With the loss of exclusivity for its blockbuster heart drug, Diovan, coming in September, management focused on the company’s long-term prospects during a fourth quarter financial update.
For Novartis AG, 2012 will be a difficult year, but so far, the news is worse than expected. Just as it prepares to lose patent protection for its top-selling heart drug Diovan (valsartan), it faces a manufacturing mess-up at its Lincoln, Neb. facility, emerging side effect concerns associated with the blood pressure medication Tekturna/Rasilez (aliskiren), and concerns about an unexpected death associated with its new oral multiple sclerosis drug Gilenya (fingolimod).
But during a Jan. 25 fourth quarter sales and earnings call, management reassured it was ready to navigate through the near-term challenges and that the company will be well positioned for growth when it circles through the Diovan patent loss. Management pointed to portfolio highlights like Gilenya, Lucentis (ranibizumab) and Afinitor (everolimus) as growth drivers that will see the company through the challenges ahead.
"We did have some unexpected hits…but it’s a testament to Novartis's diversification strategy and our portfolio that we have absorbed issues as they arose," CEO Joe Jimenez commented during the briefing.
Net profits fell by 7% to $9.24 billion during 2011, as the Swiss multinational took exceptional charges of $1.7 billion in the fourth quarter for a series of stumbles, including the manufacturing problem, sliding sales of Tekturna and the discontinuation of several pipeline products such as the clot buster elinogrel (PRT128), oral calcitonin (SMC021) for osteoporosis, the antidepressant agomelatine (AGO178) and antibacterial PTK796. Consolidated sales increased, however, up 16% to $58.6 billion.
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