Switzerland's Novartis (NVS) said on Tuesday that second-quarter earnings fell by 3%, slightly less than expected, as revenue declined by 2% to $12.47 billion.
The pharmaceuticals company, which had beaten consensus expectations in only one of the previous four quarters, said earnings per share fell to $1.23. That was slightly above the $1.19 Bloomberg consensus, while the revenue figure compared with a forecast of $12.2 billion. On a constant currency basis sales were flat, while earnings per share fell by 1%.
Core net profit fell 5% to $2.93 billion.
The company, which is led by CEO Joe Jiminez, is battling with falling sales of its Gleevec cancer drug, which had its first full quarter generic competition, while its new heart drug Entresto, among a handful that it is relying on, has had a disappointing start in the U.S. In the four quarters to the first quarter, Novartis' earnings have slipped on average by 1.98%, according to Zacks.
Novartis said Entresto grew steadily in the second quarter, pulling in $32 million of revenue, while Cosentryx, a new drug for psoriasis, "grew strongly," clocking up $260 million of sales.
It said net sales in 2016 will be "broadly in line" with last year's, while core operating profit is expected to be either stable or decline in the mid-single digits, dependent on how much it spends on Entestro and on what it calls the "Gleevec erosion curve."
Novartis this year announced plans to separate its cancer unit from the rest of the pharmaceuticals business along with the departure of head of pharmaceuticals, David Epstein.
The restructuring highlighted the importance of oncology to Novartis following the integration of the cancer drugs it acquired from GlaxoSmithKline (GSK) as part of a near-$20 billion asset-swap last year in which Novartis handed the U.K. company its vaccines.
Novartis is also attempting to revive its flagging Alcon eyecare business. On January it said it would refine Alcon's focus to surgical and vision care, while moving ophthalmic drugs to its pharmaceuticals division. Quarterly Alcon sales fell 2% to $1.5 billion, Novartis said on Tuesday.
Jefferies analysts expect Novartis to spend up to $5 billion on bolt-on purchases in cancer and elsewhere. After a Novartis investor event in May the analysts also pointed to a potential "mega bolt-on" worth $15 billion to $20 billion, potentially funded by selling its stake in Roche, Alcon or its consumer drugs joint venture with GlaxoSmithKline.
Novartis shares closed on Monday up 0.1% at Sfr80.45. They have slipped 18% in the past year, while GlaxoSmithKline has gained 29%.