Novartis Profit Falls as Generics Hurt Sales of Gleevec Drugby
Swiss drugmaker reiterates 2016 forecast for sales, profit
Earnings per share of $1.23 beat analysts’ estimate of $1.20
Novartis AG, Europe’s second-biggest drugmaker by sales, said profit fell for the seventh straight quarter as generic competition eroded sales of blockbuster cancer treatment Gleevec.
Third-quarter earnings excluding some items fell 3 percent to $1.23 a share from $1.27 a year earlier, the Basel, Switzerland-based company said Tuesday in a statement. That beat the $1.20 average of analysts’ estimates compiled by Bloomberg.
Novartis, also grappling with a slump at its eye-care division Alcon, is banking on newer treatments like heart medicine Entresto and Cosentyx for psoriasis. Chief Executive Officer Joe Jimenez in July called the two drugs catalysts over the next five years. Novartis repeated a yearly forecast of $200 million in sales of Entresto, which brought in $53 million in the quarter, compared with an estimate of $57 million. Cosentyx revenue also fell short of estimates at $301 million.
Total revenue in the quarter decreased 1 percent to $12.1 billion, compared with analysts’ average estimate of $12.2 billion. Novartis affirmed its 2016 outlook, saying net sales are expected to be broadly in line with the prior year and core operating income is expected to be broadly in line or to decline by a low single-digit percentage.
There is nothing to disclose about Novartis’s stake in rival drugmaker Roche Holding AG, Jimenez said Tuesday on a call with journalists following speculation about a possible sale of the shares. Any decision to sell the stake would depend on how the money would be redeployed, Jimenez said.
Novartis fell 0.8 percent to 74 Swiss francs at 9:04 a.m. in Zurich trading.