Novartis posts 62 pct. rise in 4Q net profit

[January 28, 2009]  BASEL, Switzerland (AP) -- Drugmaker Novartis AG reported a 62 percent rise in fourth quarter net profit Wednesday, helped by steady sales growth and the absence of the restructuring charges that hindered the previous year's results.

The company said net income rose to $1.507 billion from $931 million in the fourth quarter of 2007.

Income per share during the three months to December increased to $0.66 from $0.41.

For the full year 2008 Novartis said its net income from continuing operations rose 25 percent to $8.163 billion from $6.540 billion. The figures excluded the effects of the sale in 2007 of its medical nutrition unit and Gerber baby foods business. Including those businesses, net income for the year dropped 31 percent to $8.233 billion from $11.968 billion.

The company proposed a dividend of 2 Swiss francs ($1.76) per share for 2008.

The full-year results were slightly below analyst expectations, and Novartis shares fell 3.1 percent to 49.85 Swiss francs ($43.67) on the Zurich exchange.

Novartis said the increase in fourth-quarter profits was helped by the fact it had booked a $444 million pretax restructuring charge in the fourth quarter of 2007. Excluding that charge, net income during the quarter rose 20 percent compared to the previous year.

Sales at the company's pharmaceuticals division rose 5 percent during the quarter to $6.43 billion from $6.152 billion. Hypertension drug Diovan contributed $1.419 billion to sales, making it by far the company's best-selling medicine. Net sales of anti-cancer drug Glivec -- known as Gleevec in the United States -- reached $890 million during the quarter.

Vaccines and diagnostics saw sales increase 23 percent to $491 million from $398 million. Novartis announced late Tuesday that it will extend its partnership with San Diego-based diagnostic test maker Gen-Probe Inc. to 2025.

Its generic drugs unit Sandoz continued to struggle against competitors and with loss of sales in the United States due to product recalls. Sales fell 8 percent during the quarter to $1.804 billion from $1.971 billion.

The consumer health division saw sales fall 4 percent to $1.352 billion from $1.41 billion.

Financial income dropped by three-quarters to $58 million from $245 million, largely due to costs related to financing the purchase of U.S. eye-care company Alcon Inc. last year. Novartis chief financial officer Raymond Breu said the company had no exposure to the financial institutions whose collapse last year had knock-on effects throughout much of the corporate world.

Chief executive Daniel Vasella said he anticipated record results based on sustainable growth in 2009.

Add-on acquisitions would be considered, but large-scale mergers were out of the question, he told reporters in Basel.

Vasella would not rule out job cuts in 2009 as the company adjusts to changing market conditions, but said they would be used as an "absolute last resort."

[Associated Press]

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