Novartis beats forecasts, despite generic and currency hits

Second-quarter 2012 group net sales at Swiss drug major Novartis (NOVN: VX) came in at of $14.3 billion, a rise of 1% at constant currency, with growth in recently-launched products more than offsetting loss due to patent expiry on the firm’s once blockbuster blood pressure drug Diovan (valsartan). Currency had a negative impact of 5 percentage points as a result of the strengthening of the dollar against most major currencies.

Core operating income was $3.9 billion (-3% cc) in second quarter, with core earnings per share at $1.38, down 3% cc, beating the $1.33 a share, the average forecast of 14 analysts compiled by Bloomberg. EPS $1.12 (+4% cc) in second quarter. Novartis confirmed its full-year outlook for net sales in constant currencies to meet those of 2011 and for the core operating income margin to be slightly below 2011.

Commenting on the results, Joseph Jimenez, chief executive of Novartis, said: "Novartis achieved eight significant regulatory milestones in the second quarter, including CHMP [the advisory committee of the European Medicines Agency] recommendation for Afinitor [everolimus] in advanced breast cancer, further enhancing our future growth prospects. Pharmaceuticals and Alcon delivered solid financial performance and operating leverage in the second quarter, underpinned by our continued focus on portfolio rejuvenation, with recently launched products now representing 29% of Group net sales compared to 25% last year."