Pharmaceuticals show strong Q1 growth for Novartis

Novartis reported a better than expected first-quarter net profit as pharmaceuticals delivered strong underlying growth of 12% in local currencies, but warned that the strong US dollar could hit its full-year results.

Progress in r&d was led by first approvals of anti-cancer medicine Afinitor and Ixiaro, a vaccine against Japanese encephalitis and key development projects were advancing well.

Novartis said net sales fell 2% to US$9.7bn, but rose 8% in local currencies, driven by new products from its pharmaceuticals division where sales rose by 3% to US$6.43bn.

Net profit fell 14% to US$2bn.

Novartis" chairman and chief executive Dr Daniel Vasella said: "The uncertain economy and currency market volatility create an opportunity to continue to enhance productivity and manage costs. Our aim in 2009 remains to again deliver record underlying net sales and earnings excluding currency effects."

The benefits of r&d investments were reaffirmed with the first regulatory approval of the anti-cancer medicine Afinitor in the US, as well as the US and European approvals of the new Ixiaro vaccine against Japanese encephalitis.

Novartis continues its focus in 2009 on driving sustainable growth from its broad healthcare portfolio in a challenging environment, one in which the demand for medicines continues to rise.

Novartis said its Sandoz generics company reporting sales growth of 4% in local currencies on sustained growth in many regions, although sales fell 9% in US dollars.

Sales dropped 11% to US$1.3bn in the consumer health division, with otc sales down in some emerging markets and the US. Animal health sales also dipped.

Expansion in targeted high-growth markets continues with a long-term perspective. Net sales in the top six emerging markets rose 23% in local currencies to US$846m in the first quarter of 2009, with only limited signs to date of an adverse impact from global economic conditions.