Novartis AG raised its drug sales forecast, saying new medicines to battle blindness, hypertension and brittle bones may buoy revenue this year.
Europe’s second-largest drugmaker estimated pharmaceutical sales would rise at a “high-single-digit rate,” compared with an earlier forecast of a “mid-to-high-single-digit rate.” The Basel, Switzerland-based company, which reported a 10 percent profit drop today, didn’t give a more precise estimate.
Novartis said seven new treatments introduced since the start of 2008, including Exforge to lower blood pressure and Reclast for osteoporosis, saw sales rise 91 percent in local currencies in the first six months of the year.
“Raising the guidance was today’s positive surprise,” Karl Heinz Koch, an analyst at Helvea SA in Zurich, said in a telephone interview. “The new products are holding their own quite well.”
Novartis rose as much as 88 centimes, or 2 percent, to 44.58 Swiss francs in Zurich trading. The drugmaker’s shares have fallen 18 percent this year, making it the worst-performing stock on the Bloomberg Europe Pharmaceutical Index.
Novartis also said today it’s making progress on a vaccine against pandemic flu. Clinical tests for an injection against the H1N1 virus will start this month and the U.S. government has ordered $979 million worth of the product and of an adjuvant known as MF59, designed to boost the patient’s immune response and make the shot more effective.
Dollar Hurts
Chief Executive Officer Daniel Vasella is “doing a good job. Not an excellent job, but a good job,” said Dieter Buchholz, who manages $12 billion in Swiss and U.S. assets as head of equities for Falcon Private Bank.
The dollar’s strength against the euro caused earnings and sales to slide last quarter.
Net income dropped to $2.04 billion from $2.25 billion a year earlier, the drugmaker said today. Older products like the Diovan hypertension pill and Gleevec for cancer helped fuel an 8 percent sales gain that was wiped out when Novartis converted the revenue into dollars. Sales fell 2 percent to $10.5 billion.
The results were in line with analysts’ estimates. Earnings may improve in the second half should the dollar weaken, according to Fabian Wenner, an analyst at UBS AG in Zurich.
From the end of the second quarter of 2008 through June 30 of this year, the dollar gained 12 percent against the euro, reducing the value of Novartis’s sales in Europe.
Menveo Delay
Profit may drop this year if exchange rates remain where they are, Novartis said. Sales from continuing operations will probably rise at a mid-single-digit percentage rate this year in local currencies. Drug sales will likely grow at a high-single- digit rate in local currencies, Novartis said.
Novartis suffered a setback in July when the U.S. Food and Drug Administration asked for more information on the experimental meningitis vaccine Menveo, delaying the shot’s approval. Menveo is one of the products Novartis expects to drive revenue after the company loses patent protection on its two biggest-selling products, Diovan and Gleevec.
Sales at the drug unit rose 3 percent to $7.1 billion last quarter, driven by Gleevec and Diovan. Revenue from vaccines dropped 23 percent because of a comparison with the year-earlier period, when demand for an experimental shot against bird flu lifted sales. Sales at the generic drug unit Sandoz declined 9 percent to $1.8 billion, while consumer health lost 8 percent to $1.4 billion
No comments:
Post a Comment