Susanne SchaffertThe information presented in this conference call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Please refer to the company's Form 20-F on file with the Securities and Exchange Commission for a description of some of these factors. Joseph Jimenez Thanks. Okay. Starting on Slide #5. As you saw in the press release, our sales increased 1% in constant currencies versus year ago with our new product growth more than offsetting the loss from the Diovan patent expiration in Europe. Our core operating income was down 3% in constant currency with good operating leverage coming from the Pharma and the Alcon business, offset by Sandoz and Consumer Health. News really, though, in the quarter was innovation. This quarter, we achieved 8 significant regulatory milestones, further proving that our R&D group is delivering. And I'm going to talk more about the specifics of it later, but I think it's important because it strengthens our future growth prospects. On Slide 5, you can see an overview of the financials for the quarter and, down at the bottom, core EPS of $1.38. So we are continuing to execute well against our 3 priorities of extending our lead in innovation, accelerating growth and driving productivity. And I want to just touch on each of those in terms of the quarterly performance. So starting on Slide #7, innovation. Of the 8 regulatory milestones, 5 were in Pharmaceuticals in the second quarter and include 3 new molecules. But I think one of the most exciting was Afinitor for hormone-sensitive breast cancer. The positive CHMP opinion means that we will -- we are ramping up to get ready for the launch of Afinitor in breast cancer. Also, Jakavi for myelofibrosis. Seebri Breezhaler is important from a respiratory standpoint, which is our once-daily long-acting muscarinic for COPD.
Alcon, on the next slide, you can see also had a good quarter from an innovation standpoint. Toric multifocal advanced intraocular lenses received EU approval. And Dailies Total 1, which is our best-in-class silicone hydrogel daily disposable lens, received U.S. FDA approval.Now I think further evidence that our R&D group is differentiated from the industry is this rejuvenation index for 2012, which is shown on Slide 9. It looks at the percent of sales from drugs that are launched since 2007 across our competitors. And you can see that we lead the industry. And I think the regulatory milestones that we delivered in the second quarter will strengthen this further. Our goal here is to maintain the right balance between profit delivery today and investment for growth in the future. And with the approvals that we received in Q2, particularly Afinitor, I think it will be a mistake not to optimize future growth opportunities as they are in front of us. So we're, therefore, going to invest up to an additional $300 million in measures such as optimizing sales and marketing spending for these launches and development projects. So this won't change our outlook for the year. Jon is going to recalibrate what this means specifically for the balance of the year. Now if you look at emerging markets, our sales as a company were up 6% versus year ago in the quarter, and Alcon led that with sales growth of 14%. Within the emerging markets, China was the fastest-growing market. Actually, it was our fastest-growing market globally, up 23% versus year ago. And we also had some good news in the first half of the year in China with the approval of Lucentis and also the approval of Onbrez. So I think this is going to result in continued positive momentum in China for the company.
Also in terms of growth format, a very strong quarter, with sales up 4% in constant currencies. This is driven by some double-digit performance of these key launch products. Lucentis was up 20%. It continues to perform very strongly. Galvus, for type 2 diabetes, grew an impressive 47%. And remember, this is all x U.S. in for Galvus. And Afinitor is ready to, I think, take the growth level to the next level with the upcoming approvals in advanced breast cancer.Alcon also continues to deliver solid growth. Surgical and Pharmaceuticals grew nicely, but even embedded in their growth rate of 5% was a 6-point decline in the allergy pharmaceuticals. So because we're up against a week allergy season, that suppressed the growth a little bit. But some importance points here. If you look on the right-hand side of the slide, we had an excellent launch of Dailies Total 1 in a number of European markets, this silicone hydrogel daily disposable achieving more than a 40% share in the first 6 months. And as I said earlier, we received approval to Dailies Total 1 in the U.S. Now as expected, the increased competition on enoxaparin in the U.S. weighed heavily on Sandoz sales performance. Sales were down 7%. But there are several strong underlying growth drivers in Sandoz. So our biosimilars business was up almost 40% in the quarter, and Western Europe outgrew its market by almost 10 percentage points. And also, Sandoz will become the #1 global leader in generic dermatology once we close the Fougera acquisition, which we received [indiscernible] approval on just a while ago. Read the rest of this transcript for free on seekingalpha.com