Novartis quarterly profit jumps to $13b after large divestments

Swiss pharmaceutical company Novartis said Thursday that its net profit multiplied to $13 billion in the first quarter, owing to the sale of its vaccine and animal health businesses.

The Basel-based company had made a net profit of $2.97 billion in the first quarter of last year.

Not taking into account divestments, profit fell 6 per cent to $2.31 billion, while operating profit went down 1 per cent to $2.79 billion.

This was due to the strengthening of the dollar against most other currencies. Earnings would have increased without this currency effect.

Sales fell 7 per cent to $11.94 billion. They would have risen by 3 per cent at constant currency rates.
If rates stay where they are for the rest of the year, they would drag down annual sales by 10 per cent, Novartis forecast.

Novartis sold its vaccine operations to British company GlaxoSmithKline (GSK) in the first quarter, while its animal health business went to US-based Eli Lilly.

Novartis’ influenza business was not part of the GSK deal and is to be sold separately later this year.

The divestments are part of the Swiss company’s strategy of concentrating on brand drugs, generic drugs and eye care products, in reaction to expiring patents and falling revenues.

Novartis shares rose 1.4 per cent to 101.60 Swiss francs ($101,92) at the Zurich stock exchange following the earnings announcement.

Source: GNA