Novartis ( NVS) delivered a 23% gain in profits for the fourth quarter and promised that 2007 should be modestly better than last year. "I am confident of another year of record sales and earnings" this year, Dr. Daniel Vasella, chairman and CEO of the Swiss drug giant, said Thursday. Corporate sales should climb "at a mid- to high-single-digit rate" when measured in local currencies, the company said. Full-year sales of $37 billion grew 14% over 2005 based on local currencies. For the fourth quarter, Novartis earned $1.67 billion, or 70 cents a share, on revenue of $10.1 billion. Those figures, using a U.S. dollar comparison, represented a 21% rise in earnings per share and a 16% advance in revenue from the same period in 2005. Novartis earned $7.2 billion, or $3.06 a share, for all of 2006, up from a profit of $6.14 billion, or $2.63 a share, the previous year. Novartis was the sixth-biggest seller of prescription drugs in the U.S. in 2005, according to the medical data firm IMS Health. Despite anticipating solid growth from veteran drugs, Novartis will be paying more attention to experimental drugs in the coming months. The company expects to hear from U.S. or European Union regulators on several products, including treatments for hypertension and diabetes, that analysts say could be big sales sources.
Novartis expects a ruling from the Food and Drug Administration in February on Galvus for diabetes and in March on Tekturna for high blood pressure. The FDA recently approved Exforge, which combines the company's biggest-selling drug, Diovan, with amlodopine besylate, the ingredient in Pfizer's ( PFE) popular blood-pressure pill Norvasc. Novartis expects to begin marketing Exforge in late September after the U.S. patent on Norvasc expires. The EU approved Exforge Wednesday, and the drug will reach the market depending on Norvasc patent expirations in different countries. Analysts say Galvus could be a significant treatment for type 2 diabetes, a condition in which a person's body has trouble producing enough insulin or the body's cells have difficulty processing insulin. Novartis had hoped to hear from the FDA in November, but the agency said it
needed an extra 90 days. Galvus belongs to a new class of diabetes drugs called DPP-4 inhibitors. Merck's ( MRK) DPP-4 inhibitor, Januvia, was approved by the FDA in October. The FDA also requested a 90-day delay in its review of Tekturna, which Novartis is developing with the Swedish drugmaker Speedel. Tekturna would be the first in a new class of blood-pressure drugs called renin inhibitors. Novartis also could get a decision from U.S. regulators this year on applications for Tasigna, a treatment for certain forms of chronic myeloid leukemia, and Aclasta, for osteoporosis and the bone malady Paget's disease. Novartis expects a verdict soon from the FDA counterpart in the EU on Tasigna and Aclasta.
The EU also should rule on Lucentis for treating the eyesight-damaging disease called wet age-related macular degeneration. Lucentis is available in the U.S. from Genentech, ( DNA), which developed the drug. The prospects of multiple new-drug launches sent Novartis' expenses for sales and marketing up 19% last year. The company also had a lot of moving parts during 2006, including the acquisition of the 56% of Chiron that it didn't own and the sale of a nutrition business. Analysts speculate Novartis may seek a buyer for its Gerber baby-food division as it narrows its focus to prescription drugs, generic drugs, diagnostic products and vaccines. Among major products, Diovan recorded a 15% sales gain in 2006 to $4.2 billion. Sales of the cancer drug Gleevec rose 17% to $2.6 billion, and revenue from the blood-pressure medication Lotrel was up 26% to $1.4 billion. The bone-cancer-pain drug Zometa saw sales climb 4% to $1.3 billion. Sales of the fungal nail infection treatment, Lamisil, fell 13% to $978 million due to increasing generic competition in Europe. Lamisil will be hit by U.S. generics in mid-2007. Fast-rising products include the breast cancer drug Femara, which gained 33% to $719 million, and the irritable bowel syndrome drug Zelnorm, whose sales rose 34% to $561 million.