Novartis puts in another record performance
Net profit at the Basel pharmaceutical company Novartis increased by 25 per cent in 2008 to $8.2 billion (SFr9.29 billion), the group announced on Wednesday.
Net sales were up by nine per cent to $41.5 billion on accelerating growth in the Pharmaceuticals divisions as well as “important contributions” from the Vaccines and Diagnostics business and Consumer Health.
“Thanks to successful innovation and a leading market position of our healthcare business portfolio, Novartis achieved a strong performance in 2008,” commented Novartis chairman and CEO Daniel Vasella in a statement.
“Pharmaceuticals returned to dynamic growth and gained market share in the second half of the year, while Vaccines and Diagnostics continued its double-digit growth.”
Vasella was optimistic for 2009 saying that Novartis expected “another year of record results in 2009, continuing on its path of sustainable growth”.
“Increasingly challenging”
But he warned that 2009 would present an “increasingly challenging environment”.
“We will have certainly some businesses performing well and others having some impact from the economy,,” Vasella told journalists. “So we will use all means to improve productivity but layoffs would be the last [thing] we would really implement.”
Novartis expects group sales to grow at a mid-single-digit rate and pharma sales at a mid- to high-single-digit rate.
Fourth-quarter net profit rose 62 per cent to $1.5 billion driven by sales of blood pressure and cancer drugs but it missed analysts’ forecasts.
“Quite a negative surprise due to higher than expected negative currency effects,” said DZ Bank analyst Thomas Maul.
Below expectations
Analysts at Helvea also said fourth-quarter figures were “below expectations across the board”. But they added in a note that the outlook provided by the management was “encouraging and should support confidence”.
“We achieved our full-year objectives for sales growth in local currencies and delivered a strong operating performance, but the fourth-quarter results were significantly impacted by the volatile currency markets,” commented Novartis spokesman John Gilardi.
Novartis shares lost 15 per cent of their value in 2008, much less than the wider Swiss Market Index of blue-chip companies.
Analysts note that Novartis faces the looming loss of patent protection on its best-selling Diovan blood pressure drug and tougher paths to markets for new products, and is trying to diversify and develop new medicines to fill the revenue gap.
It is preparing for increased generic competition in 2012 with several new drugs including several combination heart medicines and a cancer drug called Afinitor.
swissinfo with agencies
Novartis figures:
Sales in 2008: $41.459 billion ($38.072 billion in 2007), up 8.9%
Operating profit: $8.964 billion ($6,781 billion), up 32.2%
Net profit: $8.163 billion ($6.54 billion), up 24.8%
Proposed dividend: SFr2 (+25%)
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