Financial Report: Novartis

Novartis

4Q Revenues: $9.9 billion (+6%)

4Q Earnings: $931 million (-42%)

YTD Revenues: $39.8 billion (+8%)

YTD Earnings: $12.0 billion (+66%)

Comments: U.S. pharmaceutical sales were down 21% in the quarter, due to the withdrawal of Zelnorm and generic competition for hypertension drug Lotrel. Earnings in the quarter were also impacted by a $444 million restructuring charge, as a result of 2,500 job cuts. The company hopes to save $1.6 billion in costs each year by 2010. Results include pre-tax divestment gains of $5.8 billion from Medical Nutrition (until June 30) and Gerber (until August 31). Sales growth was driven by Vaccines and Diagnostics and Sandoz, up 52% FY to $1.4 billion, and 20% FY to $7.2 billion, respectively. Diovan sales were $1.4 billion in the quarter, up 12%, and $5.0 billion for the year, up 16%. Gleevec/Glivec sales in the quarter were $800 million, up 12% and for the year were $3.1 billion, up 14%. R&D expenses for the year were up 19% to $5.1 billion, accounting for 21% of sales.