Thursday July 24 9:36 AM EDT
Novartis sales growth slows in second quarter
By Greg Calhoun
ZURICH, Switzerland (Reuter) - Swiss pharmaceuticals giant Novartis AG reported a 19 percent rise in first-half sales Thursday, but its second-quarter sales growth slipped.
First-half sales for the life sciences group, formed last year through the merger of Ciba-Geigy and Sandoz, totaled 16.56 billion Swiss francs ($11.2 billion) against 13.89 billion ($9.4 billion) for the
corresponding 1996 period.
The figures reflect a 6 percent local currency increase in the second quarter, down from 14 percent rise in the first three months of the year.
Although the overall sales performance was in line with expectations, industry analysts said lower-than-expected sales from the key drugs segment were disappointing.
``The overall figure of 7 percent shows a slowdown which was slightly disappointing for me,'' Union Bancaire Privee analyst Romain Pasche said. ``The source of the slowdown was mainly healthcare.''
For the first half, pharmaceutical sales totaled 6.93 billion francs ($4.7 billion), an increase of 23 percent in Swiss francs but just 10 percent in local currencies.
The comparison was not flattered by the particularly strong performance the first half of 1996, analysts said.
Bank Vontobel analyst Susanne Borer noted that local currency sales growth for Sandimmun and Neoral, the group's transplantation and auto-immune drugs, was only 5 percent in the first half, compared with 14 percent for the same 1996 period.
The company said in its statement that sales growth in pharmaceuticals was driven by dynamic performance in the United States, Europe and Spain. But sales in Japan and Germany were hurt by government measures to cut healthcare costs.
Sales of over-the-counter products, which were 4 percent lower, were damaged by poor European demand, especially in Germany due to new reimbursement regulations.
However, slower second-quarter growth in pharmaceuticals was partly offset by strong expansion of the group's nutrition business, which posted sales of 2.08 billion ($1.4 billion), representing a 19 percent Swiss franc rise and a 6 percent increase in local currencies.
Novartis said its infant and baby nutrition business was driven by an ``outstanding'' performance in Eastern Europe, Central and Latin America.
Additional news and quotes: Novartis AG - NVTSY. |
