Novartis International AG has posted marginal growth in profits as well as sales during the second quarter ended June 2014 due to lower sales of Diovan in Japan and US. Its net profit moved up by 3 per cent to $3,283 million from $ 3,188 million in the similar period of last year. Its net sales improved marginally by 2 per cent to $14,637 million from $14,637 million. EPS worked out to $1.24 as against $1.29 in the last period.
The major products like Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, the COPD portfolio and Jakavi contributed 42 per cent of of pharmaceutical division sales as compared to 36 per cent in the last period. Sales growth was impacted by Japan, which saw a continued decline in Diovan sales and biennial price cut for many brands. US sales of Diovan impacted due to inventory destocking ahead of the generic entry in July 2014.
Alcon net sales improved 3 per cent in second quarter ended June 2014 due to growth in ophthalmic pharmaceuticals and surgical, coupled with strong emerging growth markets performance. The sales of Sandoz division increased by 19 per cent to $ 2.3 billion, as volume growth of 11 percentage points more than compensated for u percentage points of price erosion. However, Asia (excluding Japan) delivered double-digit sales growth.
Joseph Jimenez, CEO, said, Novartis delivered solid financial performance with core margin expansion in the second quarter and first half. pharmaceuticals, in particular, showed improved productivity, driving core operating leverage for the Group. We also made significant progress on innovation across the portfolio, reaching milestones such as FDA approval for Zykadia in ALK+ non-smell cell lung cancer. FDA Fast Track designation and rolling submission for fir KCZ696 in chronic heat failure, CHMP recommendation for Simbrinza in glaucoma, and FDA breakthrough Therapy designation for CTL019 in acute lymphoblastic leukaemia. These innovation milestones reinforce the growth prospects of our leading businesses.”
For the first half ended June 2014, Novartis net sales increased 1.5 per cent to $28,659 million from $28,233 million in the corresponding period of last year. Its net profit also increased by 1.5 per cent to $6,495 million from $6,397 million with EPS at $2.64 as against $2.59 in the last period.
The company reconfirmed its outlook for full year 2014 and net sales are expected to growth a low to mid-single digit rate. Meanwhile, Vas Narasimhan has been appointed global head of development, Novartis Pharmaceuticals, effective from August 1, 2014.
Novartis had reached definitive agreements with GlaxoSmithKline (GSK) to acquire GSK oncology products and become GSK's preferred commercialization partner for its oncology pipeline, create a joint venture with GSK in consumer healthcare with holding of 36.5 per cent and dives its vaccines division (excluding flu) to GSK. Further, Novartis agreed to divest its animal health division to Eli Lilly.