Adjusted for overall negative currency effects, group sales in 2022 advanced 4% to $50.5 billion as gains from heart failure drug Entresto and multiple sclerosis (MS) drug Kesimpta were partly offset by competition from cheap generic copies of established MS drug Gilenya.

Novartis Chief Executive Vas Narasimhan told CNBC’s Geoff Cutmore the company had faced challenges in the first half of 2022 including hyperinflation and the ongoing impact of the coronavirus pandemic.

“Now we’re seeing some of those things start to stabilize. We’re seeing health care systems stabilize a bit more, we’re seeing China start to stabilize, and we see a second-half rebound in China. All of those are important tailwinds for a business like ours,” he said during an interview in Basel, Switzerland.

Novartis said in its statement it’s on track to spin off its generics unit Sandoz in the second half of the year as part of its effort to sharpen its focus on its patented prescription medicines.

Analysts say the share price has been supported by a programme unveiled in 2022 to trim costs and cut 8,000 jobs and plans announced later last year to focus on fewer therapy areas and drug technologies.

But the market has been underwhelmed by its prospects for medium-term growth from new drugs. Shares are down about 11% since January 2020, underperforming most of its rivals.

The market has been pinning hopes for future sales growth on wider use of breast cancer drug Kisqali and iptacopan, which is being tested against a rare genetic blood disorder, possibly challenging AstraZeneca‘s drugs Soliris and Ultomiris.

MS drug Kesimpta, requiring fewer injections than standard therapies, is expected to become Novartis’ second largest growth driver in 2023, after Entresto.

Asked by CNBC about the impact of the U.S. Inflation Reduction Act on medicines pricing, Narasimhan said the company’s guidance of mid-single digit growth and 40% plus margin for 2027 took the act into account.

“We’re fully prepared to offset the impacts of IRA. They are there, but we think we can offset them in the near-term,” he said. However, he said in the mid- to long-term the company would need to examine how the act would impact the medicines it develops.

“We think there are some distortions in this bill that don’t make sense, we hope we can get legislators to fix it, but that’s going to be a real focus in the U.S.”

On legislative changes and drug pricing rules potentially impacting the business in Europe, Narasimhan said: “We do see austerity measures coming in. We saw some problematic actions in the U.K., we see problematic actions in the continent itself.”

“We really need European governments to rededicate themselves to health care, investing in innovation, we need the European Commission to create a more pro-innovation environment,” he continued, adding that pushing for this would be another focus for the company this year.

CNBC’s Jenni Reid contributed to this report.