Novartis on track to deliver 2012 outlook
By the looks of Novartis’ second quarter profit results it is clear the healthcare company is well-positioned to continue delivering future growth. The Switzerland-based company’s earnings, excluding some costs, fell 6% to US $3.36 billion, or US $1.38 a share, from US $3.56 billion, or US $1.48 a share, a year ago. However, analysts had predicted profit of $1.33 a share, following a tough competition from generic drugs and looking at the strength of the dollar.
Novartis secured eight significant regulatory milestones in the second quarter, five in pharmaceuticals, including CHMP recommendations for Afinitor in advanced breast cancer, Jakavi in myelofibrosis and Seebri Breezhaler in COPD, and three achieved by Alcon, including AcrySof IQ ReSTOR +2.5D Toric Multifocal intraocular lenses in the EU.
However, sales in Diovan, Novartis’ top-selling high blood pressure drug, have recently been declining, due to its expired patent last year in Europe and the upcoming expiry date for its US patent set for September 2012. Novartis hopes to offset these declining profits with its new products, such as the multiple sclerosis pill, Gilenya.
“Novartis achieved eight significant regulatory milestones in the second quarter, including CHMP recommendation for Afinitor in advanced breast cancer, further enhancing our future growth prospects. Pharmaceuticals and Alcon delivered solid financial performance and operating leverage in the second quarter, underpinned by our continued focus on portfolio rejuvenation, with recently launched products now representing 29% of Group net sales compared to 25% last year.”
Joseph Jimenez, CEO of Novartis, comments on the results.
A strong momentum in innovation, continued execution on recently launched brands, and ongoing productivity enhancements are all expected to drive long-term growth. But like its rivals, Novartis is also facing pressures from government cuts on medicine prices in Europe.
Novartis: New Drugs Offset Generics Pressure (Wall Street Journal)
Novartis Profit Beats Estimates on New Drugs (Bloomberg Business Week)
Novartis press release (Reuters)
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