Novartis posts sharp drop in 1st-qtr profit; challenges UK off-label Avastin use

Swiss drug major Novartis (NOVN: VX) has reported a sharp fall in first-quarter 2012 profits, due in part to manufacturing problems at a US plant and falling sales at its generic unit Sandoz and its Vaccines and Diagnostics business, as well as a strong US dollar.

Net income decreased 18% (-15% at constant currencies) to $2.33 billion, translating into a 21% (-19%cc) decline in earnings per share of $0.95. Core operating income declined 8% (-6% at cc) to $3.69 billion and core EPS decreased 10% (-8% cc) to $1.27, slightly lower than consensus forecasts from analysts of $1.28.

First-quarter group net sales dipped 2% (-1% cc) to $13.735 billion. Pharmaceutical revenues grew 2% (+3% cc) to $7.84 billion and eye care business Alcon’s net sales increased 5% (+6% cc) to $2.54 billion. However, sales at Sandoz declined 10% (-8% cc) to $2.12 billion, as the generics unit faced a strong year-ago base with enoxaparin exclusivity, while Vaccines and Diagnostics net sales plunged 19% (-18% cc) to $299 million and Consumer Health dropped 20% (-18% cc) to $932 million.