Novartis misses forecasts; net profit falls after restructuring charge

Source: Healthcare Exec

Date :18/01/2008 11:45:30

Novartis AG, the Swiss pharmaceutical company, misses forecasts, with net profit falling 42 percent to $931 million, offset by generic competition in the US and a one-off restructuring charge.

Novartis, Europe's second-largest pharmaceuticals company by market capitalisation, also announced a 10 billion Swiss francs (£4.6 billion) buyback programme, to be put up for shareholder approval in February.

It broadly maintained its existing outlook, saying it expected group sales to rise at a mid single-digit rate in 2008, with drugs sales increasing at a low single-digit rate, and proposed a 2007 dividend of 1.60 francs, up 19 percent.

“Forward” restructuring

Novartis said it expects record results in 2008 from continuing operations on strong growth outlook for Sandoz, Vaccines and Diagnostics, and Consumer Health.

Commenting on the results, Dr. Daniel Vasella(pictured), Chairman and CEO of Novartis said: "Novartis delivered a strong performance in all major regions and in all divisions, with the exception of Pharmaceuticals in the US hit by generic competition and a product withdrawal.

Mr. Vasella said the group’s restructuring plan, "Forward", designed to improve the efficiency and productivity, will see the company make savings of $1.6 billion on an annual basis in 2010, after eliminating 2,500 full-time jobs.

January 18, 2008