New drug sales help boost Novartis Q1 profit (Update)

April 24, 2014 by John Heilprin
The Aug. 12, 2005 file photo shows the logo of Swiss company Novartis in Basel, Switzerland. Swiss pharmaceutical giant Novartis AG announced a series of multibillion-dollar deals Tuesday, April 22, 2014 with other major pharmaceutical companies that it said would reduce sales but boost profitability, while affecting some 15,000 of its employees globally. (AP Photo/Keystone, Steffen Schmidt)

Strong new drug sales and higher operating income helped Swiss pharmaceutical firm Novartis AG report a 24 percent rise in first-quarter profit.

The company said Thursday that its net profit of nearly $2.97 billion, up from $2.42 billion in the same period last year, was helped by sales growth from some of its newest product launches, such as Gilenya for multiple sclerosis and Afinitor for cancer, and higher operating income.

The company based in Basel, Switzerland, has been counting on these new drugs to offset patent expirations, such as its blockbuster heart drug Diovan which lost U.S. protection in 2012.

Also helping was a $900 million pretax gain from selling part of its diagnostics business to the Spanish health care company Grifols SA for $1.68 billion in November.

The company noted that the strong new drug sales were reinforced by asthma treatment Xolair gaining approval in the European Union and United States and meningitis B vaccine Bexsero being recommended in the U.K. and gaining new designation in the U.S. Growth in emerging markets, particularly China, also helped.

"Novartis delivered a solid quarter, with all divisions contributing to growth," CEO Joseph Jimenez said.

The Jan. 29, 2014 file photo shows Novartis CEO Joseph Jimenez as he arrives for the annual balance press conference in Basel, Switzerland. Swiss pharmaceutical giant Novartis AG announced a series of multibillion-dollar deals Tuesday, April 22, 2014 with other major pharmaceutical companies that it said would reduce sales but boost profitability, while affecting some 15,000 of its employees globally. (AP Photo/Keystone, Steffen Schmidt)

But the company's overall sales rose only 1 percent, to $14.02 billion, in large part due to pressure that some of its drugs, such as Afinitor for cancer and Glivec for leukemia, face from competition by generic suppliers.

Jimenez emphasized that the major overhaul of its business that Novartis launched Tuesday—a series of "transformational" multibillion-dollar deals with Britain's GlaxoSmithKline PLC and Eli Lilly & Co. of the United States—would "position the company for future success based on our sharpened focus, innovation power and financial strength."

Novartis shares dropped 1.9 percent to close at 74.80 Swiss francs Thursday, after rising by 3 percent in the wake of Tuesday's announcement.

Explore further: Novartis posts profit gain thanks to new drugs (Update)

Related Stories

Swiss pharma Novartis ups full-year sales outlook (Update)

October 22, 2013

Swiss pharmaceutical giant Novartis AG raised its full-year sales outlook because of delays in generic competition to its blockbuster blood pressure drug Diovan, even though it said negative currency trends contributed to ...

Novartis Q4 net profit rises to $2.0 billion

January 29, 2014

Swiss drug maker Novartis AG reported a 2 percent rise in fourth-quarter net profit Wednesday, helped by delays in generic competition to its blockbuster drugs.

Eli Lilly to buy part of Novartis for $5.4 bn

April 22, 2014

US pharmaceutical giant Eli Lilly said Tuesday it has reached an agreement to acquire the animal health division of Novartis of Switzerland for $5.4 billion (3.9 billion euros).

Novartis reshapes business with GSK, Lilly deals (Update)

April 22, 2014

Swiss pharmaceutical firm Novartis AG launched a major overhaul of its business Tuesday, unveiling a series of multibillion-dollar deals with Britain's GlaxoSmithKline PLC and the U.S.'s Eli Lilly & Co. that heralds more ...

Recommended for you

Sustaining biomedical research: Med school deans speak out

May 27, 2015

Cuts in federal support and unreliable funding streams are creating a hostile work environment for scientists, jeopardizing the future of research efforts and ultimately clinical medicine, according to leaders of the nation's ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.