* Novartis Q1 EPS rises to $1.29, beats forecasts
* Sticks to full-year guidance
* Shares rise 1.3 pct, outperform sector
(Adds details from conference call, analyst comment, shares)
By Katie Reid
ZURICH, April 20 Swiss drugmaker Novartis AG
NOVN.VX is confident about meeting its 2010 goals after
governments buying up its vaccines during the H1N1 pandemic
lifted the group to forecast-beating first-quarter results.
Earnings per share rose to $1.29 in the first quarter,
beating the average estimate of $1.11 in a Reuters poll, thanks
also to strong sales of new blood pressure drugs Exforge and
Tekturna, and cancer drugs Zometa and Femara. [ID:nLDE63E1U9]
Novartis repeated it expects group sales to grow at a
mid-single-digit percentage rate in constant currencies this
year, while sales at its pharmaceuticals division are seen
growing at a mid- to high single-digit rate.
Chief Executive Joe Jimenez, who took over from Daniel
Vasella in February, said Novartis was not raising its 2010
sales growth target despite an 18 percent rise in first-quarter
sales as the strong flu vaccines shipments will dwindle
throughout the rest of the year.
Pandemic flu vaccines boosted first-quarter sales by $1.1
billion -- about $400 million above the group's target at the
beginning of the year, Novartis said.
"At a first glance, (the results were a) big beat versus
consensus but mainly due to higher H1N1 flu vaccine sales,"
analysts at Julius Baer said. "Quality of the beat is therefore
rather low and not sustainable."
"Its most important drug Diovan suffered from price cuts in
Japan and missed consensus. All in all, we expect
just a slight positive share price reaction today as results
look not that good on a second view," they said.
At 1004 GMT, Novartis shares were trading 1.3 percent higher
at 57.15 Swiss francs, compared with a 0.4 rise in the European
pharmaceuticals sector .SXDP.
Eli Lilly (LLY.N) topped polls on Monday and strong sales of
cancer drugs at growth cross-town rival Roche ROG.VX pushed it
to better-than-expected results last week. [ID:nN19188587]
Investors will watch results from U.S. rivals Biogen
(BIIB.O) and Johnson & Johnson (JNJ.N) later on Tuesday, and
from Abbott (ABT.N), Amgen (AMGN.O) and Genzyme GENZ.O on
Wednesday for more clues about the health of the industry.
Novartis, which has agreed to buy a majority stake of
eyecare group Alcon ACL.N from Nestle SA NESN.VX for $28.1
billion, will now go for smaller, bolt-on buys in its generics
and vaccines and diagnostics units, Jimenez told reporters on a
The comments come just one day after Novartis snapped up
privately held U.S. company Oriel Therapeutics to boost its
generics portfolio in the multibillion-dollar market for
respiratory drugs. [ID:nLDE63I05N]
Novartis expects to complete the buy of the 77 percent stake
in Alcon in the second half of the year, but Jimenez declined to
give any update on how plans to acquire the remaining 23 percent
from minority shareholders were proceeding.[ID:nLDE60K031]
Novartis expects Alcon to create new growth, cushioning the
forthcoming loss of exclusivity on treatments like top-selling
blood pressure drug Diovan.
First-quarter sales of Diovan, which is facing increased
competition from the generic version of Merck & Co's (MRK.N)
hypertension drug Cozaar, fell 1 percent to $1.4 billion.
Novartis trades at a premium to AstraZeneca (AZN.L) and
Sanofi-Aventis (SASY.PA) thanks to promising new drugs such as
multiple sclerosis pill FTY720 and a broad business base, but it
trails Roche and GlaxoSmithKline (GSK.L).
(Editing by Sharon Lindores and Karen Foster)