says double-digit sales and profit gains for the first quarter have it on track to post its best full-year results ever.
"I am pleased with the strong start," Dr. Daniel Vasella, the chairman and CEO of the Swiss drug giant, said Monday. "I am confident of another year of record sales and earnings in 2007."
For the three months ended March 31, operating profit from continuing operations was $2.4 billion on revenue of $9.6 billion. That represents a 19% improvement in sales and an 18% increase in earnings based on a comparison using U.S. dollars.
Continuing operations exclude a dietary nutrition business sold in February 2006 and a medical nutrition business whose sale was announced in December. The deal is expected to close during the second half of this year.
On a reported basis, Novartis earned $2.17 billion, or 92 cents a share, on revenue of $9.82 billion. For the year-ago first quarter, it earned $1.97 billion, or 83 cents a share, on revenue of $8.3 billion.
The most recent quarter's results include the Gerber baby food business, which is being sold to
for $5.5 billion. Future financial reports will cite Gerber as a discontinued operation.
"We have now completed the divestments of noncore businesses as part of our long-term strategy to focus on healthcare, and we will continue to invest vigorously into R&D," Vasella said.
Novartis reaffirmed its full-year sales guidance, which it had revised March 30 after the Food and Drug Administration said the irritable bowel syndrome drug Zelnorm should be suspended because of concerns about cardiovascular risks.
Although it disagreed with the FDA, Novartis has pulled the drug, vowing to seek a way to return it to the market. Removing Zelnorm from the U.S. knocked $600 million off full-year sales guidance. The revised projection calls for corporate revenue growth of "above 5%." The previous forecast was "mid- to high-single digits."
Worldwide sales of Zelnorm slipped 3% to $105 million in the first quarter when measured in local currencies. Seven other countries have halted sales. The drug had been available in about 50 countries.
Among major products, the blood-pressure drug Diovan had worldwide sales of $1.15 billion, up 20% when measured in local currencies, while the cancer treatment Gleevec advanced 16% to $674 million. Another blood pressure drug, Lotrel, posted a 20% sales gain to $314 million. Sales of the bone cancer-pain drug Zometa declined by 4% to $314 million.
The Sandoz generic-division recorded sales of $1.7 billion, up 12% when measured in local currencies, while sales from continuing operations among consumer health products gained 6% to $1.72 billion.