Zurich: Swiss drugmaker Novartis expects demand for new medicines to offset competition from cheaper copies of its drugs after it posted forecast-beating second-quarter sales helped by its latest products.
Novartis, which has a better track record than most rivals in bringing new drugs to market, hit an upbeat note about its recently launched multiple sclerosis pill Gilenya, which raked in $79 million from April to June.
“Gilenya is turning out to be one of the most successful new product launches,” Chief Executive Joe Jimenez told reporters on Tuesday.
Sales at the Basel-based group rose 27%, or 19% in constant currencies, to $14.9 billion, ahead of a poll average of $14.735 billion, while sales volume at the key pharma unit rose 8%.
Novartis, like many other drugmakers, is starting to face generic competition as cancer drug Femara and its blood pressure medicine Diovan lose patent protection.
But Jimenez told Reuters Insider television that Novartis’ recent $51 billion buy of eyecare group Alcon as well its Sandoz unit, which itself makes generic drugs, would allow Novartis to navigate the loss of patents.
Sales of Diovan slipped 3% to $1.5 billion, but Novartis said the drug has held on to its position as the top-selling branded anti-hypertensive medication in the world. Femara sales tumbled 29%.
“I do expect because we have a broad portfolio quote across many geographies and many different segments of healthcare to be able to fully compensate for patent expiration going forward,” Jimenez said in the interview.
Novartis shares, which have underperformed the sector so far this year, were up 2.6% at 0701 GMT, outperforming a 0.4% rise on the European healthcare index
Novartis’ core earnings per share rose 23% to $1.48 in the second quarter.
“Overall a good set of results which just beat consensus expectations at both the top and bottom lines and importantly is delivering on the promised margin improvement. Gilenya is also continuing to see a good launch,” analysts at Jefferies said in a note.
The group said sales of Tasigna, which is being billed as a replacement for older drug Glivec in chronic myeloid leukaemia, rose 79%, while demand for eye drug Lucentis was also strong.
Novartis confirmed its full-year guidance and is eyeing group constant currency sales growth around the double-digit mark and volume growth in its pharma unit in the low- to mid-single digit range.
The group also expects to improve constant currency core operating margin, and this rose 0.4%age points year-on-year to 28.4% in the second quarter.
On the other side of the Atlantic, investors will also focus on the newest medicines at Johnson & Johnson when the diversified healthcare group posts its second-quarter results in a few hours.
Investors are hopeful that drugs like Zytiga and Edurant will revive J&J’s long-underperforming pharmaceuticals business.