Novartis First-Quarter Net Profit Up 11% to $2.2 Billion
Strong sales of its flagship drugs boosted net profit at Swiss drugmaker Novartis by 11% to $2.171 billion, the group said on Monday, confounding expectations for a weaker profit.
Top selling drugs Diovan for high blood pressure and Glivec for cancer boosted sales in its pharmaceuticals division by 17% to $5.9 billion, the group also said, while overall net sales were 18% stronger, reaching $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% in local currencies, and for sales in the pharma unit to hit a low- to mid-single-digit rate.
Sales of Diovan rose by 20% and of Glivec by 16%, beating top-line sales growth in local currencies, while acquisitions and currency effects also helped.
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 it to cut its outlook.
The average expectation in a Reuters poll of 20 analysts was for net profit to inch down by 3% to $1.90 billion and for net sales to come in at $9.36 billion. Pharma sales had been pencilled in at $5.69 billion.
Operating income for continuing operations -- excluding a gain from the sale of the Nutrition & Sante and Medical Nutrition units last year -- rose by 18 percent, in line with sales.
Novartis's solid pipeline of future drugs and best-selling blockbusters have caused its shares to trade at a premium to those of competitors.
According to Reuters data, the stock trades at 17 times expected 2007 earnings.
That compares with multiples of 15 for GlaxoSmithKline and 13 times for Sanofi-Aventis. Only cross-town rival Roche at 21 times trades even higher.
Trading is due to resume at 7:00 am GMT.