Swiss drug giant Novartis AG (NVS) reported Tuesday higher profit in its second quarter, despite weak net sales. A volume growth of 6 percentage points was offset by the negative impacts of generic competition and pricing. Further, the company confirmed its forecast for fiscal 2017.
Joseph Jimenez, CEO of Novartis, said, “Novartis delivered very strong innovation in Q2 including the positive pivotal trial readouts for RTH258, ACZ885 and CTL019 JULIET, demonstrating the strength of our pipeline. We are on track for the full year guidance. The trajectory of the current growth drivers reinforces our confidence in our next growth phase, which we expect to start in 2018.”
For the second quarter, net income grew 10 percent to $1.98 billion from $1.81 billion a year ago, mainly driven by divestment gains and lower amortization. Earnings per share increased 11 percent to $0.84 from $0.76 last year.
Core net income was $2.87 billion or $1.22 per share, compared to prior year’s $2.93 billion or $1.23 per share last year.
For the quarter, operating income on a reported basis increased 9 percent year-over-year to $2.28 billion, while core operating income fell 3 percent to $3.24 billion.
At constant currency rates, core operating income was in line with prior year as gross margin expansion and productivity offset the generic erosion and growth investments.
Net sales were $12.24 billion, 2 percent lower than last year’s $12.47 billion. At constant rates, net sales remained flat as growth drivers offset Gleevec/Glivec Gx impact.
Innovative Medicines net sales were $8.3 billion, down 1 percent, despite volume growth of 7 percentage points. Among key growth drivers, Cosentyx sales climbed 90 percent at constant currency, with strong growth in all three indications. Entresto grew 240 percent in constant currency rates, driven by improved access and US sales force expansion.
Excluding Gleevec/Glivec, Oncology grew 9 percent driven by Promacta, Tafinlar + Mekinist and Jakavi.
Net sales in Emerging Growth Markets grew 4 percent driven by strong performance in China, Russia and Brazil.
Sandoz net sales fell 5 percent, as volume growth of 4 percentage points was more than offset by 8 percentage points of price erosion, mainly in the US.
Alcon sales grew 1 percent driven by Surgical with growth in key segments, including IOLs, and Vision Care.
Looking ahead, for fiscal 2017, the company continues to expect net sales to be broadly in line with prior year, and core operating income to…