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Novartis profit steady as vaccines, charges limit growth -- By Steve Goldstein, MarketWatch LONDON (MarketWatch) -- Novartis, the Swiss pharmaceutical giant, on Thursday said its third-quarter profit was virtually unchanged, as growing sales of cancer and hypertension medications were offset by charges and declining vaccine sales. Novartis /quotes/comstock/13*!nvs/quotes/nls/nvs (NVS 51.08, -0.81, -1.56%) /quotes/comstock/06p!novn (CH:NOVN 52.00, -0.40, -0.76%) said its profit rose to $2.1 billion from $2.09 billion, while sales rose 3% to $11.09 billion. Novartis' profit was limited by $189 million of charges made by companies it partly owns -- Roche /quotes/comstock/06p!rog (CH:ROG 161.10, 0.00, 0.00%) and Alcon /quotes/comstock/13*!acl/quotes/nls/acl (ACL 144.21, -2.41, -1.64%) -- as well as increased finance costs and a higher tax rate. Operating income rose 13% to $2.63 billion. |
October 26, 2009 |
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LONDON (MarketWatch) -- Novartis, the Swiss pharmaceutical giant, on Thursday said its third-quarter profit was virtually unchanged, as growing sales of cancer and hypertension medications were offset by charges and declining vaccine sales.
Novartis /quotes/comstock/13*!nvs/quotes/nls/nvs (NVS 51.08, -0.81, -1.56%) /quotes/comstock/06p!novn (CH:NOVN 52.00, -0.40, -0.76%) said its profit rose to $2.1 billion from $2.09 billion, while sales rose 3% to $11.09 billion.
Novartis' profit was limited by $189 million of charges made by companies it partly owns -- Roche /quotes/comstock/06p!rog (CH:ROG 161.10, 0.00, 0.00%) and Alcon /quotes/comstock/13*!acl/quotes/nls/acl (ACL 144.21, -2.41, -1.64%) -- as well as increased finance costs and a higher tax rate.
Operating income rose 13% to $2.63 billion.
All three measures were pretty much in line with consensus estimates. Novartis shares rose 1% in early trade.
"I am pleased with our strong underlying performance, led by the momentum of our pharmaceuticals business, outpacing the competition and benefiting from innovative product growth rejuvenating the portfolio," said Chairman and CEO Daniel Vasella.
Its main pharmaceutical division saw a 27% improvement in operating income, to $2.21 billion, as sales of its top drug, hypertension treatment Diovan, rose 1% to $1.46 billion. Another hypertension drug, Exforge, recorded a 49% improvement to $171 million.
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Cancer drugs Zometa and Femara contributed $664 million to its top line.
Vaccine and diagnostic sales dropped 18% after fewer H5N1 avian pandemic flu-vaccine sales and U.S price pressure on seasonal-flu vaccines. That led to an 87% slide in operating income.
The arm that makes generic drugs, Sandoz, saw its operating income edge 6% higher to $312 million, and the consumer health division that makes over-the-counter drugs saw a 4% improvement to $303 million.
The Basel firm grew more bullish on sales, now seeing high single-digit instead of mid-single-digit growth at constant currencies for the year. It expects record earnings for the year.
Separately, Belgium's UCB /quotes/comstock/24s!e:ucb (BE:UCB 30.40, +0.02, +0.07%) said its revenue over nine months fell due to generic competition for epilepsy medication Keppra in the U.S., which offset European growth for Keppra, growth of allergy rhinitis drug Xyzal in the U.S. and allergy drug Zyrtec in Japan.
UCB said prescription data for Cimzia were promising, as it had a 20% share for treating Crohn's disease and 2.9% for rheumatoid arthritis.
It still sees a profit above 2008's 550 million euros on sales between 3.1 billion and 3.3 billion euros.
Analysts polled by FactSet expected an annual profit of 556 million euros on revenue of 3.18 billion euros.
UCB shares fell 1.4% in Brussels.
Steve Goldstein is MarketWatch's London bureau chief.
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