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(Bloomberg) -- Novartis AG starts 2018 with a new chief executive and a rosier outlook, projecting a return to growth after three lackluster years.

The percentage increase in earnings excluding some expenses this year will probably be in the mid-to-high single digits, after showing no change in 2017 at constant currencies, the Basel, Switzerland-based drugmaker said in a statement Wednesday.

Novartis, whose Chief Executive Officer Joe Jimenez will hand the reins to Vas Narasimhan next week, is counting on new medicines -- heart drug Entresto, psoriasis treatment Cosentyx and Kisqali for breast cancer -- to buoy sales and counter the erosion to its aging blockbuster medicine Gleevec from cheaper copycats. The company also released a breakthrough cancer treatment called Kymriah for a deadly form of leukemia in August, with a price tag of $475,000.

“Pharma performance underlines that the division has exited the shadow of Gleevec and enters a new dawn of growth,” Tim Anderson, an analyst at Sanford C. Bernstein & Co. in New York, wrote in a note to clients.

Novartis shares rose 2.5 percent to 85.66 Swiss francs at 9:21 a.m. in Zurich trading. The stock has gained about 7 percent in the past six months, compared with a 2.8 percent drop for cross-town rival Roche Holding AG.

Narasimhan, who climbed through the ranks to become global head of drug development, will initially receive up to 8.9 million francs ($9.3 million) in annual compensation, including a salary of 1.55 million francs, according to the company’s annual report. That’s 26 percent less than Jimenez’s pay, reflecting that it’s Narasimhan’s first job as CEO, Novartis said.

Earnings excluding some items climbed 7 percent to $3.2 billion in the fourth quarter, compared with the $3.1 billion average of analysts’ estimates compiled by Bloomberg. Sales rose 5 percent to $12.9 billion, compared with analysts’ estimate of $12.7 billion.

The report shows price pressure on generics hurt sales at the Sandoz unit at the end of 2017 and will probably continue to do so next year. The percentage increase for overall sales next year will probably be in the low-to-mid single digits, with a possible decline at Sandoz, Novartis said.

Alcon Gains

The company reiterated that a decision on whether to spin off the Alcon eye-care division, whose sales grew by 8 percent last quarter, probably won’t come before the first half of 2019. Alcon needs to show sales and margin improvements for multiple quarters before Novartis can reach a decision about its future, the company said.

Sandoz, the unit that makes generics, suffered from price erosion. Full-year sales decreased amid pressure in the U.S., where the business makes almost a third of its revenue. The company is broadening a review of its U.S. generics business in a move that may lead to more divestitures beyond a potential sale of its skin-care treatments, people familiar with the matter said earlier this month.

Sales of Cosentyx, the psoriasis drug, rose 53 percent to $615 million, less than the $623 million analysts had forecast for the quarter. Entresto climbed to $185 million, compared with analysts’ estimates of $151 million in sales.

(Updates with shares in fourth paragraph.)

To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade, Phil Serafino

©2018 Bloomberg L.P.

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