Novartis First-quarter Revenue Beats Estimates; Shares Increase
Net income dropped 15 percent to $1.96 billion, or 87 cents a share, hurt by the dollars strength against the euro and emerging-market currencies, the Basel, Switzerland-based company said in a statement today. Analysts predicted $1.89 billion, the median of seven estimates compiled by Bloomberg News.
Increased revenue from the hypertension drug Diovan and the cancer treatment Gleevec countered some of the effect from currency shifts. Chief Executive Officer Daniel Vasella confirmed the companys forecast and said 2009 profit may fall because of the higher dollar.
“The profit was significantly better than expected, despite negative currency effects,” Karl-Heinz Koch, an analyst at Helvea SA, said in a telephone interview today. “The profit contribution from pharma especially and the generics unit Sandoz were higher than forecast, compensating for a lower performances in the consumer and vaccine divisions.”
Sales fell 2 percent to $9.71 billion. The company earned $2.32 billion, or $1.02, in last years first quarter, helped by a one-time gain of $115 million from a product divestment and an inventory adjustment of $45 million.
Novartis, which will lose patent protection starting in 2012 on its two biggest-selling products, Diovan and Gleevec, sees future growth fueled by sales of its Afinitor cancer pill and the Menveo meningitis vaccine. The company also is counting on expansion in emerging markets and renewed growth in the U.S. generics and over-the-counter units.
Share Rally
Novartis gained 1.62 Swiss francs, or 3.9 percent, to 43.22 Swiss francs at 9:35 a.m. in Zurich trading. The stock rose as much as 4.4 percent, the biggest intraday advance since March 12. The shares fell 18 percent in the first quarter, making it the second-worst-performing stock on the Bloomberg Europe Pharmaceutical Index.
Profit may drop this year if exchange rates remain where they are, Novartis said. The company aims to “again deliver record underlying net sales and earnings excluding currency effects,” Vasella said in the statement.
Sales at the drug unit rose 3 percent to $6.43 billion. A clutch of new products, including the hypertension drug Exforge and the cancer treatment Tasigna, added $872 million in revenue.
Vaccines, Generics
Revenue from vaccines slipped 12 percent to $247 million, mainly because of lower sales of tick-borne encephalitis shots. Sales at the generic drug unit Sandoz fell 9 percent to $1.73 billion, while consumer health lost 11 percent to $1.3 billion.
Carrying costs for bonds issued in February and lower income from Novartiss stake in Swiss rival Roche Holding AG hurt profit further, the company said. Novartis earned $83 million from eye-care company Alcon Inc. and Roche this quarter, down from $137 million a year earlier. Interest expense rose to $86 million from $57 million, the company said.
Sales from continuing operations will probably rise at a mid-single-digit percentage rate this year. Drug sales will likely grow at a mid-to-high-single-digit rate in local currencies, Novartis repeated.
Nyc Takes Lead In Setting Next Nourishment Target _ Salt
About three-quarters of the salt Americans eat comes from prepared and processed food, not from the salt shaker. Thats why New York officials want the food industry to help cut back.
“Its very hard for an individual to do this on their own,” said Dr. Lynn Silver, an assistant commissioner in the health department.
The department has shown its clout with bans on artificial trans fats and rules forcing chain restaurants to post calorie counts. To comply, fast food chains changed their recipes nationwide, and other cities and states have enacted similar policies.
Some manufacturers said getting rid of trans fats took work, and reducing salt has its own difficulties.
Unlike sugar, theres no substitute for salt. Cream soups – like that casserole favorite cream of mushroom – are the biggest challenge, said George Dowdie, head of research and development for Campbell Soup Co. The soup maker, which has been cutting salt for years, is in the talks with New York.
By fall, Campbell Soup plans to have more than 90 lower-sodium soups available. That includes its first soup, tomato, which will have almost a third less salt.
The industry hopes salt reduction remains voluntary.
“Literally freight cars full of salt have been removed from these products gradually over time,” said Robert Earl, vice president of science policy, nutrition and health for the Grocery Manufacturers Association. “It has to be done carefully – gradually and incremental over time.”
Herbert Smith Jr. never paid much attention to how much salt was in food until he developed high blood pressure. His doctor at a Harlem health center put him on medication and told him to exercise and watch his diet.
The 54-year-old church receptionist said he was alarmed to see how much salt was in the instant soup packages that he liked. He wants the food industry to cut down.
“For those who want to use salt, they can add it themselves,” he said.
Too much salt raises blood pressure, and high blood pressure raises the risk of heart disease. A recent analysis showed that for every gram of salt cut, as many as 250,000 cases of heart disease and 200,000 deaths could be prevented over a decade.
For its salt initiative, New York has recruited public health agencies and medical groups across the country. The campaign – with a goal of cutting salt intake by at least 20 percent in five years – is modeled on a plan carried out in Britain. That effort set voluntary salt reduction targets for 85 categories of processed foods.
“Companies have been very innovative,” said Corinne Vaughan, of Britains Food Standards Agency. “And they have been very good at making what are quite huge reductions in salt levels.”
Salt in pasta sauces has been cut by nearly a third, and soups by about one-quarter, she said. Some foods have been more challenging, she said, citing bacon, cheeses and packaged bread. With less salt, the dough is sticky and harder to process, she said. Salt is used mostly for flavoring but can also help preserve some foods and gives others texture.
Some British companies have also put “traffic light” labels on package fronts – green for low-salt, for example – so shoppers can “make a choice at a glance,” Vaughan said.
Everyone needs some salt – or sodium chloride – for good health. The daily recommended amount for Americans is about a teaspoon, or 2,300 milligrams of sodium. But many people consume twice that amount. A Big Mac alone has 1,040 milligrams.
Delayed Glaxo Cancer-vaccine Study Raises Eyebrows, Tests Merck
Sales for Glaxos Cervarix amount to less than 10 percent of those garnered by Mercks similar vaccine. The comparison study may influence which vaccine doctors use and insurers pay for. It will be presented for the first time at a medical meeting in Malmoe, Sweden on May 10, according to a draft of the program obtained by Bloomberg News.
The study also will help governments determine which of the vaccines to select for immunizing women, influencing a global market that Glaxo estimated at more than $10 billion last year. Glaxos shot, used less often than Gardasil in Europe, hasnt won approval in the U.S., where Merck began selling its version three years ago.
Glaxos decision to wait 14 months to release the data and pick a little-known medical meeting as the venue “certainly has both my eyebrows up,” said Arthur Caplan, director of the University of Pennsylvanias Center for Bioethics, in Philadelphia.
“Half the world is waiting to see which vaccine is the better one,” Caplan said. “You have a huge ethical obligation to get information out quickly. Im never a fan of releasing key findings on a highly contentious issue, such as whos got the better vaccine, at a relatively unknown meeting.”
The study concluded in March 2008, according to its listing on the U.S. government database that tracks clinical trials.
Two Studies
Cervarix and Gardasil protect women against the sexually transmitted human papillomavirus. The virus can lead to cervical cancer, which kills 250,000 women each year.
Stephen Rea, a spokesman for Glaxo in London, said the company chose the International Papillomavirus conference in Malmoe because its “internationally renowned and has a reputation for scientific rigor.”
Glaxo also plans to release another key Cervarix study, known as HPV-008, which tracks the effect of the vaccine on more than 18,600 women, at the meeting. U.S. regulators will use the findings to determine whether to clear the shot later this year. The company wanted to present the two studies “as a package,” Rea said. “Attendees will be able to see presentations on the efficacy study and the head-to-head study” together, he said.
Glaxo needs Cervarix to help offset cheaper generics that eroded U.S. sales of four medicines last year. The London-based company reports first-quarter earnings later today. Profit fell in the fourth quarter.
Long Delay
Glaxos head-to-head study, dubbed HPV-010, measures which vaccine sparked a greater immune system response in more than 1,000 women seven months after the shot.
That means the results wont say which product works best to keep cancer at bay, though its the first indication of the bodys ability to defend itself, said Aaron S. Kesselheim, an expert in pharmaceutical epidemiology and economics at Harvard Medical School and Brigham and Womens Hospital in Boston. As such, it will help governments decide which product to pick, Caplan said.
“I cant explain the long delay,” Kesselheim said. “If you have positive results, wouldnt you want to get it out? If its negative, people should know that soon. Its concerning to me that the turnaround time for getting the data out there is so slow.”
Spitzer Settlement
Glaxo may have taken longer to analyze the research to see whether women were protected against other strains of the virus than the ones contained in the shot, according to Nick Turner, an analyst at Mirabaud Securities in London.
Glaxo has won exclusive contracts to provide Cervarix to young girls and women in the Netherlands and the U.K. since the study was completed. A spokesman at the U.K. Department of Health did not return calls seeking comment. Saskia Hommes, a spokeswoman for the Dutch Ministry of Health, said Cervarix was “cost effective.”
Glaxo, Europes fifth-largest drugmaker, has come under fire before for not promptly disclosing study results. When the company found that its Avandia diabetes medicine raised the risk of heart attacks in 2005, it submitted the findings to regulators and posted them on its Web site. It didnt notify doctors or patients.
Swine Flu Cases In Calif. Worry Health Officials
U.S. Centers for Disease Control and Prevention officials said theres no reason for the public to take unusual measures against it.
“CDC is concerned, but thats our job,” said CDC spokesman Tom Skinner.
Health officials have long feared the emergence of a deadly form of flu. They have not noted a spike in flu cases or a rash of severe illnesses. But they are continuing to investigate the genetics of the virus and track down and test people who may have been in contact with the children.
Both children became sick in late March and experienced fever and cough. The boy also vomited.
The two had not been in contact with each other, CDC officials said.
The boys mother and brother also had a flu-like illness recently, as did a brother and a cousin of the girl. None of those relatives were tested for flu at the time of their illness.
The San Diego County boy and his 8-year-old brother flew from California to Dallas in early April and are currently with relatives in Texas. Health officials also are trying to contact the planes flight crew and two children who sat near the boys, CDC officials said.
In the past, CDC received reports of approximately one human swine influenza virus infection every one or two years. But more than a dozen cases of human infection with swine influenza have been reported since late 2005.
Most cases occur in people who were exposed to pigs. Neither child had touched a pig, according to their families, although the girl had been at an Imperial County agricultural fair four weeks before she got sick.
The jump in cases in the past few years could be because of technological improvements and expansion of public health laboratories, which have improved testing capacity. But genetic mutations could also play a role.
The new flu contains a unique combination of gene segments that have not been seen in swine or human flu viruses before, CDC officials said.
The same virus has not been detected in any California pigs. “But we dont test every pig for influenza, so we dont know all the strains that are circulating,” said Dr. Gil Chavez, Californias state epidemiologist.
Health officials think the current seasonal flu vaccine may not protect against it.
Swine flu is an infamous disease in public health circles. In 1976, health officials were frightened by unusual cases of swine flu in soldiers at Fort Dix, N.J. The virus appeared to be similar to a deadly flu that killed millions around the world in 1918 and 1919.
Federal officials vaccinated 40 million Americans during a national campaign. The pandemic never materialized, but thousands who got the shots filed injury claims, saying they suffered a paralyzing condition and other side effects from the vaccinations.
The government is more sophisticated now in how it diagnoses and tracks diseases, said Dr. Lyn Finelli, a CDC epidemiologist.
Cancer Research Projects May Grow 25 Points From Federal Funds
More projects will be approved because the National Cancer Institute received a 2.9 percent budget increase to $5 billion for fiscal 2009, and $1.3 billion for 2009 and 2010 from the economic stimulus package, said John Niederhuber, the institutes director. The new grants will help universities recruit faculty and fill research jobs frozen in recent years.
The rise in research grants follows four years of a flat- lined budget for the cancer institute, which is one of 27 agencies within the National Institutes of Health in Bethesda, Maryland, Niederhuber said. Even with a flat budget, inflation meant cancer-research funding lost ground every year, he said.
“Economic stimulus funds give us the chance to be visionary,” said Niederhuber in remarks at the annual meeting of the American Association for Cancer Research in Denver. Priorities will be to expand cancer genomics mapping, develop personalized medical care and translate tumor genetics discoveries into new drug targets, he said.
The expanded funding “allows scientists to spend more of their time doing science,” said Michael Seiden, president and chief executive of Fox Chase Cancer Center in Philadelphia, in a telephone interview today. Seiden added that funding up to 30 percent more grants means researchers wont need “to rewrite their grant two or three times” to attract funding.
The National Cancer Institute receives about 7,000 grant applications every year, and last year funded about 20 percent, or 1,400 of them. Starting this year, the payline, or cutoff between funded and unfunded grants, will be lowered to give money to more worthy ideas, the agency said.
Wyeth Must Face Womans Prempro Lawsuit, Appeals Court Rules
The state appeals court in Houston said on April 14 that Susan Brockerts “failure-to-warn” claims arent preempted by federal drug-labeling regulations, overturning a district judges finding from February 2007. The case was sent back to the lower court for further proceedings.
The appeals panel cited last months U.S. Supreme Court decision upholding a $7 million award to a musician who lost her arm after being injected with Wyeths Phenergan nausea treatment. The high court said patients can sue drugmakers for failing to provide adequate safety warnings, even when a treatment and its packaging are approved by the U.S. Food and Drug Administration.
“Susan Brockert is thrilled with this decision,” her attorney, Erik Walker, said in an interview. Related lawsuits over Prempro that had been on hold pending the decision will now move forward, he said.
Wyeth, based in Madison, New Jersey, is the target of about 5,000 lawsuits over its menopause drugs Prempro and Premarin. As many as 6 million women took the hormone-replacement therapies to ease menopause symptoms, such as hot flashes and mood swings, before a 2002 study turned up cancer links.
Wyeths main argument for throwing out the case was a preamble added to FDA labeling rules in January 2006, which it said bars patients from suing drugmakers over failure-to-warn claims in state court.
Defect Claim
“Following the U.S. Supreme Courts decision in Wyeth v. Levine and based on the record that was before the trial court, Wyeth decided to withdraw that argument,” company spokesman Doug Petkus said yesterday. “The Brockert courts decision on that topic was therefore not unexpected.”
The company was pleased that the court affirmed the dismissal of Brockerts separate design-defect claim, he said.
Wyeth agreed on Jan. 26 to sell itself to New York-based Pfizer in a deal valued at about $64 billion.
Wyeth fell 56 cents, or 1.3 percent, to $42.64 in New York Stock Exchange composite trading yesterday. The stock has climbed 14 percent this year.
The lower court case is Brockert v. Wyeth, 200349357, Harris County District Court, Houston.
Smokers Urine May Give Cancer Alert Early Enough to Save Lungs
High levels of these chemical byproducts of tobacco smoke in the urine were linked to lung-cancer rates as much as 8.5 times higher than those of other smokers, said Jian-Min Yuan, the study leader and an associate professor of public health at the University of Minnesota in Minneapolis. He spoke in Denver today at the American Association for Cancer Research meeting.
Lung tumors are the most lethal form of cancer in the U.S., spurring 161,840 deaths and 215,020 new cases in 2008, according to the American Cancer Society, based in Atlanta. While there are about 60 possible carcinogens in tobacco smoke, pinpointing byproducts, or metabolites, that may spur the malignancies may help prevention, Yuan said.
“If we can identify a smoker with a high level of metabolites, and down the road they have a higher risk of lung cancer, public health workers can get them motivated to quit smoking,” Yuan said in an April 16 telephone interview. “If they cant quit, we can do more intensive screening to find very small lung cancers that can be treated.”
Yuan analyzed varying levels of metabolites in the urine of about 500 smokers drawn from the Shanghai Cohort Study and the Singapore Chinese Health Study, funded by the U.S. National Cancer Institute in Bethesda, Maryland. Dividing smokers into those having high, medium and low levels of the two chemicals, the researchers followed lung cancer diagnoses for 10 years.
Risk Factors
Smokers with high levels of a byproduct called NNAL — a known carcinogen in lab animals — had twice the risk of getting lung cancer compared with smokers who had low levels.
People with high urine levels of cotinine, a nicotine byproduct, had three times the risk of those with low levels. Smokers with high levels of both NNAL and cotinine were 8.5 times more likely to get lung cancer than comparable smokers who had low levels of both chemicals.
The two chemicals appeared to be independent risk factors for lung cancer, even after adjusting for daily pack usage and the number of years of smoking reported by study participants, Yuan said.
The urine test isnt available for use by doctors, Yuan said. He predicted it will take three to five years to validate the test in ethnic groups around the world, refine the technology, and add other chemical carcinogens such as polycyclic aromatic hydrocarbons to the test panel.
Unanswered Questions
How and why the chemical levels excreted in urine flag cancer vulnerability arent known, Yuan said. “We are thinking smokers uptake of the tobacco carcinogens is different,” he explained. “Metabolic systems between smokers are different.”
Margaret K. Offermann, deputy national vice president for research at the cancer society, said identifying patients with the chemical markers in their urine might help in “raising the red flag” in doctors offices.
“One can read the riot act to smokers that theyre at risk,” said Offermann, who wasnt involved in the study. “I wouldnt use lower levels to reassure people its OK to puff away.”
Diabetes? Some Beat It, But Are They Cured?
“I didnt have that sense of urgency,” said the Pasadena, Md., woman.
But nine months later, doctors told Wagner her condition had worsened. She, too, now had Type 2 diabetes.
That scared her into action.
Now, two years later, the 55-year-old woman has slimmed down. She exercises regularly and her blood sugar levels are back in the healthy, normal range. Thanks to her success, she was able to avoid diabetes medication.
Diabetics like Wagner who manage to turn things around, getting their blood sugar under control – either escaping the need for drugs or improving enough to quit taking them – are drawing keen interest from the medical community.
This summer an American Diabetes Association task force will focus on this group of patients and whether they can be considered “cured.” Among the points of interest:
-What blood sugar range qualifies as a cure and how long would it have to be maintained?
-How might blood pressure and cholesterol, both linked to diabetes, figure into the equation?
-And what if a “cured” diabetics blood sugar soars again?
“For right now, were not saying theyre cured, but the bottom line is … good glucose control, less infections,” said Sue McLaughlin, president of health care and education for the American Diabetes Association. The organization has no estimate of how many people fall into that category.
Being overweight is the leading risk for Type 2 diabetes. Genetics also plays a role, and blacks, Hispanics and American Indians are at greater risk than whites.
Nearly 57 million Americans are prediabetic. Another 18 million have been diagnosed with diabetes, while the diabetes association estimates almost 6 million more Americans have diabetes and dont know it. About 90 to 95 percent of diabetics have Type 2, the kind linked to obesity.
But the news isnt all bad. Thirty minutes of daily exercise and a 5 to 10 percent loss in body weight can lower the odds of diabetes by nearly 60 percent and is more effective than medicine in delaying its onset, according to a diabetes prevention study.
Still, such lifestyle changes are often difficult.
“It sounds like such a nonmedical recommendation, and yet its the thing people say is the toughest to implement,” said McLaughlin, the diabetes association official.
For Wagner, it meant changing not just her diet, but her lifestyle. A teacher, she now cooks most of her meals at home and avoids the sweets in the school lounge. She also tries not to stay late at work, using the extra time to exercise and make healthy meals.
Alice Stern describes a similar journey back to health since her diabetes diagnosis in 2007. The 50-year-old Boston woman was able to avoid diabetes drugs through diet and exercise, managing to trim 40 pounds off her 5-foot-2 frame.
Merck, Biogen Growth Lobbying to Defy Obamas Drug Comparisons
Already the biggest spender on influencing policy, the drug industry is hiring well-known individuals, some with stories of personal battles against disease. They include Tony Coelho, a former House Democratic leader who has epilepsy; Andrea LaRue, counsel to Tom Daschle when he was Senate Democratic leader; and the firm of Democratic fundraiser Tony Podesta, brother of Obama adviser John Podesta.
The firepower shows the drug industrys resolve to stop Obama from using comparisons of medical treatments to force cuts in health costs. More than half of medical care may be based on insufficient evidence of effectiveness, the Congressional Budget Office said in March. Meantime, the Health and Human Services Department says all medical spending will probably rise this year to $2.5 trillion, or 18 percent of the economy.
“The companies fear that older generic drugs might very well turn out to be better than the newer advertised drugs, which bring in much more of a profit,” said Julian Zelizer, a history and public affairs professor at Princeton University in Princeton, New Jersey. “In difficult economic times, the drug companies dont want to take any risks, so they are bringing out the biggest lobbyists in the business.”
Lobbying vs. Studying
The economic stimulus package includes $1.1 billion for studies showing which medical treatments work best — less than the $1.6 billion the drug industry spent on lobbying from 1998 to 2008, according to the Center for Responsive Politics, a Washington-based research group.
Drug companies “are concerned that there is a potential to come down with pronouncements about what should and shouldnt be covered,” said Jane Horvath, senior director for public policy at Merck, based in Whitehouse Station, New Jersey.
Opponents cite the U.K.s National Institute for Health and Clinical Excellence, or NICE, which looks at the cost and benefit of medical treatments in deciding what should be covered by national health insurance. The agency said March 5 that Tykerb, sold by GlaxoSmithKline Plc of London, is too expensive for routine use in women with advanced breast cancer. Given with chemotherapy, Tykerb costs about $35,000 a year for each patient, the agency said.
Insurers Push Back
Indianapolis-based WellPoint Inc., the second-largest health insurer by revenue, and Philadelphia-based Cigna Corp. are backing Obama with a lobbying push of their own through their Washington-based organization, Americas Health Insurance Plans.
“We need more information about which drugs, treatments and technology are more effective and we need to put that information in the hands of consumers and providers,” said Robert Zirkelbach, a spokesman for the trade group. “That will go a long way to improve the quality of care and bring down health-care costs across the board.”
The drug industry outspent all others in the last decade for lobbying. Health insurers, which back Obama in support of comparative effectiveness, spent $246 million from 1998 to 2008.
Drugmaker Victory
Drugmakers notched an early victory this year against comparative effectiveness. The $787 billion economic stimulus law, signed by Obama in February, dropped cost as a consideration in comparative effectiveness studies.
Merck and Schering-Plough Corp.s cholesterol pill Vytorin may face tougher competition from generic simvastatin if federally funded studies show it no more effective at unclogging arteries. Vytorin prescriptions dropped by a third last year after a study found the pill, a combination of simvastatin and Kenilworth, New Jersey-based Schering-Ploughs Zetia, worked no better than the generic pill alone. Vytorin costs about four times as much as simvastatin.
Obama said during the presidential campaign that studying medical treatments side by side is essential to saving money for expanded health coverage.
The presidents Federal Coordinating Council for Comparative Effectiveness Research, formed last month, includes Ezekiel Emanuel, brother of White House Chief of Staff Rahm Emanuel, to oversee the studies. The councils first report to Obama and Congress, containing recommendations of what treatments should be studied, is due June 30.
Advancing Cost?
“We need to compare whether some of these new ideas are really advances or more costly alternatives to what we know will work,” said Henry Waxman, a California Democrat and chairman of the House Energy and Commerce Committee, in an interview.
Twin Reno Girls Treated For Rare Disease
Addi and Cassi Hempel of Reno were admitted to Renown Regional Medical Center on Monday to get the experimental treatment for Niemann-Pick Type C disease.
The FDA recently cleared them for intravenous infusions of the drug cyclodextrin, a sugar compound that has been successful in laboratory studies.
The girls were diagnosed in October 2007 with NP-C. Theres currently no known cure for the disease, which also is referred to as childhood Alzheimers.
It causes cholesterol to build up and get trapped inside the cells, which leads to debilitating neurological and physical problems.
The process eventually slows down cells and leads to cell death. Most patients with NP-C dont live past their teens, according to the National Niemann-Pick Disease Foundation.
The girls parents, Hugh and Chris Hempel, said theyre optimistic about the use of cyclodextrin – an additive in cholesterol-free foods that studies show also might help combat the HIV virus.
“Im fairly confident, but the question is about the dosing. Theyre getting half the recommended dose,” Hugh Hempel told the Reno Gazette-Journal.
“The FDA asked us to start slowly. So, there will be proving to the FDA that its safe,” he said.
Dr. Ron Browne of Sun Valley, Idaho has been a liaison between the FDA and some families with children living with NP-C. He said the Hempels got approved for cyclodextrin through the FDA “compassionate use” program. Their condition will be evaluated every few weeks.
“The FDA is usually cautious,” Browne said. “There needs to be life-threatening situations where no other option is available.”
The girls, who wear diapers, began losing their ability to speak several months ago, Chris Hempel said.
“They used to be able to sing nursery rhymes and say their names but theyve regressed, like any neurological condition,” Chris Hempel said. “We can understand what they want, and theyre still taking in what were saying.”
“You have to be positive when you have kids in this situation,” she said.
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Information from: Reno Gazette-Journal, http://www.rgj.com