Novartis' 4th-qtr profits fall 45%; but full-year 2007 income climbs to $12B

Fourth quarter 2007 net profits at Swiss drug major Novartis plummeted 45% to $931.0 million, as the impact of a $444.0 million restructuring charge and weaker quarterly performance in the USA, where sales fell 15% to $3.07 billion, began to take effect. Earnings per share for the period were down 39% to $0.41.

Observers had forecast that the latter part of 2007 would be the weakest for the firm, given the withdrawal of the bowel disease drug Zelnorm (tegaserod maleate; Marketletter August 6, 2007) and the impact of generic competition for key products, including the anti-hypertensive drug Lotrel (amlodipine/benazepril; Marketletter June 18, 2007). Overall, for the period, net sales from continuing operations were down 1% to $9.93 billion, which was still ahead of Lehman Brothers estimate of $9.52 billion.

Indeed, despite the decline in the final three months of the year, all of Novartis divisions were ahead of Lehman Brothers estimates, including: pharmaceuticals, which saw turnover of $6.15 billion versus the predicted $6.08 billion; $1.97 billion in generic sales vs $1.82 billion; vaccines and diagnostics contributed $398.0 million compared with the $330.0 million forecast; and consumer health operations, revenue from which reached $1.41 billion, outstripping Lehman's $1.39 billion guidance.