Novartis Positive Despite 12% Decline in First Half

16 July 2009 (Last Updated July 16th, 2009 18:30)

Novartis has remained positive that the company's pharmaceutical business will continue to deliver despite a reported a 12% decrease in net income for the first half of 2009, lowering overall income by $4bn. The decline has largely been blamed on financing costs incurred during the 25% s

Novartis has remained positive that the company's pharmaceutical business will continue to deliver despite a reported a 12% decrease in net income for the first half of 2009, lowering overall income by $4bn.

The decline has largely been blamed on financing costs incurred during the 25% stake takeover in Alcon, which was acquired in mid-2008.

The company reported a decrease in net income by 10% in the second quarter of 2009 to $2bn, mainly attributed to currency changes and higher financing costs, which included a €1.5bn bond issued in the second quarter of 2009.

Novartis chairman and CEO Dr Daniel Vasella said that he was pleased that the pharmaceuticals business continues to deliver double-digit underlying growth, driven by the strong momentum of recently launched products.

"In the first six months of 2009 we have introduced our new anti-cancer therapy Afinitor in the US and gained first approval for llaris as a new biologic therapy for auto-inflammatory diseases. We are also advancing well in our efforts to rapidly produce and commercialise a vaccine against the H1N1 virus, with clinical trials set to begin in July," Vasella said

In the first half of 2009 Novartis' group net sales increased by 8% in local currencies, but declined 2% in US dollars to $20.3bn.

The company's net sales rose by 8% in local currencies, but fell 2% to $10.5bn from the loss of 10 percentage points of growth to currency movements, during the second quarter of 2009.

Operating income of the company decreased by 4% in the second quarter to $2.4bn, but rose by 13% when adjusted for the impact of adverse currency movements, exceptional items and the amortisation of intangible assets in both periods.