Financial Reports: Novartis

Novartis 1Q13

1Q Revenues: $14.0 billion (+2%)

1Q: Earnings: $2.4 billion (+7%)

Comments: Phamaceutical revenues were flat at $7.9 billion. Sales of growth products were up 14% to $4.2 billion, offsetting generic losses of $500 million from Diovan’s patent expiration. Gilenya sales were $421 million (+71%), Afinitor was $303 million (+114%), Tasigna was $284 million (+39%), Galvus was $267 million (+40%), and Lucentis rose 7% to $596 million. Sandoz (generic) slew were up 6% to $2.3 billion, with a 12% increase in volume due to growth in Europe and Asia. Biosimilars revenues were up 22% to $94 million. Vaccines and Diagnostics rose 9% to $327 million, driven by bulk pediatric shipments, flu season in the U.S. and pre-pandemic sales. That unit posted an operating loss of $157 million, compared to a loss of $173 million in 1Q12.

Providing an update on its Lincoln, NE manufacturing site, the company said it was re-inspected in 1Q13 and issued nine 483 observations related to reporting issues, but not manufacturing. Novartis will reduce the number of product forms that the site makes in order to lower the complexity of its operations, and will lay off 40% of the site’s staff (300 people) in the next two years. To get product back on the market, the company has used CMOs to produce Excedrin Migraine, Lamisil, Triaminic and Excedrin Extra Strength. Benefiber will be the next re-launch (expected in 2Q13 followed by Theraflu in North America later in the year.