Novartis has received minor setback in the second quarter ended June 2016 and its net profit declined by 1.7 per cent to $1,806 million from $1,856 million in the similar period of last year. Its net sales also moved down by 1.8 per cent to 12,470 million from $12,694 million due to generic competition. EPS worked out to $0.76 as against $0.77 in the last period.
The company completed acquisition of oncology assets from GSK and a 36.5 per cent interest in GSK Consumer Healthcare Holdings Ltd, and the divestment of its vaccines and animal health businesses in 2015. Further, the company has made changes and transfer the ophthalmic pharmaceuticals franchise from the Alcon Division to the Innovative Medicines Division (formerly named the Pharmaceuticals division), and the transfer of selected mature products from the Innovative Medicines Division to the Sandoz Division.
The sales of Innovative Medicines division declined by 3 per cent to $8,387 million from $8,633 million due to generic competition and pricing. Gleevec/Glivec genericization in the US, which impacted a full quarter for the first time. Its European sales improved by 9 per cent to $2.9 million, driven by Cosentyx, Tafinlar plus Mekinist and Gilenya. US sales declined by 10 per cent to $2.8 billion. The sales in Japan also declined by 2 per cent to $0.7 billion due to divestment of the 14 established medicines brands in March and to generic impact for Exforge and Diovan. However, sales in emerging markets improved by 3 per cent to $2 million. Its pharmaceuticals BU sales were slightly improved to $5.1 billion. And that of Oncology BU declined by 3 per cent to $3.3 billion.
For the first half ended June 2016, Novartis’ net sales declined by 2.3 per cent to $24,070 million from $24,629 million in the similar period of last year. Its net profit before discontinued operations, declined by 8 per cent to $3,817 million from $4,162 million. After taking into account income from discontinued operations of $10,681 million in the June 2015 quarter, its net profit declined sharply by 74 per cent to $3,817 million from $14,843 million.
The net sales of Innovative Medicines declined by 3 per cent to $16.1 billion due to generic competition and pricing pressure. Though European sales improved by 9 per cent to $5.6 billion, its US sales declined by 7 per cent to $5.4 billion. Japan sales also declined by 9 per cent to $1.3 billion. Emerging Growth Markets sales increased by 4 per cent to $4 billion.
The sales of oncology business unit remain flat at $6,3 billion. The sales of Gleevec/Glivec declined by 23 per cent to $1,725 million from $2,254 million and that of Tasigna improved by 7 per cent to $840 million from $784 million. Similarly sales of Sandostatin moved up by 3 per cent to $825 million from $798 million. The sales of established medicines declined by 20 per cent to $2.5 billion from $3.1 billion due to lower sales o Diovan/Co-diovan, Exforge and Ritalin/Focalin. Diovan sales declined by 21 per cent to $555 million.
Sandoz division sales remained almost same at $5 billion during the first half of last year. Sales in the US were $965 million, driven by a strong base business performance and despite a lower level of launches compared to a strong prior-year quarter. Global sales of biopharmaceuticals grew by 11 per cent to $249 million, despite lapping the Glatopa launch in the prior-year quarter. Sandoz continued to see strong growth for its here in-market biosimilars – Omnitrope, Binocrit and Zarzio.
Alcon division sales declined by 4 per cent to $2,932 million from $3,062 million. Regionally, North America sales were broadly in line with the prior year. Sales in Japan and Europe, the Middle East and Africa benefited from stronger Vision Care performance. Sales in Emerging Growth Markets declined by 7 per cent, mainly impacted by weaker surgical performance in Asia.