Record results for Novartis in 2005
Net profit at Novartis was up ten per cent to $6.1 billion(SFr7.8 billion) in 2005, the Swiss pharmaceutical giant reported on Thursday, with net sales rising 14 per cent.
The Basel-based company said the strong gain was due to the “dynamic expansion of its pharmaceuticals division and subsidiary, Sandoz”.
“We gained market share and concluded strategic acquisitions to strengthen our leadership position in areas with high growth potential and unmet patient needs,” Novartis chairman and CEO, Daniel Vasella, said in a statement.
“We are confident of delivering in 2006 another year of dynamic growth with record sales and earnings,” he continued.
However, Vasella predicted that the international drugs market would expand more slowly this year due to cost-cutting measures such as governments opting for copycat versions of prescription drugs.
Pharmaceutical net sales were up ten per cent to $20.3 billion, growth which Novartis said was “ahead of the market”, and led by top products such as hypertension drug Diovan.
However some analysts said the company’s forecast for mid- to high-single digit growth for 2006 was conservative.
“It’s a mixed bag,” said KarlHeinz Koch, an analyst at Swiss private bank Lombard Odier Darier Hentsch. “The net profit figures are weaker than expected related to consumer health where they have encountered some problems.”
He added: “The outlook is also lower than what people had hoped for.”
Sandoz surge
Sandoz net sales surged 54 per cent to $4.7 billion, which was bolstered by $1.4 billion in sales contributions from Hexal and Eon Labs which were acquired in mid-year.
Sales for the company’s Consumer Health division climbed by eight per cent to $7.3 billion.
Novartis also published its fourth-quarter results on Thursday.
Group net sales during this period rose 18 per cent to $8.657 billion, thanks to top-selling Diovan and strengthened by generics acquisitions.
Vasella refused to comment on speculation that the group was interested in bidding for Swiss biotech firm Serono.
“In general, I would say that we made two large acquisitions in the generics business in 2005 and we have one acquisition [United States company, Chiron] that we are still in the process of consuming, so I think we have been quite active,” Vasella said.
While some dealers said Vasella’s comments suggested Novartis would not bid for Serono, Koch thinks the door is still open.
“If they were really not interested, they could simply say so,” he said. “This tells me they are not finished with Serono.”
Novartis, which spent $14 billion last year on beefing up its generics, vaccines and non-prescription businesses, is the first of the European drug makers to report full-year earnings and its sales and outlook will be closely scrutinised.
swissinfo with agencies
Group net sales up by 14% to $32.2 billion in 2005.
Pharmaceutical net sales rose 10% to $20.3 billion.
Sandoz net sales increased 54% to $4.7 billion.
Consumer Health net sales gained 8% to $7.3 billion.
In compliance with the JTI standards
More: SWI swissinfo.ch certified by the Journalism Trust Initiative
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.