Novartis Posts 23% Rise in Net [WSJ]
By ANITA GREIL
January 18, 2007 1:10 a.m.
ZURICH -- Swiss drug maker Novartis AG Thursday reported a 23% increase in fourth-quarter net profit, driven by strong sales growth in blood-pressure lowering drug Diovan and cancer pill Gleevec.
Novartis, based in Basel, Switzerland, said net profit rose to $1.66 billion in the three months ended Dec. 31 from $1.35 billion, which was below analysts' estimates of $1.78 billion partly due to costs related to the recall of contact lenses which pressured earnings at the consumer health division. Sales increased 16% to $10.05 billion from $8.66 billion, beating analysts' estimates, which had called for $9.66 billion.
Net profit rose more than sales thanks to the strong performance of profitable leading brands.
For the current year, Novartis expects "another year of record net sales and earnings." Novartis expects sales to rise at a mid-to-high single-digit pace in local currencies and expects sales at its pharmaceutical division, which sells prescription drugs, to advance at a mid-single digit rate in 2007.
Sales of prescription drugs rose 15% to $6.05 billion, with Diovan contributing $1.15 billion, Gleevec sales amounting to $702 million, and sales of blood-pressure lowering drug Lotrel coming in at $354 million.
With the takeover of U.S.-based Chiron last year, Novartis gained a foothold in the fast-growing vaccines business. Costs relating to the acquisition amounted to $107 million and to a large extent offset the benefits from higher sales of influenza vaccines in the U.S.
The Swiss company is also the only big pharmaceutical company with a sizable generics business, called Sandoz, for which it expects strong growth rates in the long run because governments and other health-care payers are increasingly encouraging these copycat medicines, which are typically much cheaper than branded products with patent protection.
In the fourth quarter, sales of generics were strong in Eastern Europe, Scandinavia, Canada, Switzerland and Australia. In Germany, where price competition among generics makers is fierce, volume gains offset price cuts, Novartis said.
Late last year, Novartis agreed to sell its medical nutrition business to Nestle AG, the Swiss food company. The sold operations had annual sales of $989 million.
online.wsj.com |
