Novartis International AG has received setback during the first quarter ended March 2015 and its net profit from continuing operations declined by 6 per cent to $2,306 million from $2,454 million in the similar quarter of last year. Its net sales also declined 6.5 per cent to $11,935 million from $12,767 million. With lower net profit, EPS declined to $1.33 from $1.35.
The company completed a series of transactions with GlaxoSmithKline plc (GSK). These comprise the acquisition of certain oncology products and right of first negotiation to the pipeline compounds from GSK, the creation of a world-leading consumer healthcare business through a joint venture combining the two companies' consumer divisions, and the divestment of the Novartis non-influenza vaccines business to GSK. The transaction were part of the Novartis portfolio transformation announced on April 22, 2014 to focus the company on three leading businesses, and follow the divestment of Animal Health to Eli Lilly and Company completed on January 1, 2015.
The Group's total income increased to $15,407 million during first quarter ended March 2015 from $3,489 million basically due to income of $12,622 million from discontinued operations. And its net profit from discontinued operations amounted to $13,005 million as against $2,968 million.
Joseph Jimenez, CEO, said, “Our focus on execution has resulted in a strong operational performance. We have completed the GSK and Lilly transactions and innovation continues to be strong. We had three approvals in oncology, FDA priority review for LCZ696, Zarxio became the first biosimilar approved under the new pathway in the US and we launched Cosentyx globally. We are on track to deliver our full-year guidance.”
Its pharmaceutical sales declined by 8.5 per cent to $7,140 million during the quarter under review from $7,807 million and that of Alcon declined by 3 per cent to $2,558 million from $2,642 million. Similarly, the sales of Sandoz division declined by 3 per cent to $2,237 million from $2,318 million. Pharma sales includes the new oncology assets acquired from GSK (sales of $0.2 billion in March), offset by the negative impact of generic competition, largely for Diovan monotherapy, Exforge and Vivelle-Dot in the US. Its growth products viz., Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, the COPD portfolio and Jakavi generated net sales of $2.9 billion.
Alcon division's net sales declined marginally to $2,558 million from $2,642 million. Sales of intraocular lenses were flat. Sandoz division sales also declined by 3 per cent to $2.2 billion despite volume growth of 13 per cent. Its sales of retail generics and biosimilars in US improved by 13 per cent, driven by continuing strong performance from recent launches and Fougera sales.
The company projected sales growth of mid-single digit after absorbing the impact of generic competition in 2015. The currency impact results from the significant strengthening of the US dollar against most currencies.