Swiss drugmaker Novartis stuck to its 2010 goals as it posted forecast-beating quarterly figures after governments bought up its flu vaccine during the swine flu pandemic. Earnings per share rose to $1.29, beating the average estimate of $1.11 in a Reuters poll. Novartis said it still expects group sales to grow at a mid-single-digit percentage rate in constant currencies this year, while sales at its pharmaceuticals division are seen growing at a mid- to high single-digit rate.
"The strong sales and profit contributions in the first quarter of 2010 from fulfillment of agreed-upon government supply contracts for A (H1N1) pandemic vaccines, with sales approximately $400 million above the group's target at the beginning of the year, will further strengthen these prospects," Novartis said in a statement.
Novartis has agreed to buy a majority stake of Alcon from Nestle SA and has said profit was difficult to predict due to the deal, which should help cushion the forthcoming loss of exclusivity on treatments like top-selling blood pressure drug Diovan. Sales of Diovan, which is facing increased competition from the generic version of Merck & Co's hypertension drug Cozaar, fell 1% to $1.4 billion.
Investors will eye results from U.S. rivals Biogen and Johnson & Johnson due later on Tuesday as well as from Abbott, Amgen and Genzyme on Wednesday for more clues about the health of the industry. Eli Lilly on Monday posted a forecast-beating first-quarter profit, but cut its full-year profit forecast due to costs from the recently passed U.S. healthcare reforms.
Last week cross-town rival Roche also beat first-quarter sales forecasts and confirmed its full-year outlook thanks to strong sales of its cancer drugs. Novartis said its oncology sales rose 14% to $2.4 billion, with Tasigna sales more than doubling. Novartis is relying on Tasigna to make up for any lost sales of Glivec, its second best-selling medicine, which will lose patent protection over the next few years.
Novartis trades at a premium to AstraZeneca and Sanofi-Aventis thanks to promising new drugs such as multiple sclerosis pill FTY720 and a broad business base, but it trails Roche and GlaxoSmithKline.
