Pharmaceuticals and vaccines and diagnostics net sales increase
Swiss pharmaceutical firm Novartis reported a 47% drop in its fourth quarter net profit in 2011 to US$1.2bn owing to exceptional charges from disappointing clinical trials, manufacturing problems and restructuring. For the full year, net profit fell 7% to $9.2bn.
Novartis recently halted a clinical trial into wider uses of the hypertension drug Tekturna, which is known as Rasilez outside the US, after it was found to cause increased complications in patients already taking other hypertension drugs.
The company said it took an exceptional charge of $903m in the fourth quarter as a result of the trial ending.
Two other experimental drugs, PRT128 (elinogrel) and SMC021 (oral calcitonin) were also dropped, leading to one-off charges of $163m in the fourth quarter.
The firm also took a charge of $115m related to the temporary suspension of production at a consumer health site in the US. Alcon integration charges of $61m, and restructuring costs of $288m further increased exceptional charges.
Net sales for the Basel-based firm increased 4% to US$14.8bn, with full year figures up 16% to $58.6bn.
The firm said its portfolio rejuvenation continued to drive overall growth, as recently launched products sales grew 30% over the previous year to $3.7bn. Gilenya, for example, the first oral treatment for multiple sclerosis, and chronic myeloid leukaemia drug Tasigna achieved strong growth, together with Lucentis for wet age-related macular degeneration.
Pharmaceuticals net sales grew 4% to $8.3bn in the fourth quarter. Alcon, the eyecare group bought from Nestlé, saw net sales of $2.4bn rise 6% on a pro forma basis, while the Sandoz generics division saw net sales decline 5% to $2.3bn due to additional competition to the anti-coagulant enoxaparin.
Vaccines and diagnostics net sales increased 86% to $671m. Consumer health, which comprises over-the-counter products and animal health, was down 7% at $1.1bn.
Sales in Novartis’ top six emerging markets of Brazil, China, India, Russia, South Korea and Turkey accounted for 10% of group net sales.
For 2012 Novartis expects sales to be in line with 2011 despite the patent expiry of blockbuster heart drug Diovan and the Tekturna/Rasilez decline.
Joseph Jimenez, chief executive of Novartis, said the firm achieved ‘solid sales growth and strong operating leverage in the fourth quarter and for the year as a whole’.
He said the firm had maintained its innovation momentum, achieving 15 key approvals and expanding its pipeline. It also improved core margins through targeted productivity initiatives.
However, he acknowledged some disappointments in the fourth quarter, with Tekturna/Rasilez and with the need to improve quality standards at some manufacturing sites.
‘We are committed to ensuring one single high quality standard across Novartis and will invest the necessary resources to achieve this goal in all divisions. Novartis is well positioned as we face the expected patent expirations and will continue discovering new treatments to improve the health of patients across the globe,’ he said.