in the U.S., in Europe, driving broader and earlier adoption, but we're also very excited about our opportunities in Asia.
If I move on to slide 28, we're now in our third year in the marketplace with Zolgensma, and we've treated 1,800 babies. Because this is a one-time therapy, you will continue to see volatility in the quarters as new markets gain access, as we add the bolus and then move on to an incident population. Our focus is clear. We wanna maintain a leading position in the U.S., focusing on the incident population. We want to accelerate newborn screening. We know it's really important to treat SMA as early as possible, and therefore, our plan is to double the rate of newborn screening in Europe. Three, we wanna continue on our plan for geographic expansion into emerging markets. In parallel, we're progressing with our intrathecal formulation. We're laying the foundation to bring Zolgensma to patients across the full SMA spectrum.
Our STEER study has just opened and just recruited its first patient, and we're also conducting a study in pretreated patients who may benefit from Zolgensma's one-time treatment. If I move on to slide 29. With Kesimpta, we finished the year strong with $147 million sales in Q4. We maintain a high share of voice. We now reach a critical mass with multiple sclerosis specialists. We continue to onboard new patients, and the majority of those patients continue to be in first line, first switch. There is no question that B cell therapy is now the gold standard in efficacy. We also know that there have been questions on safety in the context of COVID, and this has been a priority for us to provide relevant answers to our customers.
With the reassuring vaccination data that we have, we are building additional confidence in Kesimpta's profile and providing further important clinical differentiation in the marketplace. As we drive additional uptake in the U.S. and continue to execute on our launches across the world, you can expect us to continue to do everything to make this Kesimpta story even better. Moving on to slide 30. As you know, we've received FDA approval in December for Leqvio, and we've been in the field for two weeks. On the system side, we are implementing our strategy. Our focus right now is to support the P&T reviews and the implementation of acquisitional referral processes. We've started onboarding alternative injection centers, and we continue to broaden our network. We've also filed for our permanent J-code as we planned.
On the healthcare professional side, we're educating on Leqvio's clinical profile, the twice-yearly dosing, and the breadth of the label. We are really excited about the enthusiasm that we're getting from the market on the clinical aspects, but also seeing the high willingness of physicians to discuss the non-clinical support options. As was said before, the first half of the year will be about laying the foundation to drive the uptake in second half of the year and beyond, when some of the larger systems should be ready for buy and bill, and of course, when our permanent J-code should be issued. On a separate note, we've also made significant progress with the NHS on the implementation plan and are awaiting the lift on the moratorium of all non-COVID related communication and initiatives to begin the rollout of the agreement.
In summary, on slide 31, 2021 was a strong year for pharma. I wanna thank the teams for the focus, the bold thinking, and the diligence around customer obsession and market metrics to deliver exquisite execution. You will see us continue to build on that strong foundation in 2022 with the right investment, not only in our products, but also in new partnerships, customer engagement, and digital tools. Thank you very much, and now let me pass it on to Susanne.
Thank you, Marie-France. Moving to oncology on slide 33, you see that the oncology business grew 4% in 2021, reaching $15.5 billion, with our growth drivers increasing 17% versus prior year. Q4 was a solid quarter, growing 3%. As you see, the growth was driven by continued double-digit growth of brands like Kisqali, Promacta, Revolade, Tafinlar, Mekinist, and Jakavi. We are very pleased to see a continued strong portfolio rejuvenation, with these growth drivers now representing 54% of the total portfolio. Moving to slide 34, Kisqali. We saw very strong performance growth of 58% in Q4, reaching now $285 million in sales. We saw increased demand across all regions as a reflection of further penetration in the first-line postmenopausal segment.
We continued to gain share in the U.S. With Ibrance in the metastatic setting reaching 17% in November 2021. In the international markets, we had an impressive growth of 90%, mostly driven by Europe, where we see sustained leadership in premenopausal setting, but also increased penetration in the largest postmenopausal setting. With the MONALEESA-2 data presented at ESMO, Kisqali demonstrated the longest median overall survival so far in advanced breast cancer, and we now have OS data across all eligible patient populations. This is why Kisqali is also the only CDK4/6 inhibitor highlighted in the U.S. NCCN guidelines to demonstrate OS benefit in first line. We are moving forward with confidence in Kisqali and in collaboration with the SOLTI study group, we have initiated the phase III HARMONIA trial to evaluate Kisqali versus palbociclib in advanced breast cancer.
In addition, we continue our geographical expansion of Kisqali with reimbursement achievement in Brazil and regulatory submission in China. As you know, our key development program is the NATALEE trial studying Kisqali in adjuvant setting for both high and intermediate risk patients. This study has fully recruited, and as Vas mentioned, the readout is expected towards the end of 2022. Overall, we are very pleased with the Kisqali performance and expect continued momentum. On slide 35, you see three of our blockbusters, Tafinlar + Mekinist, Promacta or Revolade, and Jakavi. These brands continue to deliver double-digit growth driven by strong demand across regions. Tafinlar + Mekinist was growing 14%, 14% with strong contribution from Europe. Just to remind ourselves, this is the first and only targeted therapy to achieve both five-year overall survival in metastatic as well as adjuvant.
Tafinlar + Mekinist continues to sustain leadership in metastatic melanoma as the most used worldwide targeted therapy in the setting. Moving forward, we expect growth will primarily come from adjuvant melanoma and non-small cell lung cancer indication, as well as the increased uptake in China. Also, Promacta/Revolade reached very strong growth with 12%, and we saw this growth across all regions with share gains supported by the sustained efficacy and oral administration convenience. We expect continued growth in ITP and SAA. Finally, Jakavi reaching a 12% growth. This growth was driven by earlier usage in myelofibrosis and polycythemia vera, and we continue with our geographical expansion on graft-versus-host disease launches, and we expect further uptake there as well. Moving to slide 36.
Last quarter, as Vas mentioned, we have launched Scemblix in the U.S., and this is a unique STAMP inhibitor with superior clinical profile in late-line CML that could potentially change the standard of care. You see that Scemblix has a very strong clinical profile with a twofold improvement in major molecular response and a three times reduction in discontinuation due to adverse events. Looking at the patient potential for Scemblix, that means that approximately 25%-30% of CML patients may be eligible within the approved Scemblix label. This includes patients experience resistance or intolerance with previously treated two or more TKIs, as well as patients with the T315I mutation. As you know, we have started a first-line registrational trial with filing expected in the first half of 2025.
Leveraging decades of experience in CML, Scemblix is off to a solid start in the U.S. with leading share of voice already within the first months. This is complemented by a robust digital footprint with over 20,000 users and nearly 60,000 patient website visits. We have over 50 patients enrolled in our patient assistant program and have above 150 patients included in our managed access program. Scemblix is also already included in the NCCN guidelines. We are also pursuing global commercialization and the approvals in Europe and Japan remain on track for 2021. Moving to slide 37. With our radioligand therapy, lutetium PSMA-617, we have another exciting launch upcoming. Lutetium PSMA-617 has the potential to address the high unmet need in advanced metastatic castration-resistant prostate cancer.
Results of the phase III VISION trial demonstrated improved radiographic PFS and overall survival. On the commercial side, we are moving forward with launch preparations. We are targeting 400 certified treatment sites across U.S. and Europe. We are leveraging our Lutathera footprint combined with an incremental field force dedicated to prostate cancer. In the U.S., that field force is fully recruited and trained. The same is true for Europe, where we start building that field force. We don't foresee any hospital capacity constraints for the launch in this VISION population. On the development side, we currently have two ongoing phase III studies in the pre-taxane and the hormone sensitive setting, with the potential to significantly expand the eligible population by up to four times. In conclusion, moving to slide 38, I would like to conclude with three important messages.
First, in 2021, we continue to see solid execution on growth brands and portfolio rejuvenation, with sales from our growth drivers increasing 70% versus prior year. With Kisqali, one of our key brands, we continue to gain share in the CDK 4/6 class, and we have strong OS data in metastatic settings, and we are looking forward to the NATALEE readout in adjuvant. We keep our focus on launch execution with Scemblix and with T-Charge and PSMA preparation and advancing our next wave of assets. With that, I'm handing over to Harry.
Thank you very much, Susanne. Good morning and good afternoon, everybody. I'm now going to walk you through some of the financials for the fourth quarter and the full year, as well as provide you with our 2022 guidance. As always, my comments refer to growth rates and constant currencies, unless I were to note it otherwise. Turning to slide 40. Here we compare briefly our results with our latest 2021 guidance. As you can see, overall our full year results were in line with guidance, with a particularly strong Innovative Medicines performance. Innovative Medicines grew the top line by 6% and the bottom line even double digit by 10%. We are pleased that despite a challenging business environment during the year, we were able to deliver on our expectations. Next slide, please.
We finished the year on a strong quarter with sales and core operating income growing 6% and 12% respectively. This resulted in full-year performance of 4% and 6% growth in top and bottom line. Net income of $24 billion benefited of course from the one-time gain from the Roche stake divestment of $14.6 billion. Even if you exclude that effect, and you see that in the release, underlying net income grew a healthy 15%, mainly due to higher sales and productivity gains. Core EPS grew 7% mainly from a strong core operating income growth and was slightly impacted by the Roche divestment in quarter four. Free cash flow was up 14%, reaching $13.3 billion. I will go a bit into more details about free cash flow a little later.
Before we move on, just wanted to highlight that quarter four sales growth includes a positive 1 percentage point impact from a small reclassification effect of contract manufacturing from other revenues to sales. Slide 42, please. This slide shows you the performance by division for the quarter and full year. Clearly, Innovative Medicines had a strong year driven by our key growth drivers, Entresto, Cosentyx, Zolgensma and the key oncology brands which also Marie-France and Susanne laid out. The Innovative Medicines sales grew 6%, bottom line 10%, and margins reaching 36.2% 4 percentage points up from 32% in 2018. An increase over the three-year period of 420 basis points. For the quarter, Innovative Medicines sales grew 7% and core operating income 15%.
As Vas mentioned, Sandoz is still facing some challenges, mainly from pricing pressures, especially in the U.S. and COVID-related demand impacts, although quarter four showed signs of stabilization. Now let's turn to slide 43. Free cash flow of the year was mainly driven by the higher operating income and was up 14% to CHF 13.3 billion. There were also lower payments from legal matters in 2021 compared to what we had in 2020. This was offset, as you can see, by the upfront payment for in-licensing of Tislelizumab from BeiGene. On the next slide, I'm very pleased to announce that we will propose our 25th consecutive dividend increase to CHF 3.10 per share from CHF 3 last year. This is an increase of 3.3% in Swiss francs and 6% in U.S. dollars.
With our dividend reaching 4% and fully aligned with our dividend policy of dividend increases every year in Swiss francs. Now turning to slide 45, where we sum up our guidance on top and bottom line. With the divisions, we expect another year of Innovative Medicines sales growing mid-single-digit % and core operating income to grow mid- to high-single-digit % ahead of sales. The expected Innovative Medicines core margin increase will be driven by the expected good top line momentum and continuation of our productivity programs. For Sandoz, we expect the top line to be broadly in line with prior year and core operating income to decline low- to mid-single-digit %, mainly driven by gross margin pressures due to pricing and product mix. Also on the top line, it's also due to the fact that we do not expect many launches for Sandoz in 2022.
With respect to the entire group, we expect both the top and the bottom line to grow mid-single digit. The key assumption for this guidance, as you can see in the bottom box here, is that we are continuing to return to normal global healthcare systems, including prescription dynamics, and that no Sandoz or Entresto LOE generics would enter in the U.S. in 2022. On slide 46, I would like to add some perspective on other key financial elements of our expected core net income performance. As you can see, we expect core net financial results to be broadly in line versus 2021. The 2022 core tax rate is expected to be in the range of 17%-17.5%. This is higher than the 16% core tax rate range we experienced over the last couple of years.
However, as you can see, about approximately 1 percentage point of this increase is due to the mathematical impact of the Roche divestment. There may also be a slight increase due to geographical profit mix changes, which we will monitor throughout the year. Finally, on slide 47, for modeling purposes, we thought it would be very helpful to you to go into some details regarding the currency impact, especially given the recent appreciation of the U.S. dollar. As you saw in quarter four, currency had a negative impact of 2% on net sales and negative 3 percentage point impact on core operating income. As the U.S. dollar further strengthened, this currency effect, of course, also impacted the sales of our key growth drivers, ex-US in quarter four.
If late January rates prevail for the remainder of 2022, we would expect the full-year impact of currencies on top line to be a negative 3 percentage points and on bottom line, negative 4 percentage points. In quarter one, the impact is a bit more pronounced, and sales would be negative 4 percentage points and then bottom line, negative 5 percentage points. As currency rates are quite volatile, as we all know, we update this impact estimate every month on our websites. With this, I hand it back to Vas.
Terrific. Thank you, Harry. Moving to slide 49 and briefly in closing. In 2021 we delivered on our goal of mid-single on guidance of mid-single digit top line growth, margin expansion, strong free cash flow. We remain confident in our in-market growth drivers, six major brands that are performing well across geographies, supporting our confidence in our outlook of 4%+, sales carry into 2026. We've continued to deliver important innovation milestones across the portfolio, and we'll work over the coming 12 to 24 months to deliver important milestones on our 20+ key assets. We remain balanced in our capital allocation, continuing to invest in innovation alongside returning capital to our shareholders. With that, operator, we can open the lines for questions.
I would ask that each questioner limit themselves to one question, and we'll try to go multiple times through the round as far as we can in the allotted time. Thank you. Operator.
Thank you. Thank you very much, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. Please limit yourself to one question only. Again, that's star and one if you have a question. Your first question today comes from the line of Graham Parry, Bank of America. Please go ahead. Your line is open.
Great. Thanks for taking my question. Just regarding the Sandoz review, obviously, you're looking there and you're saying all options are still on the table despite there being some recent speculation again about there being some private equity interest. When you're considering a sale versus spin versus keeping the business, how much consideration are you giving to what multiple you think the market would value Sandoz at versus what an acquirer might view it at? And secondly, in the scenario of a sale, what uses of cash would you consider given that you're already doing a large buyback? Would the intent there to be to return capital to investors, or to put it back into the business through M&A and organic investment? Thank you.
Thanks, Graham, for the question. Let me start with where we are on the process. I think as we guided at the end of last year, the first part of this year is really focused on carving out the financials for Sandoz, being clear on the perimeter and then being able to provide the relevant information for them to make concrete formal offers, whether those are private equity or other companies. Alongside that, evaluate the options for a potential spin of the business. Lastly, a potential retention of the business.
We are going through the work right now of evaluating those different options, and I expect that to take us to the middle of this year. Before then we can take the next steps and hopefully come to a decision in the second half of the year. In terms of considerations, we're of course always looking at a few things. One, how to make Sandoz as successful as possible consistent with the aspiration for Sandoz to become the leading generics company in the world. Second, what is most value creating and also tax efficient for our shareholders? We, I think, have proven with the Alcon spin that we're able to think through those considerations in a way that is beneficial to the shareholders and really making sure we're thinking about these things in a shareholder-friendly way.
I think it's really premature for us to speculate if there were a quote-unquote sale, how we would use the cash. I think we're still a long ways away from that point in time. We would of course be able to determine that at that point in time. We would stay consistent with the balanced capital allocation approach, which I outlined earlier, thinking through investing in the business versus returning value to shareholders. Thanks for the question, Graham. Next question, operator.
Thank you. Your next question comes from the line of Richard Parkes, BNP Paribas. Please go ahead. Your line is open.
Hi. Thanks very much for taking my question. I've got a question on capital allocation. I remember on the last call, you mentioned that you were engaging with investors around the sort of balance of returning the capital from the Roche stake sale between sort of buybacks and M&A. I just wondered how your thoughts on M&A and business development had evolved based on that feedback. I'm just wondering if more meaningful bolt-ons have moved up or down the priority list based on that feedback. Thank you.
Yeah, thank you. Thank you, Richard. I think not much more to say on the feedback. I mean, what I think we can say is that we know that given the strong cash flow that we generate at Novartis, we have the ability to continue to do bolt-on acquisitions like we've done in the past when we find attractive assets that fit with our therapeutic area goals and our platform goals. As we evaluated the situation over the course of December, it became clear that at this point in time, we could return significant capital to shareholders through the buyback while maintaining the ability to also do attractive, accretive M&A if it should materialize.
Right now, our focus is of course first and foremost on driving the business and then evaluating the various options that are out there over time. Of course, being very patient to ensure we only do deals where we're confident that we can generate significant returns for the company and also fit with our strategic priorities. I would say there's nothing imminent, and we're gonna continue to evaluate the options and watch how valuations move in the sector, and then look for opportunity as they arise. We're quite happy to continue to do deals like the four deals that we've done in quarter four that enabled us to acquire four mid-stage and/or late-stage assets through various deal structures, we think at attractive financial terms. Harry, anything else you wanted to add on that?
No, I think one element to see. I think you know, also feedback on the $50 billion share buyback has been quite positive. Also maybe some analyst investors are not very familiar with the Swiss system where we have to buy these on the second line for cancellation, and that takes then until the middle to the second half of next year. 2023. It's unlike U.S. situations where you can do this quite quickly. As we see then can monitor the market, we do as much as we can on this $50 billion share buyback as you go forward. There's also a bit of time to continue to think about the different ways of capital allocation.
Of course, we have to see, as Vas mentioned, you know, would there be great opportunistic M&A opportunity here? Otherwise, as we laid out the capital allocation priorities, that's how we're gonna allocate continuously our capital.
Thank you.
Thank you, Harry. Next question, operator.
Thank you. Your next question comes from the line of Laura Sutcliffe from UBS. Please go ahead. Your line is open.
Hello. Thanks. A question on Leqvio, please. You've talked a lot about the hard work you've done in removing access and reimbursement hurdles in the U.S., but do you think you need any specific guideline inclusions or recommendations to start driving use there? Is there the possibility of sort of trying to protocolize this in any way in your centers of interest to get sales going? Thanks.
Thanks, Laura. Marie-France?
The first thing I'd say is that LDL lowering is already widespread across the guidelines, and we already have Type IA in Europe. When you ask your question, the intent philosophically of us going or concentrating on the 200 systems of care is exactly that. It's around how do you protocolize the use or the management of lipid lowering within a system. How that looks like concretely will probably depend system by system. As you know, we've just launched a cooperation with the AHA. It's not necessarily specific to Leqvio, but it is around how do you better monitor and control cholesterol lowering for patients. The intent is there.
It's about making sure that we can identify the care pathways and then also support the centers in how they can specifically identify patients to come in when their LDL is not at the level that it should be or not at goal. You're absolutely right. That's the intent. That's the way we're looking at it. Locally, it's gonna look very different country by country, system by system, but that's the goal, and ultimately will change the landscape in ASCVD, because today, even though there are medicines on the marketplace, patients are not being treated and they're not at goal, and therefore you see 18 million deaths worldwide because of ASCVD.
Thanks, Marie-France. Thanks, Laura. Next question, operator.
Thank you. Your next question comes from the line of Andrew Baum from Citi. Please go ahead. Your line is open.
Many thanks. Could you just outline for us the differences between the 15,000 VICTORION-2P and the ORION-4 trial for Leqvio? I'm assuming this is just a sort of marketing-based phase III to expand clinician experience, but maybe I've missed something different about the patient populations apart from the subtleties. Maybe if you have a second, perhaps you could comment on the ligelizumab surprise, given how robust the large phase IIb data was. Is it that the Xolair arm did better than expected? If you have any insights, it'd be great to hear. Thank you.
Yeah, thanks. Thanks, Andrew. John?
Yeah, sure. Thanks for the question, Andrew. Specifically on Leqvio, as you know, the study ORION-4, which is being conducted in the U.K., is more of a population-based approach to looking at secondary prevention. That is mostly in the U.K., with some patients in the U.S. The VICTORION-2P is a broader patient population where we're going globally, not only in the U.S., but across major geographies throughout the world. We know that there are differences in practice patterns throughout the world. What we intend to do is ensure we follow these patients and make sure that we have a clear understanding of the treatment for secondary prevention for Leqvio. Those are the approaches that we're taking difference of ORION-4 versus Leqvio. Back on your question, for ligelizumab and what we've seen.
You know, we started the phase III study, PEARL 1 and PEARL 2, which were designed against the active comparator, which was omalizumab. These studies were based on primary endpoints that we saw through our phase IIb study. That phase IIb study had 380 patients and 80 patients per arm. As we've actually demonstrated or showed during the fourth quarter, as we shared at the R&D day, we did achieve the primary endpoint of superiority versus placebo, but we did not demonstrate superiority versus omalizumab. We're currently reviewing that data and we're evaluating the best potential for moving that forward. As Vas stated earlier, we're advancing the studies in CIndU and food allergy, and they're continuing as planned.
Maybe, Andrew, just one additional point to John's comments, to your specific point. We did see omalizumab perform better in the phase III study versus the phase II study, so that is a leading hypothesis we have, but I think still more work to do to fully ascertain why we saw the difference between the phase IIb and the New England Journal of Medicine and the results that we saw in phase III. As soon as we have a better understanding, we'll of course share it. In the meantime, we'll continue to develop ligelizumab in food allergy and CIndU, given the lack of an IgE drug for those indications. Thanks, Andrew. Next question, operator.
Thank you. Your next question comes from the line of Simon Baker from Redburn. Please go ahead. Your line is open.
Thank you for taking my question. It's a question on the impact of COVID, specifically in three areas for you. First, could you give us an update on the dynamic MS market as it affects Kesimpta and also recruitment into the phase III for the remibrutinib study that started in fourth quarter, and also for Leqvio in the U.K. Marie-France, you mentioned the NHS non-COVID backlog is about to be released, but I just wondered how the significant backlogs within the U.K. healthcare system could potentially impact the rate at which you will accrue the target number of patients over the next few years. Thanks so much.
Thank you, Simon. First, Marie-France, on the MS market and Leqvio NHS.
Maybe I'll just start off by saying that, you know, we're all getting used to COVID, and I think not only the industry, but also healthcare systems in general, we're sort of learning to become more and more agile. It is true that there are areas that are disproportionately impacted. Clearly the dynamic multiple sclerosis market, if you look at it is still below pre-COVID levels. We are also seeing, you know, as you said, a delay in our Leqvio launch in the U.K., given this moratorium on anything that's not COVID related. You know, ultimately, yes, it's true. I don't think for Kesimpta, it slowed us down.
I can already say, for example, that in the beginning of the year, we already have all of our patients reverified. We've tried as much as possible to be out there with physicians. Our share of voice is high. We have absolutely doubled down on patient services to make sure that patients are, you know, not left out in the cold in this whole sort of pandemic era. I do think it's almost allowed us to basically rethink some of the way that we approach the market and do better. However, it's a clear reality on certain areas, and not only those. For the U.K., as I, you know, as I said this morning, it hasn't really slowed us down on the implementation.
I mean, we've been working really diligently in the background on things that we would have had to do anyway, right? NHS guidelines, making sure that the communication is ready to go out. Looking at, for example, the patient digital identification. NHS guidelines have already been written. I think when this moratorium is lifted, and of course, you know, remember that this is all in the primary care sector. Our entire plan for the NHS is centered around the primary care physician, and that's where the moratorium is. We're waiting for that to be lifted, but I do wanna reassure the audience that we're not at a standstill. We're doing the things that we would have to do anyway, and laying the groundwork for the future.
With you know, just maybe a last word on Cosentyx. You know, we're bullish on our ability to double sales in the U.S. We've got approval in 63 countries around the world. We're working through reimbursement. You know, we believe it's gonna be a good year for Cosentyx despite the local, let's say, lockdowns or pandemic influence that we see across the globe.
John, on remibrutinib recruitment, any insights yet?
Absolutely. Thanks for the question, Simon. You know, the MS space is one that we know very well from our experience and the studies that we conducted across Gilenya, Mayzent, as well as Kesimpta. We announced earlier in the year in 2021 that we were advancing with remibrutinib, which is our selective molecule BTK inhibitor in the space. We had discussions in the middle of the year to late in the year with regulatory authorities, and we've already started recruiting at the end of the year. We know the space well. We're confident that we can recruit in the MS space, and that we're excited to continue to fulfill the criteria in terms of advancing the recruitment for the MS patients for remibrutinib.
Great.
Thanks so much.
John. Thanks, Simon. Next question, operator.
Thank you. Your next question comes from the line of Tim Anderson, Wolfe Research. Please go ahead. Your line is open.
Yes. Thank you for taking my question. It's Richard Wagner, Wolfe Research, for Tim Anderson. My question on M&A, whether you can say definitively that you won't do larger M&A, meaning something that would be, say, $30 billion or larger. Thank you.
Yeah, thanks for the question, Richard. We don't have plans to do quote-unquote “larger M&A.” Hard to sign up for specific thresholds given, you know, the dynamics in the market. Our focus is not larger M&A. Our focus is bolt-on. Bolt-on deals, most of the deals we've done, as I mentioned earlier, have been sub $1 billion upfront with payouts for the total deal value of less than $2 billion in recent times, including the four deals that we recently signed, and we continue to focus our energies there. We look at larger assets. Valuations are stretched. Expectations remain high. Harder to make the numbers work to create value for shareholders and an attractive profile for Novartis, but we continue to assess those, let's call them larger bolt-on deals.
Beyond that, we are not looking at large M&As, no, at this time. Next question, operator. Thank you, Richard.
Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead. Your line is open.
Thank you very much. Question please on Sandoz. In your presentation, Harry, you're speaking of stabilization in Q4, but the 2022 guidance for this division is somewhat disappointing. I wonder if you can walk us through the drivers of your guidance for operating profit decline this year. Is that predominantly price pressure, more of the same COVID disruption, or is there some element of more investment required to see the top line of this division return to growth? I guess specifically I'm looking for what you expect to get more difficult for Sandoz this year versus last, given the type of stabilization signs you mentioned in Q4. Just a very quick follow-up. Can we assume the contract manufacturing revenue reclassification that you mentioned in the quarter is a one-off event? Okay, thanks.
Thanks, Kerry. Maybe first on Sandoz, Richard, you wanna start and then maybe Harry can chime in if anything's missed.
Yeah, sure. Thank you, Vas. Thank you for the question, Kerry. As I said, look, Q4 we saw things returning back to a more normal state of affairs, and a nice, I guess, solid performance for quarter four. As we go into 2022, I mean, we've seen good growth from the rest of the world, and really the challenge continues to be the U.S. That's
Slowly, the impact of price clearly drives the issues in the U.S., but we're slowly stabilizing. Really, I see 2022 as a year where the rate of decline in the U.S. starts to stabilize, but it does drag down the overall business. Price still is a significant impact. Bear in mind, 2022, we don't see many significant launches. It's still a fairly quiet year in terms of LOE launches. Really the impact on bottom line is really a mixture of price and mix, and we expect that then to slowly start changing as we come out of 2023 into 2024 as the biologics pipeline starts to get kicking again and the U.S. continues its stabilization journey, and we see accelerative growth then in Europe and the rest of the world.
Thanks, Richard. Harry on contract manufacturing, and I don't know if you have any other comments on Sandoz.
No, I think Richard said it all on Sandoz. In terms of carry of contract manufacturing, you know, we have reported relatively small contract manufacturing business within other revenues. Now that we may increase over the next years a little bit that business, you know, we basically chose to change representation, split up the sales and COGS. We also transparently show that actually on page 13 of the condensed financial report in Established Medicines, you see that under the contract manufacturing line, $108 million in quarter four, which is kind of the full year 2021, as we decided, you know, in the year that maybe over the next few years this may increase. That's why we changed that. It doesn't change the full year number for the company.
It changes in the quarter, basically by one point on the company and the two divisions. You will see that as we go forward, you know, how this is developing. From that standpoint, we thought it's a better representation as we go forward.
Thanks, Harry. Thanks, Kerry. Next question, operator.
Thank you. Your next question comes from the line of Keyur Parekh from Goldman Sachs. Please go ahead. Your line is open.
Hi. Thank you for taking my questions. Please, two, if I may. First, kind of Vas in your introductory comments you spoke about your aspiration to be a top-three innovator. I was wondering if you might be able to give us some more details around kind of how do you define a top-three innovator. Is that in terms of number of new drugs approved? Is that commercial value of the pipeline? Just your thoughts around kind of how you define that. Then secondly, as we look forward to the phase III study readout for iptacopan, what should be our kind of expectations around the profile for that? Should we be looking at superiority? Should we be looking at something else? Just kind of your confidence around that and where should our expectations be for that molecule. Thank you.
Yeah. Thanks, Keyur. On the first one, you know, a few measures on our minds. You know, one is the replacement power and can we be a leader in consistent replacement power of our sales? I think replacement power and or freshness index are valuable measures of the power of an innovation engine to replace sales within our sector and then ultimately to grow the sales of the company. Second, we're very focused on the value per NME that we are able to deliver.
We're over the last five years have been the leading company in the sector and the number of NMEs approved, but we'd like to be the leader in the value per NME or peak sales per NME, put it another way, that we're delivering to the to the market. Of course, you know, ultimately this all leads to long-term sales growth and our ability to have an innovation engine that can drive that sales growth where we wanna consistently be. I would say replacement power and value per NME are two high measures on our minds. In terms of the phase III profile of iptacopan, John?
Yeah. Thanks, Keyur. As we look at the Iptacopan and the way that we're looking at the overall profile, obviously we're looking at the overall unmet needs of the patient. As you know, this is a Factor B that is actually targeting the alternative complement pathway. We're looking at both extravascular and intravascular hemolysis for PNH in this specific indication. Also, as we think about the renal indications, we're looking at it from the standpoint of reduction in terms of proteinuria. It could be in a couple of different ways as we know that these patients have a significant unmet need, one, that they actually may need something more than what's the current standard of care, which is through ACE inhibitors and ARBs. This could be a combination approach of moving forward.
The second way of looking at this, not only in terms of unmet medical need, is also the route of administration or in terms of the convenience for the patients. As we think about the approach, many patients actually are requiring the sub-Q administration, which could take up to 60 minutes, and having an oral administration twice a day would be much easier in terms of the approach. Thirdly is evaluating the safety profile as we look moving forward, and we'll find out more about the safety profile as we read out in our studies. That's the way that we're looking at iptacopan overall across the indications for PNH as well as C3G, IgA, and other renal indications.
Thanks, John. Thanks, Keyur, for the question. Next question, operator.
Thank you. Your next question comes from Wimal Kapadia from Bernstein. Please go ahead. Your line is open.
Oh, great. Thank you very much for taking my question. So I just want to touch on PSMA. You have an interesting readout PSMA for potentially late 2022. But how should we be thinking about the incremental efficacy versus current benchmarks? And then in particular, how should we be thinking about the pre-taxane setting from a potential perspective versus the post-taxane setting? And then just tied to that, the launch of, you know, from the VISION study, is it fair to assume Lutathera trajectory is a fair benchmark or just given prostate is a larger indication, the trajectory should look a little bit different, you know, with more sustained growth beyond the initial ramp from saturation of clinics with capability. Thank you.
Yes, thanks, Wimal. Maybe Susanne first on the overall story with lutetium PSMA and the launch of the VISION study, and then I'll hand it to John on the specific questions on pre- and post-taxane. Susanne? Susanne, are you there?
Sorry, I was on mute.
Sound normal.
Lutetium PSMA has demonstrated very strong data in the metastatic castration-resistant prostate cancer population, as you know, with significant radiographic PFS and OS. We know in this population there's basically no alternative and lutetium PSMA has demonstrated superiority versus the standard of care. We expect there quite big interest, and we have started managed access programs where we already see quite high demand. Therefore, when you ask me about the uptake, it will be probably steadily going up. We don't expect a big bolus. This is first line prostate cancer patients. Of course, incidence of prostate cancer is much higher than, for example, neuroendocrine tumors. Therefore, I think we see different dynamics in the uptake. Of course, it's a smaller part. It's the last line of prostate cancer.
We expect continued growth and not like a bolus and then stability. It's very different population than GEP-NET. Maybe just a comment before I hand over to John on the setting. I mean, the current indication that we have filed for would really be in last line after androgen therapy and taxane chemotherapy. Therefore, of course, risk profile that we see on lutetium PSMA, we would aim to go earlier. Certainly the pre-taxane setting is one of the settings that is significantly bigger than what we have filed for in the current indication. With that, John, maybe over to you, maybe a few words on PSMAfore.
Sure. Happy to talk about PSMAfore. Maybe to start off, just to think about prostate cancer. As we know, 80% of prostate cancers actually express PSMA. So that's a starting point in the pathophysiology. What we saw in the third line, as Susanne expressed, is we saw that we had 38% improvement in overall survival and 60% in terms of radiographic progression-free survival, as well as combination of OS. That is the starting point. We know that there are a number of patients that are in need of additional treatments, whether that's in the pre-taxane setting or in the first line setting, especially given the toxicity of the taxanes in chemotherapy. What we know is radioligand therapy has less adverse events than compared to chemotherapy.
We've already started recruitment in the pre-taxane study, and we're hoping to read out before the end of the year for the second-line treatment. We're also looking at first line treatment in terms of hormone-sensitive population, and that study is also advancing. In addition to those studies, we're also looking at studies in terms of patients who have not had metastases in terms of prostate cancer. I think this is gonna be a very broad program as we move forward for lutetium PSMA.
Great. Thank you.
Great. Thank you, John. Thank you, Wimal. We have still quite a few people in the queue. If we could try to limit ourselves to one question, we'll try to get to as many questions as possible. Next question, operator.
Thank you. Your next question comes from the line of Matthew Weston from Credit Suisse. Please go ahead. Your line is open.
Thank you. My question's on Ensovibep. Harry or Vas, I'd be very interested to understand how you've integrated it into guidance. I can see from your slides that you've given it a billion-dollar probability-adjusted peak sales potential. Obviously, if you're able to achieve regulatory emergency use authorization, we could see significant bolus orders. I'd love to know what you've taken into account when you've set guidance for 2022 too. Thank you.
Yeah. Thank you, Matthew, and I can take that. We have not included ensovibep in our guidance, any of the guidance that we've provided today. I think as we understand better, as we move through the emergency use authorization application and review process, ultimately understand the FDA's decision and then the potential contracting we would have with the U.S. as well as other interested parties around the world. We've had discussions with a number of other governments around the world around the medicines, but I would say most of those governments have centered their view on how the FDA ultimately views the EUA application, if they were going to make emergency orders.
We think it's prudent right now not to include it, and then once we understand the dynamics better over the course of Q1, we hope, or into Q2, we would then update accordingly.
Thank you.
Great. Thank you, Matthew. Next question, operator.
Thank you. Your next question comes from the line of Richard Vosser from JP Morgan. Please go ahead. Your line is open.
Hi. Thanks for taking my question. Just a question on price pressure from ex-U.S. governments, et cetera. I mean, they've been pretty hit by COVID and COVID expenses. After the great financial crisis, we saw some increased pressure on drug prices. You know, are we gonna see something like that? Are there any murmurings from governments on pricing pressure generally? Thanks very much.
Well, I can start and say, as far as my discussions have gone on with various health officials in Europe, I have not heard an increased focus or shifts in terms of the support for innovative medicines and enabling medicines to have broad access or improved access. Certainly that's a priority for Emmanuel Macron and his European Commission presidency. Maybe Marie-France, do you have any thoughts or insights on this?
Yeah, I mean, I just think in general, we always have to be prepared. I mean, we do more and more have to make the case, or we see limitations on reimbursement, in terms of line of therapy, et cetera, et cetera. You know, obviously, we have a lot of experience, and we're very used to that in the European landscape. You see a lot of tough negotiations happening in China. I would say it's a little bit almost like the ticket to entry is making sure that the value of our products is recognized, that we're focused on value-based pricing, which I think is something that Novartis has been, you know, very diligent about.
Making sure that access is really top of mind on any strategy when it comes to product launch or making sure that more patients can reach products faster.
Perfect. Thanks, Marie-France. Thank you, Richard. Next question, operator.
Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead. Your line is open.
Thank you for taking the question. Maybe I'll take one on ianalumab and Sjögren's and like the decision to progress into phase III. I guess question around design and timing. You've published data that look, I would say better in patients with less advanced disease. So have you reached any decisions, excuse me, yet about the phase III design? What breadth of enrollment is that likely to include in terms of patient population, and therefore, what proportion of the Sjögren's population, which is pretty large, that phase III trial might apply to? And then just in terms of timing, I think you told us that the R&D Day 2026 was the likely timing for a potential phase III readout.
Is there any way that could be accelerated, for example, on interim surrogate or biomarker data, since that would imply a pretty long phase III timeline? Thank you.
Thank you, Emmanuel. A very good question. John, on ianalumab phase III design for Sjögren's.
Yeah. As we think about ianalumab, and as Vas said earlier, we're excited about a number of indications in Sjögren's syndrome, lupus nephritis and SLE. Specifically, as you ask about Sjögren's syndrome, as you know, we've advanced based on results that we've seen from our phase II study. These are patients who actually have had high ESSDAI scores, and that's the specific population that we're targeting moving forward in this population. We are going to start recruiting patients in the second half of this year. In terms of advancing, I think the boldest here is the largest Sjögren's syndrome phase III study that's been conducted, actually, I should say the largest study, not phase III. The largest study that's been conducted has been conducted by us.
We wanna ensure that there's consistency in terms of these patients that we're recruiting, because Sjögren's is a very diverse population of patients. We've guided the results in 2026, and we will update as we find the patients and how recruitment goes. We are using strict criteria for inclusion to ensure that we get the best results moving forward. Currently, we are expecting results in 2026.
I mean, I think one of the dynamics I learned is how important it is to have well-trained centers here that really ensure that they apply the SDI and some of the other measures in a consistent way. I think we wanna be appropriately cautious on our timeline. Then, of course, as we learn more, as John said, we'll provide updates on ianalumab across all of the indications that we take it forward in. Thanks, Emmanuel. Next question, operator.
Thank you. Your next question comes from the line of Mark Purcell from Morgan Stanley. Please go ahead. Your line is open.
Yeah, thanks for taking my question. Entresto China, can you help us understand the size of the opportunity in China and hypertension, but when the LOE timing is gonna kick in? On the basis of that, you know, the pivot opportunity into the retail pharmacy setting to maintain your momentum in China. I notice [indiscernible] in terms of clarification. In terms of the Sandoz considerations for counterparties, what should we expect next in terms of biosimilar data? What are the key LOE launches coming up in 2023 and beyond?
Yeah, absolutely, Mark. First on Entresto China, Marie-France.
Yeah. The opportunity, certainly from a volume perspective, is significant, right? We're moving the population from 7 to 8 million heart failure patients to about 240 hypertension patients. As I said before in my comments, hypertensive patients in China are really not well controlled. There is a big opportunity. Obviously, there was a significant price concession as we listed NRDL, but we do think that it is a worthwhile proposition just because there's an opportunity to just expand to such a broad population of patients. We have broadened our footprint as well. We're making the necessary investments. We also want to make sure that we have the right digital tools in place.
As you know, we have a cooperation with Tencent where we're looking at, of course, Entresto independent, but looking at making sure that heart failure patients can be more in control of their own monitoring. There are a lot of activities in this space. As you know, in China, CVD is a major, you know, cardiovascular disease is a major problem with massive costs. When it comes to the patent situation, it's hard in China to give a definitive answer. We are obviously working to secure RDP in China, and I think that's you know, an industry-wide initiative. There are some question marks around until when, and I certainly couldn't give you guidance on that here today. The opportunity is significant.
We're thrilled about it. This was, as we said, you know, a potential upside for us and could be up to about a third of our, let's say, growth in Entresto for this year.
Thanks, Marie-France. On Sandoz Biosimilars' upcoming launches, Richard.
Thanks, Vas. Really the next launch is already adalimumab and natalizumab coming in, I guess, late 2023 into 2024. As I think I commented earlier, that's really the start of the next wave of biosimilars that should start accelerating both our top line and clearly the margin expansion from the business. Clearly we'll update as we file and move those products forward.
Thanks, Mark. Thanks, Richard. Thank you, Mark. I think we have time for I don't know how many more we have in the queue, but operator, let's take the next question, and we'll keep going till the mid of the hour.
Thank you. Your next question comes from the line of Florent Cespedes from Societe Generale. Please go ahead. Your line is open.
Good afternoon. Thank you very much for taking my question. A quick follow-up on China, please. Could you please elaborate on beyond Entresto, which are the growth drivers there and potential risk and how you see the momentum in China? Thank you.
Marie-France, you wanna take that on pharma China?
Yeah. We've got three main growth drivers for the pharma business in China, Cosentyx, Entresto, and Lucentis. All three products are strong, showing strong growth. I mean, as we mentioned before, they were all effective in Q4, but Q4 is also normally the lowest quarter in the year for us. We talked about the budget constraints for Cosentyx. We've seen the rebound in Q1 for Entresto, the NRDL listing and the stock compensation, and Lucentis was due to COVID lockdowns. You know, the one thing I'll say about China is that going forward and giving the fact that they, the country is now so open to innovation, we are now thinking about China as we think about any other country.
When we look forward at our portfolio, whether that's Leqvio, we just received the launch of or the approval for Kesimpta, we are thinking about our portfolio in China in the same way as we're thinking about our portfolio in the U.S. and Europe. Going forward, that's what you can expect. The three growth drivers. Maybe the big exception is Lucentis, which continues to be a strong growth driver for us in China. That's where the focus is, that's where we're investing, and that's where our footprint is working.
Thank you very much.
Great. Thanks, Marie-France. Next we'll go to, I think we have two more first-time questions. Next question, operator.
Thank you. Your next question comes from Peter Welford from Jefferies. Please go ahead. Your line is open.
Hi. Thanks for squeezing me in. It's one for Harry, really. The outlook for Innovative Medicines. The outlook for the core operating income, mid- to high-single digits, is sort of slightly above sales growth. Obviously, this year you started similar, but you delivered close to 10%. Would you talk a little bit about what we should be thinking about the greater investments, I guess, you're making this year that, if you like, constrain perhaps the margin expansion versus the benefit we saw in 2021 that result in that mid- to high-single-digit growth? Or is it just conservatism on your part? Thank you.
Thanks, Peter. Harry?
Thank you, Peter. Yeah, thank you, Peter. Of course, always a fine balance, right? As we know in pharma companies, one can get almost any kind of core margin one would like to have, but it's always this very delicate balance between investing and also driving, of course, productivity as we do. Overall, you know, we have made significant strides on the core margin improvement, as Vas shared in one of his earlier charts. You know, 180 basis points in 2019, 220 basis points in 2020, and then 130 basis points last year. A part of that was also some restricted investments, if you will, due to the pandemic situation.
We always ensure that we invest appropriately in the R&D line, certainly, and we have to ensure that the launches are getting very well supported, and we have fantastic launches.
That Marie-France Tschudin and her teams are driving. I would expect each of the next years in Innovative Medicines some good margin improvement, but of course not to the level we have seen over the last two to three years. It's a balance and the investments are clear in the pipeline, the launches. Thank you.
Thanks, Harry. We have time, please, Peter. Last question, operator.
Thank you. Your last question today comes from the line of Seamus Fernandez from Guggenheim. Please go ahead. Your line is open.
Oh, great. Thanks for the question. Just wanted a couple pipeline questions very quickly. Just in terms of the differentiation, what makes ianalumab you know unique from other anti-BAFF compounds that have failed in similar type indications, particularly in lupus. I think we've seen a number of challenges there. Just separately on ligelizumab versus remibrutinib in CSU, can you just help us understand the decision points you know as it relates to ligelizumab for filing and then you know how if you do launch there you'll trade off your expectations for remibrutinib in a similar setting? Thanks.
Yeah. I think, John, are you still there. You wanna take the ianalumab question?
Sure. Absolutely. Thanks for the question, Seamus. As we look at ianalumab, you know, this is our anti-BAFF agent, and we really see two different modes of action with ianalumab. It's a direct lysis of B cells by ADCC as one path, and the other is BAFF receptor blockade that interrupts the BAFF-mediated signaling for B-cell maturation, proliferation and survival. The difference here is there are dual modes of mechanisms of action versus what has been seen with previous BAFF receptor blockers. What we've seen is actually this counterbalance of the two mechanisms that allows us to see. We've actually seen good responses, as we said earlier in our phase II studies, and that's why we're moving forward in these various indications. On your second question-
I think.
Go ahead, Vas.
I was just gonna chime in on, I think, some of the competitor historical molecules only targeted the BAFF ligand and then only certain subtypes of the BAFF ligand, so not completely comparable to previous results. Go ahead, John, on remibrutinib.
Yeah. In terms of looking at remibrutinib versus ligelizumab, as we look at both combinations, we've seen good results in both. As you know, for remibrutinib, for the BTK selective oral inhibitor, what we've seen is also good results in CSU with an oral compound. As we're moving forward, we're looking at both approaches and we'll make decisions as we further analyze the results from ligelizumab. As we move forward with remibrutinib, we'll continue recruitment in these studies.
I think, Seamus, the idea of ligelizumab, I guess the question, is there value in getting the medicine on the market ahead of the potential future launches in food allergy and CIndU? Or is that not a sensible strategic approach? We just haven't come to a determination yet. Our current view is that with the superiority to placebo, it is potentially fileable and of course a review issue with the FDA. We're gonna make those assessments carefully and then decide what the right approach is going forward. Very good. Thanks everyone for joining today's conference call. We hope it was helpful to get a perspective on both the near term but also the longer term outlook in the company, the pipeline, the products and the things we're excited about. We're excited about delivering a strong 2022.
We'll look forward to keeping you up to date through various interactions, and then of course at our next quarterly conference call. We wish you a great year, and we'll look forward to speaking to you soon. Thank you.
Thank you. That does conclude today's conference call. Thank you for participating. You may all disconnect.