Strong drug sales boost Novartis Q1 net profit
ZURICH (Reuters) - Strong sales of Novartis's flagship high blood pressure and cancer drugs boosted the Swiss drugmaker's first-quarter net profit by 11 percent to $2.171 billion, beating expectations and boosting its shares.
Top-selling drugs Diovan and Glivec boosted sales in Novartis's pharmaceuticals division by 17 percent to $5.9 billion, the company said on Monday, while overall group net sales were 18 percent stronger at $9.8 billion.
"All divisions, particularly Pharmaceuticals and (the generics unit) Sandoz, delivered excellent performance ... I am confident of another year of record sales and earnings in 2007," Chief Executive Officer Daniel Vasella said in a statement.
The company repeated its outlook for net 2007 sales growth of above 5 percent in local currencies, and for sales in the pharma unit to rise by a low- to mid-single-digit rate.
Novartis shares rose in early trade and were up 1.7 percent at 70.75 Swiss francs at 0815 GMT.
Sales of Diovan rose 20 percent and Glivec sales rose 16 percent, beating top-line sales growth in local currencies, while acquisitions and currency effects also helped.
The better-than-expected performance was also boosted by one-off gains, analysts said.
Novartis took a $52 million charge because of the suspension of its bowel drug Zelnorm in the United States, which would reduce sales by more than $600 million for the rest of 2007 and which last month forced Novartis to cut its outlook.
The company booked a $107 million gain from the release of a pre-launch inventory provision after U.S. approval of its Tekturna drug for high blood pressure.
Its vaccines unit was boosted by a $67 million one-off gain from a legal settlement.
But second-quarter sales are expected to be hit by the expiry of the patent on anti-fungal drug Lamisil and the Zelnorm suspension, Kepler Equities analyst Denise Anderson said.
"In addition, Q1 growth was helped by the Chiron (vaccines) acquisition," Anderson said in a note. "Thus, Q1 is expected to be far and away the best of the year."
The average expectation in a Reuters poll of 20 analysts was for net profit to inch down by 3 percent to $1.90 billion and for net sales to come in at $9.36 billion.
STRONG PIPELINE
Novartis's solid pipeline of future drugs and best-selling blockbusters and generics -- cheap versions of drugs that have come off patent -- have caused its shares to trade at a premium to those of competitors. Continued...
