Roche revealed interim results last month that were at the lower end of analysts' expectations, but still appear favorable at first glance to the figures for the first half of 1996 announced by Switzerland's two other pharmaceutical majors, Ciba and Sandoz (Marketletter September 2). Furthermore, outside Switzerland, international competitor companies appear to have been more robust in the first half.
Some industry observers believe that for Ciba and Sandoz the poor performances are not significant as, by the end of the year, they will be focused on the cost benefits they expect to gain from merging their businesses to form Novartis. The firms are expecting to make savings of 1.8 billion Swiss francs ($1.5 billion). The restructuring of the firms is expected to run up a bill of 2 billion francs.
Once the restructuring has been done and the fruits of a combined product pipeline come through, observers are suggesting that Novartis could experience earnings growth of 15% annually through to the millennium.
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