Novartis Quarterly Profit Rose 70%, Missed Estimates
Net income rose to $1.5 billion, or 68 cents a share, from $904 million, or 40 cents, in the year-earlier period, the Basel, Switzerland-based company said in an e-mailed statement today. Sales grew to $10.1 billion. Profit from continuing operations fell short of analyst estimates.
Chief Executive Officer Daniel Vasella has cut jobs and reined in spending as Novartis prepares for the patent expiration on its hypertension drug Diovan. Europes fourth- largest drugmaker reduced its dependence on prescription medicines by developing its own generic treatments and vaccines and acquiring a stake in eye-care company Alcon Inc. last year.
“Weve seen a steady improvement in the growth of the pharma unit,” Andrew Weiss, an analyst at Bank Vontobel in Zurich, said in a telephone interview before the release. “The transition is over, and 2009 should be an interesting year.”
A year ago, earnings were held back by generic competition and product withdrawals. Sales of five products, including the Famvir herpes medicine and the irritable bowel treatment Zelnorm had fallen by almost half to $1.7 billion from 2006 after the medicines either faced generic competition or were pulled from the market.
Heart, Cancer Drugs
“Novartis anticipates another year of record results in 2009,” Vasella said in an e-mailed statement. Sales from continuing operations will probably rise at a mid-single-digit rate this year. Drug sales will likely grow at a mid-to-high- single-digit rate in local currencies, Novartis said today.
The companys experimental drug for multiple sclerosis fingolimod, a pill aimed at making treatment less painful for patients, is on track for submission to regulators at the end of 2009, Novartis said.
The Swiss drugmaker is preparing for generic competition in 2012 with a clutch of new drugs including several combination heart pills and the Afinitor cancer drug.
Rival Pfizer Inc.s $68 billion bid for Wyeth and its future plans of gaining market share overseas may cramp Novartiss plans to grow in countries such as Russia, China and Turkey, a market that may be worth $80 billion by 2012, according to Vontobels Weiss.
Profit from continuing operations last quarter was $1.51 billion, falling short of the $1.78 billion median estimate of seven analysts surveyed by Bloomberg News.
Novartis fell 1.1 francs, or 2.1 percent, to 51.45 Swiss francs at the close of trading in Zurich yesterday. The drugmakers shares fell 10 percent in 2008, making it the eight-worst-performing stock on the Bloomberg Europe Pharmaceutical Index.