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Sales Advance at Novartis

Earnings, however, are unchanged after a fourth-quarter charge.
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Swiss drugmaker


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said fourth-quarter net revenue climbed 14% in U.S. dollars, with the company's Sandoz generics unit generating the biggest sales improvement, thanks to last year's acquisitions of Eon Labs and Hexal.

Total sales climbed to $8.66 billion in the quarter from $7.58 billion last year. Novartis earned $1.35 billion, or 58 cents a share, essentially unchanged from the year-ago quarter. However, the company recorded an impairment charge of $266 million in the 2005 fourth quarter after it ended development work on an experimental cholesterol treatment known as NKS104. Novartis didn't provide a profit figure that excluded the charge.

Sales fell short of the $8.78 billion consensus estimate of three analysts surveyed by Thomson First Call. Novartis' American depositary shares were losing $1.53, or 2.7%, to $54.72 Thursday following the earnings report.

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Pharmaceuticals sales rose 6% to $5.25 billion in the fourth quarter, while sales at Sandoz jumped 81% to $1.57 billion, reflecting the addition of the two companies Novartis joined with the division in 2005.

Net sales in the U.S. climbed 14% to $2.2 billion, fueled by growth in the drugs Diovan, Lotrel, Gleevec, Femara and Zelnorm. In Europe, net sales fell 2% in dollars, but rose 6% in local currencies. Net sales in Japan, the world's second-largest pharmaceutical market, dropped 3%, but when calculated in yen actually advanced 8%.

Novartis also said it hopes to complete the acquisition of the 56% stake in


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that it doesn't own in the first half of this year. Novartis has received U.S. regulatory approval to acquire Chiron, in which it already holds a 44% interest. The company said it expects additional regulatory clearances soon.

For 2006, Novartis is projecting "high-single-digit" net sales growth in local currencies, while pharmaceuticals sales should rise in the "mid-to-high single digits." The company also foresees "record" levels of operating and net income this year.