Basel-based pharmaceutical group Novartis reported on Wednesday a net profit of $9.6 billion for 2012, up four percent from the previous year, but posted slightly lower sales amid stronger competition from generic drugs.

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The company, which also announced that its chairman of 17 years, Daniel Vasella, was leaving, said in a statement it had achieved net sales of $56.7 billion.
 
That was a three percent drop from 2011, but still narrowly beat the expectations of analysts polled by the AWP financial agency, who anticipated sales of $56.5 billion.

Novartis's important Pharma division, meanwhile, saw sales slip one percent to $32.1 billion dollars amid swelling competition from generic drugs.

The price of shares in Novartis surged by 2.5 percent to 61.60 francs a share in morning trading on a Swiss stock exchange up 0.66 percent.

Like the rest of the pharmaceutical industry, the company has also had to deal with growing pricing pressure at a time when crisis-hit countries are increasingly being forced to slash health expenditures.

Company chief executive Joseph Jimenez meanwhile insisted that "Novartis maintained strong momentum in innovation in 2012," pointing out that the Basel-based company had secured 17 major approvals in 2012.

"Our pipeline is expected to deliver a record number of near-term approvals and filings, and . . . we anticipate 14 products to reach blockbuster status by 2017, up from eight in 2012," he said.

For 2013, Novartis said it expected to see sales in line with last year in constant currencies, despite an impact of up to $3.5 billion from generic competition.

Novartis also announced that chairman Vasella had decided not to stand for re-election at the next annual meeting, on February 22nd.

Dr. Joerg Reinhardt, who currently heads Bayer HealthCare, has been put forward for the job, Novartis said, adding that he would take over on August 1st, and that vice-chairman Ulrich Lehner would lead the board in the interim.