Novartis AG (NVS) said profits fell 3% in the third quarter as generic competition for its older drugs such as cancer treatment Gleevec eroded revenue and it spent more on developing new products.
Core net income in the quarter fell 3% to $2.94 billion, or $1.23 per share, from $3.06 billion, or $1.27 per share, the Basel, Switzerland-based company said in a statement on Tuesday.
Sales fell 1% to $12.1 billion. Generic competition had a negative impact of 5 percentage points and pricing had a negative impact of 1 percentage point, both largely due to expiry of exclusive rights for Gleevec in the US, Novartis said. The newest products grew 21% in constant currencies to $3.8 billion, accounting for 46% of net sales.
Core operating income fell 3% to $3.38 billion, reflecting “generic erosion and growth investments, partially offset by productivity initiatives,” the company said.
The company said it estimates that group-wide net sales for the full year will be to be broadly in line with last year, with growth products, the company’s latest drugs, such as heart medicine Entresto and psoriasis treatment Cosentyx, offsetting the impact of generic competition. Core operating income will be “broadly in line with the prior year, or decline low-single digit,” the company predicted.
The company earned revenue of $53 million from the sale of Entresto, prompting it to to reiterate a sales forecast of about $200 million from the medicine.