said its first-quarter earnings rose 32% while sales gained 13%. At that rate, the company will produce record sales and earnings this year, according to Daniel Vasella, the chairman and CEO of the Swiss drug giant.
For the three months ended March 31, Novartis earned $1.96 billion, or 83 cents a share, on revenue of $8.3 billion. For the same period last year, it earned $1.48 billion, or 63 cents a share, on revenue of $7.34 billion.
Earnings beat the 72-cent consensus of three analysts polled by Thomson First Call. Revenue was slightly below the consensus estimate of $8.59 billion.
Tim Anderson of Prudential Equity Group said the lower-than-expected sales were partly because of foreign-exchange rates, but reduced spending and a one-time boost from a pair of divestitures in February "more than made up for the shortfall." Anderson has an overweight rating on Novartis. He doesn't own shares, and his firm doesn't have an investment-banking relationship.
Anderson has a $58 price target. By late morning Monday, Novartis' stock was off 22 cents to $57.02.
Novartis predicted high-single-digit net sales growth for 2006 vs. last year, plus "record levels of operating and net income." The company didn't provide specific figures. The full-year sales prediction excludes "unforseseen events," as well as the integration of Chiron. Last week,
Novartis paid $5.4 billion for the 56% stake it didn't own in Chiron, a maker of vaccines, pharmaceuticals and blood-testing products.
Among its major products, Novartis said sales of its blood-pressure drug Diovan rose 16% to $939 million. The cancer treatment Gleevec gained 18% to $559 million, and sales of Zometa, for cancer-caused bone pain, rose 10% to $319 million. Sales of the cancer drug Femara rose 33% to $152 million, and the hypertension drug Lotrel advanced 28% to $295 million.
Lamisil, for fungal nail infections, saw its revenue decline 17% to $200 million. Sales for Elidel, for the skin disease eczema, were down 54% to $48 million, and revenue from Visudyne, for the eyesight-robbing disease wet age-related macular degeneration, dropped 10% to $107 million.
Sales of Lamisil were hurt by generic competition in some European markets. Elidel came under pressure because the Food and Drug Administration required a black box warning -- the agency's strongest alert -- about long-term cancer risks. Visudyne, sold in collaboration with the drug's developer,
, was affected by competition.
Novartis added that several experimental products are now before U.S. or European Union regulators. The diabetes drug Galvus was accepted for review by the FDA in March, and Novartis expects to submit an application to the EU this year. An application for the blood-pressure drug Rasilez was accepted by the FDA earlier this month, and an EU application is planned for this year.
Exforge, a pill containing two blood-pressure medications, was submitted to the EU last month. A U.S. application is planned for later in 2006.