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Novartis lifts 2013 guidance on delay to Diovan generics

Reveals scale of payments to former CEO Daniel Vasella

Novartis buildingA delay to the launch of a generic version of Novartis' high blood pressure drug Diovan has caused the pharma company to raise its sales forecasts for the year.

Novartis announced the revised guidance as it posted second quarter net sales that were up 1 per cent to $14.49bn, slightly ahead of expectations thanks to delays in Ranbaxy securing approval to launch its Diovan (valsartan) generic in the US. Net income was flat at $2.5bn.

Revenues at the company's pharma division fell 2 per cent to $8.1bn, with growth in new products such as multiple sclerosis treatment Gilenya (fingolimod), Afinitor (everolimus) for breast cancer, leukaemia therapy Tasigna (nilotinib) and Galvus (vildagliptin) for diabetes just about offsetting revenue losses to generic competition of some $800m in the quarter.

Diovan lost 22 per cent but still brought in $928m in the quarter, while Gilenya gained 66 per cent to $468m, Afinitor climbed 76 per cent to $308m and Tasigna came in at $315m, a rise of 38 per cent thanks to success in switching patients from Novartis' older therapy Glivec (imatinib). Galvus benefitted with roll-outs in additional countries and added 37 per cent to $289m.

Vaccines too had a strong quarter, with sales up 18 per cent to $411m thanks to rising demand for flu and paediatric vaccines, and Novartis' consumer health arm grew 11 per cent to just over $1bn.

Meanwhile, the company's Eyecare business Alcon posted sales of $2.73bn, up 3 per cent, while generics unit Sandoz grew by the same margin to $2.2bn thanks to a good contribution from biosimilar medicines.

Novartis also delivered on its promise to generate growth in emerging markets, with sales up 11 per cent overall and rising 25 per cent in China, 18 per cent in Russia and 16 per cent in South Korea. 

Chief executive Joe Jimenez also pledged to ensure Novartis would grow ahead of the overall market in China.

"Successful execution on growth brands allowed us to navigate patent expiries and new competition, while deepening our footprint in emerging growth markets," he added.

Jimenez also said Novartis had a fertile quarter in terms of its pipeline, with four approvals including Ilaris (canakinumab) for systemic juvenile idiopathic arthritis, Simbrinza (brinzolamide/brimonidine tartrate) for glaucoma, Lucentis (ranibizumab) for myopic choroidal neovascularisation and Exelon Patch (rivastigmine) for severe Alzheimer's disease.

- Meanwhile, Novartis has revealed it will pay former CEO Daniel Vasella around $6m this year, assuming he takes up consultancy offers, which is a dramatic comedown from the original $72m 'golden parachute' the company was forced to scrap after an investor revolt. The company will pay Vasella around $5.2m for services rendered since he stepped down in February.

18th July 2013

From: Sales

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