Novartis announces fourth-quarter and full-year results

Novartis (Basel, Switzerland) has recorded a full-year net sales rise of 14% to $32.3bn following 'dynamic expansion' of Novartis Pharmaceuticals, up by 10% to $23.3bn, and Sandoz, the company's generic arm, which jumped 54% to $4.7bn.

For the fourth-quarter, in comparison to 2004, net sales rose by 14% to $8.7bn, while Pharmaceuticals rose by 6% to $5.2bn and Sandoz rose by 81% to $1.6bn.

Group operating income rose by 10% to $6.9bn for the year, but was down 1% to $1.5bn for the quarter.

The strongest areas in Pharmaceuticals, which accounted for 63% of group net sales, were the cardiovascular and oncology franchises, each of which generated in excess of $5bn for the year. Diovan and Lotrel, hypertension treatments, and Gleevec/Glivec, a chronic myeloid leukemia and gastrointestinal stromal tumour treatment, were the best-performing products, achieving $3.7bn, $1.1bn and $2.2bn for the year, and $994 million, $297m and $590m for the quarter, respectively.

The company was also pleased with the performance of Femara, a treatment for early and advanced breast cancer in postmenopausal women, which delivered sales of $536m, marking growth of 38%, for the year ($146m, up 32% for the quarter) following new clinical data from the MA-17 and BIG 1-98 trials.

The performance of Sandoz, which accounted for 15% of group net sales, was aided by the acquisitions of Hexal (6 June) and Eon Labs (20 July), which accounted for $1.4bn. Excluding these acquisitions, the arm's sales rose by 9% following 'strong retail generics sales in Europe and Russia as well as new launches in the US'.

Meanwhile, net sales in Consumer Health, buoyed by the acquisition of the Bristol-Myers Squibb OTC business, which contributed $72m in sales, rose 8% to $7.3bn for the year and 5% to $1.8bn for the quarter, accounting for 22% of group net sales.

The company is expecting its acquisition of Chiron Corporation to be completed in the first half of 2006, having already received US regulatory approval and being expectant of approval in Europe in the near future. It will focus the business on ensuring influenza vaccine supply for the 2006/2007 season and subsequent years, and is forecasting annual synergies of $200m as a result.

The company is preparing submissions for Galvus (formerly LAF237, type 2 diabetes), Rasilez (formerly SPP100, hypertension) and LDT600 (hepatitis B) in 2006, when it expects to achieve Pharmaceuticals net sales growth in the mid-to-high single digits along with record levels of operating and net income.

The company has already signed a collaboration agreement with Belgian biotech company Ablynx to discover and develop therapeutic nanobodies aimed at a range of diseases that are 'difficult to address with conventional antibodies', all of which Novartis will have exclusive rights to commercialise.

Daniel Vasella, chairman and ceo said he considered the likelihood of large transactions in 2006 to be 'very small', adding 'on Serono, I decline to comment'.