Swiss drugmaker Novartis cut its 2020 sales outlook on Tuesday after second quarter sales and profit fell, as hospitals that stocked up on drugs during the first-quarter due to the COVID-19 pandemic slowed purchases.
Net income in the three months through June fell 4% to $1.9 billion, compared to $2.1 billion in 2019. Sales fell 1% in constant currencies to $11.35 billion, from $11.8 billion.
The Basel-based company cut its 2020 sales outlook, saying it now expects sales to grow in the mid-single digit percentage range, down from its previous expectation for a mid- to high-single-digit percentage increase.
Novartis was also more specific on its profit expectations, saying it now expected core operating income to increase by a low double-digit percentage, compared with its earlier view for a high-single to low-double-digit percentage increase.
In the first quarter, Novartis including its generics division Sandoz, benefited from hospitals stocking up on medicines, for fear that the new coronavirus's spread would leave them short of supplies. That effect tapered off in the second quarter, prompting the sales decline.
Chief Executive Vas Narasimhan said on a call that the pandemic created an "extremely disruptive environment," particularly dragging on its opthalmology and dermatology drugs where patients delayed seeing their health care providers.