Swiss pharmaceutical company Novartis reported a fall in fourth quarter profit and sales in 2014, but said it was positioned for future growth in 2015, in spite of current uncertainty about the Swiss franc.
The company reported a 26% drop in net profit to US$1.49bn in Q4 2014, due mainly to the sale of its flu vaccines business to CSL of Australia, while sales dipped 2% to $14.63bn.
In its pharmaceuticals division, Novartis reported a 6% fall in net sales to $7.9bn in the fourth quarter, affected by reduced revenue from blood pressure treatment Diovan to $379m, owing to generic competition.
Growth products, including Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, the COPD (chronic obstructive pulmonary disease) portfolio and Jakavi contributed 46% of division net sales, compared with 39% in the same period in 2013.
For the full year, group net income of $10.3bn was up 12%, while group net sales increased 1% to $58bn, with growth products contributing $18.6bn or 32% of group net sales. Generic competition, including for Diovan, took $2.4bn off sales revenue.
We improved our execution, while taking steps to focus the company on our three leading businesses with global scale
Pharmaceuticals delivered full-year net sales of $31.8bn, a fall of 1%, which was mainly caused by generic competition.
Chief Executive Joseph Jimenez said 2014 had been a 'transformational year' for the company.
As part of its overhaul, Novartis is buying GlaxoSmithKline's oncology business for around $14.5bn, adding to its portfolio of cancer drugs.
At the same time, GSK is paying $5.25bn for Novartis’s vaccines business in a deal that is expected to be completed in the first half of this year.
The two companies will also combine their over-the-counter drug businesses under GSK’s management.
Last month Novartis completed the sale of its animal-health division to Indianapolis-based Eli Lilly & Co for $5.4bn.
'We improved our execution, while taking steps to focus the company on our three leading businesses with global scale,' said Jimenez. These are pharmaceuticals, generic drugs and the Alcon eye care business.
'We delivered solid sales growth with margin expansion, strengthened innovation, and advanced our quality and productivity agendas,' Jimenez added.
