Novartis lifts sales outlook despite Q2 profit dip

by John Heilprin
This Oct. 25, 2011 file photo shows the logo of Swiss pharmaceutical company Novartis AG on one of their buildings in Basel, Switzerland. Swiss pharmaceutical company Novartis AG raised its sales outlook for the full year on Wednesday July 17, 2013 , despite posting a 5 percent net income drop in the second quarter. The Basel-based company said it expects full-year sales to grow at a rate in the low single-digits, boosted by delays in generic competition against its blockbuster Diovan. In April, the company had said in its first-quarter results that it expected sales to be in line with last year's. (AP Photo/Keystone, Georgios Kefalas, File).

(AP)—Swiss pharmaceutical company Novartis AG raised its sales outlook for the full year on Wednesday, despite posting a 5 percent net income drop in the second quarter.

The Basel-based company said it expects full-year sales to grow at a rate in the low single-digits, boosted by delays in generic competition against its blockbuster Diovan. In April, the company said in its first-quarter results that it expected sales to be in line with last years.

Diovan, which is generically known as Valsartan, is a treatment for high blood pressure which lost U.S. patent protection last year. Novartis has been counting on new product launches, such as Gilenya for multiple sclerosis and Afinitor for cancer, to offset patent expirations. A key one is blockbuster leukemia drug Gleevec, which is to begin losing U.S. patent protection in 2015.

Meantime, the company's board of directors announced that its outgoing board chairman, Daniel Vasella, would receive $5.2 million in cash and unrestricted shares plus a guaranteed minimum fee of $250,000 a year from 2014 through 2016, just to be available for consulting and coaching. He'll be paid a consulting rate of $25,000 a day.

Vasella's departure touched off widespread anger in Switzerland—and led to a national debate over executives' pay—for the huge $77 million severance package he was offered. He later declined to accept it because of the Swiss public's outcry.

Shares in Novartis closed down 0.43 percent at 68.80 Swiss francs on the Zurich exchange Wednesday.

Novartis said in its financial results that quarterly net income fell to $2.548 billion, down from $2.675 billion in the comparable period a year ago. The company pointed to loss of patents, pricing pressure and the weakening Japanese yen as factors, though it said the currency impact "represents a larger proportion of operating income than sales."

Joseph Jimenez, CEO of Novartis, said the company delivered a solid second quarter, with sales of Gilenya a particular highlight.

"Despite having new competition in that space, Gilenya was up 66 percent versus a year ago," he told reporters. "There are many emerging markets where products that have already generic competition are still growing, because of the strength of those brands, and because of the high quality of those medicines."

not rated yet
add to favorites email to friend print save as pdf

Related Stories

New drugs shore up Novartis in Q2

Jul 19, 2012

(AP) — Swiss pharmaceutical company Novartis AG reported a net profit of $2.73 billion during the second quarter, as new drugs and acquisitions offset patent expirations, lower sales of generic medicines ...

Novartis chief sees sales dip until mid-2013

Oct 07, 2012

Swiss pharmaceutical giant Novartis said Sunday the expiry of a US patent for its leading hypertension drug Diovan caused a drop in turnover that could last into the first half of 2013.

Novartis Q4 net profit rebounds to $2.1 billion

Jan 23, 2013

(AP)—Swiss drug maker Novartis AG reported a jump in fourth-quarter net profit to $2.08 billion on Wednesday, citing the lack of a $900-million one-time charge it took in the same period the previous year.

Novartis announces 2,000 job losses, profits up

Oct 25, 2011

Swiss pharmaceutical giant Novartis announced 2,000 job losses Tuesday, mostly in Switzerland and the United States, while reporting net profits of $3.53 billion (2.5 billion euros) for the third quarter.

Recommended for you

Humiliation tops list of mistreatment toward med students

1 minute ago

Each year thousands of students enroll in medical schools across the country. But just how many feel they've been disrespected, publicly humiliated, ridiculed or even harassed by their superiors at some point during their ...

Surrogate offers clues into man with 16 babies

8 hours ago

When the young Thai woman saw an online ad seeking surrogate mothers, it seemed like a life-altering deal: $10,000 to help a foreign couple that wanted a child but couldn't conceive.

Nurses go on strike in Ebola-hit Liberia

8 hours ago

Nurses at Liberia's largest hospital went on strike on Monday, demanding better pay and equipment to protect them against a deadly Ebola epidemic which has killed hundreds in the west African nation.

ALS Ice Bucket Challenge arrives in North Korea

Aug 31, 2014

It's pretty hard to find a novel way to do the ALS Ice Bucket Challenge by now, but two-time Grammy-winning rapper Pras Michel, a founding member of the Fugees, has done it—getting his dousing in the center ...

Cold cash just keeps washing in from ALS challenge

Aug 28, 2014

In the couple of hours it took an official from the ALS Association to return a reporter's call for comment, the group's ubiquitous "ice bucket challenge" had brought in a few million more dollars.

User comments