* CEO sees FX hitting Q3 earnings by 3-4 pct
* Novartis will hold on to Roche stake
* No cost-cutting plan in works following Diovan patent loss
ZURICH, Oct 7 Novartis is keen to
maintain its dividend and is looking to boost growth via
mid-sized acquisitions, though big deals are unlikely, the Swiss
drugmaker's chief executive said in a newspaper interview on
Like many of its rivals, Novartis is struggling to grow in
the face of patent expiries on key drugs, particularly Diovan
for high blood pressure. It is relying on new products, like
multiple sclerosis pill Gilenya, to fill the gap.
In 2010, Novartis made headlines when it wrapped up its
buyout of the remainder of U.S. eyecare group Alcon for $12.9
billion. The Basel-based firm in May agreed to buy Fougera
Pharmaceuticals, a maker of generic dermatology products, for
$1.53 billion in cash.
"Defending the dividend is a priority," CEO Joe Jimenez told
the SonntagsZeitung. "We want to stick with a good dividend
yield in the future."
Novartis paid a dividend of 2.25 Swiss francs a share last
year, a yield of 3.9 percent.
"Then we want to conduct medium-sizes acquisitions to boost
our growth," he also said. "In the foreseeable future we're most
probably not going to do any mega takeovers."
Novartis sees annual revenues of $5.6 billion from Diovan,
Jimenez said, and the drug's loss of exclusivity in Europe and
the United states meant the firm would face three "very
No new cost-control programme would be announced, though
some ad-hoc savings could be made over time, Jimenez said, as
other treatments coming on line would help make up for the fall:
"Our sales should rise markedly in the second-half of 2013."
For the third quarter, currency effects would shave 3-4
percent off operating income, he said, reiterating what he said
at the time of the firm's first-half results in July.
At the time, Novartis confirmed its full-year outlook for
net sales in constant currencies to meet those of 2011.
Although he declined to comment on the third quarter,
Jimenez said: "As I said at the presentation of the half-year
figures: We're on course."
Cancer is an increasingly important therapeutic area for
Novartis, which faces stiff competition in the field from
cross-town rival Roche Holding AG, the world leader in
oncology and in which it holds a third of the shares.
"We're holding on to our stake, since it's a strategic
decision and so far we've done well with it," he said. "Should
Roche want to raise equity, we'd have to agree with that."