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Novartis' net income up 15 per cent for Q2

Novartis has increased its net income by 15 per cent to $2.8bn in constant currencies for the second quarter of 2010

Novartis has increased its net income by 15 per cent to $2.8bn in constant currencies for the second quarter of 2010. This follows a 49 per cent increase in company profits for the first quarter of 2010.

The growth was driven by an increase in net sales of 12 per cent in constant currencies for the company to $11.7bn. Net sales were $10.6bn for the same period in 2009.

Recently launched products proved strong for Novartis, making up 21 per cent of net sales – a total of $2.4bn. Successful launches included Exjade (deferasirox), which made $192m after receiving regulatory approvals in the US and Europe for the treatment of chronic iron overload, and Certican/Zortress (everolimus) which made $26m after receiving US approval in April, 2010 for use in the prevention of organ rejection in adult kidney transplant recipients.

Tasigna (nilotinib), which was approved by the US Food and Drug Administration (FDA) in June 2010 for the treatment of chronic myeloid leukaemia, also did well in Q2 increasing its sales by 73 per cent.

Other strong performing products included Diovan (valsartan) for high blood pressure, which made $1.6bn and Gleevec/Glivec (imatinib mesylate) for chronic myelogenous leukemia, which made $1.1bn.

These figures contributed to an increase in the company's net sales for its pharmaceutical division of 8 per cent, rising to $7.7bn for the second quarter of 2010.

When broken down by region, emerging markets saw improvements in total net sales, with the combined Asia, Africa and Australasia region showing an increase of 5 per cent, and the combined Canada and Latin America region posting an increase of 13 per cent. However, there was no significant change to the percentage of total company sales these regions accounted for, with the US and Europe also recording similar increases.

Following the results of the first half of 2010, Novartis has said it is to raise its sales guidance for the full year. Total sales growth, at constant currency, is expected at mid- to high-single-digits, with operating margin and core operating margin expected to increase in 2010 following continued business expansion and productivity improvement.

This guidance doesn't take into account the company's planned acquisition of Alcon with related predicted outcomes to be clarified once the deal is completed.

15th July 2010

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