Q2 earnings update: Novartis sales slump on strong dollar, weak Alcon
- Pharma giant Novartis' net income was down 32% to $1.86 billion for Q2 2015, compared with Q2 2014.
- Alcon (eye care unit) sales were down by 5% to $12.7 billion; however, they were up 6% at constant exchange rates (CER).
- The generics division, Sandoz, performed well, with overall sales up 2% (11% at CER).
While Q2 net income was down overall, individual units actually performed better than the numbers reflect. The strength of the dollar compared with other currencies had a negative impact. There were definitely winners in the pharmaceutical division, including Gilenya (fingolomid) for multiple sclerosis, with sales up 26% to $700 million; Tasigna (nilofinib) for leukemia, with sales up 21% to $412 million, Afinitor (everolimus), for cancer, with sales up 19% to $427 million and Jakavi (ruxolitinib), which had sales of $98 million—up a total of 68%.
However, while there were strong perfomers and the impact of CER was largely responsible for some of the lower earnings, Alcon suffered because of lower sales, in terms of lower surgical equipment sales, competitive challenges and accelerated contact lens care decline.
In addition, a recent U.S. Court of Appeals decision ruled that Zarxio (filgrastim-sndz), its biosimilar version of Amgen's Neupogen, would be blocked from the market until September because of patent infringement. Nonetheless, despite this ruling and lackluster sales for Q2 2015, Novartis' 2015 outlook has not changed, according to the company. The company is expecting overall 2015 sales increases in the mid-single digit range and operating profit growth around the high-single-digit mark.
- Pharma Times Strong dollar, sluggish Alcon drag on Novartis' Q2