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To: richardred who wrote (2063)	4/21/2008 3:48:44 AM
From: richardred	Respond to of 7242

Cost cutting boosts Novartis Q1 profit Monday April 21, 3:11 am ET By Sam Cage ZURICH (Reuters) - First-quarter net profit at Swiss drugmaker Novartis AG (VTX:NOVN.VX - News) rose 10 percent to $2.31 billion, helped by cost cuts and the weak dollar, easily beating forecasts and boosting shares 5.2 percent. Novartis, which is digesting a $39 billion deal to buy eye-care company Alcon Inc (NYSE:ACL - News), on Monday also confirmed its full-year forecast. "Compared to competitors' results we consider Novartis figures to be quite okay," DZ Bank analyst Thomas Maul said. "The second half of 2008 should offer some more upside." Europe's second-largest drugmaker by market value faces the same problems as many of its peers, with earnings growth expected to slow due to the loss of exclusivity on some of its drugs, pricing pressures and more complicated paths to market. But it benefited from dollar weakness and a cost-cutting program at its drugs unit in the first quarter, as well as a one-off gain of $115 million from the divestment of some mature products, and group sales beat forecasts with a 9 percent rise to $9.91 billion. Drug revenue was up 6 percent at $6.26 billion, despite generic competition to blood pressure tablet Lotrel and epilepsy medicine Trileptal. Drug sales fell 3 percent in local currencies -- Novartis's previous guidance was for a drop in the mid-single digit percentage range -- due to copy-cat generic competition and the withdrawal of Zelnorm in the United States. Novartis said late last year it would cut 2.5 percent of its workforce and aimed to save $1.6 billion to combat increased competition and tighter regulations, helping to boost profitability at its core pharmaceuticals unit in the first quarter. DRUG DEVELOPMENT The company reported mixed fortunes from its pipeline of new products, saying it did not expect to resubmit Galvus -- once seen as a major growth driver but which has suffered delays because of safety problems -- for U.S. approval until 2010. Zelnorm, an irritable bowel syndrome treatment that ran into concerns of a possible link to heart attack and strokes, will not be resubmitted for U.S. approval. But Novartis said its Extavia multiple sclerosis drug would be filed for U.S. approval soon and launches on both side of the Atlantic are seen in early 2009. The Basel-based drugmaker also expects to file its Menveo meningitis vaccine later this year. Novartis trades at about 11 times forecast 2009 earnings, according to Reuters data, a premium to other European large-cap drugmakers such as GlaxoSmithKline Plc (LSE:GSK.L - News) and Sanofi-Aventis SA (Paris:SASY.PA - News), due to its greater diversity and longer exclusivity on key products. But Novartis is cheaper than its local rival Roche Holding AG (VTX:ROG.VX - News), which has a 2009 multiple of 13, thanks to its promising new drugs and limited exposure to copy-cat generic competition. Novartis shares rose 5.2 percent to 50.85 Swiss francs by 0702 GMT. (Editing by Louise Ireland) biz.yahoo.com