Zurich: Swiss drugmaker Novartis AG’s second-quarter net profit fell 10% to $2.0 billion due to the stronger dollar and higher financing costs, in line with forecasts.
Novartis, which faces loss of exclusivity on its top selling blood pressure drug Diovan in 2012, on Thursday raised its full year forecast for its drugs unit, where it now sees sales growing at a minimum high-single-digit rate. It confirmed previous group guidance.
The pharmaceuticals sector initially coped better than others with recession but has begun to underperform, hit by prospects of more competition, problems getting new drugs to market and cheaper medicines.
Novartis shares have slipped nearly 20% so far this year, underperforming both the DJ Stoxx European pharma index and Swiss blue chip index.
It now trades at about 9 times forecast 2010 earnings, a premium to some of Europe’s other big drugmakers like AstraZeneca Plc and Sanofi-Aventis SA but a discount to local rival Roche Holding AG, which has less exposure to generic competition. Novartis had been expected to post a net profit of $2.0 billion, according to a Reuters poll.