New products push up Novartis Q3 earnings
Basel-based pharmaceuticals giant Novartis on Tuesday said that strong sales of new products had helped push its net profit up 45 percent in the third quarter from the same period a year earlier, despite competition from copycat generic drugs.
For the July to September period, the Swiss company saw its net profit jump to $3.2 billion, while sales swelled four percent compared to the same quarter in 2013 to $14.7 billion.
The firm thus beat the expectations of analysts polled by the AWP financial news agency, who had expected to see sales of $14.4 billion for the quarter.
"Novartis delivered a very strong third quarter. We delivered solid sales growth with margin expansion," Novartis chief Joseph Jimenez said in the earnings statement.
Sales in the company's core pharmaceuticals division remained stable at $7.9 billion, despite new generic competition since July to its blockbuster blood-pressure drug Diovan from the Indian group Ranbaxy.
Novartis's growth products, including its leukaemia drug Tasigna and its MS drug Gilenya achieved $3.5 billion in sales, contributing 44 percent of division net sales up from 38 percent in the same period a year earlier.
The firm is in the midst of a massive restructuring in a bid to sharpen its focus on its high-grossing cancer sector and concentrate on three divisions: pharmaceuticals, generics and opthalmic pharmaceuticals.
In April, it announced several multi-billion-dollar deals with British GlaxoSmithKline and US group Eli Lilly.
In the biggest of the deals, Novartis moved to buy GSK's cancer treatment business, and in exchange sell its vaccines division, excluding flu vaccines, to the British company.
The two companies also plan to create a joint consumer healthcare business, while Novartis's animal health division is set to be sold to Eli Lilly.
And Novartis is wrapping up the shake-up, announcing Sunday plans to sell its flu vaccine unit to Australian CSL for $275 million, in a deal set to close during the second half of 2015.
The group confirmed its outlook for the year, eyeing sales growth in the low- to mid-single digits, while its group core operating income was seen growing faster, in the mid- to high-single digits.
Following the news, Novartis shares shot up 2.33 percent to 87.70 francs a piece in late morning trading, as the Swiss stock exchange's main SMI index rose 1.34 percent.