Novartis Q1 profit slips as spending on Alcon, Entresto weighs

Novartis Chief Executive Joe Jimenez predicted biosimilar discounts of up to 75 percent

ZURICH: Novartis said on Tuesday its first-quarter core net income fell 4% as the Swiss drugmaker's spending to kick start sales at its eyecare unit Alcon and for its heart failure drug Entresto weighed on earnings.

Core net income fell to US$2.69 billion, Novartis said, beating the US$2.67 billion average estimate of analysts in a Reuters poll. 

Sales fell 1% to US$11.54 billion, compared to the US$11.6 billion average estimate in the poll.

The company confirmed its 2017 outlook, with core operating income expected to be broadly in line with last year or to decline at a low-single-digit rate.

Chief executive Joe Jimenez has called 2017 another transition year for the Basel-based drugmaker as it spends on Alcon to arrest a sales slump and on slow-starting Entresto, while absorbing falling revenue from its patent-expired cancer drug Gleevec.

Jimenez is counting on new medicines including recently launched breast cancer drug Kisquali, psoriasis drug Cosentyx and Entresto to help restore growth at Novartis next year.

"We had a solid start to the year," Jimenez said on a call. "We're investing heavily in the growth drivers." 

Entresto first-quarter sales hit US$84 million, just shy of the average analyst estimate of US$85 million.

Cosentyx sales more than doubled to US$410 million in the quarter.

Meanwhile, Gleevec sales fell 35% to US$544 million, compared to the expected decline to US$551 million.

At US$1.4 billion Alcon sales fell 1% in dollar terms but returned to growth in constant currencies, with vision care products including contact lenses leading the way.

Jimenez said that a strategic review of the Alcon division for a possible spin off was continuing, with a status update set for late 2017. - Reuters