Correct: Novartis Second-Quarter Net Income $1.98 Billion, Beating Expectations

By Denise Rowland Features Dow Jones Newswires

Novartis AG reported a slight rise in second quarter net income, as proceeds from divestments helped offset its heavier investment into the launch of new drugs that it hopes will compensate the decline of its best-selling cancer drug Gleevec.

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The Basel, Switzerland-based firm said Tuesday that net income rose to $1.98 billion from $1.81 billion, while sales fell 2% to $12.24 billion. Analysts had expected Novartis to post net income of $1.83 billion and revenue of $12.26 billion.

The rise in net income was thanks largely to proceeds from product divestments in the quarter that increased other income to $480 million from $239 million the previous year.

Novartis's aging blockbuster drug Gleevec lost patent protection last year, allowing cheaper imitations to enter the market and erode sales. It is counting on two new drugs, Entresto for heart failure and Cosentyx for psoriasis and other inflammatory conditions, to fill the hole left by the decline of Gleevec, which at its peak generated nearly $5 billion a year.

Core operating income, a measure that excludes certain one-time gains and impairments, fell 3% to $3.24 billion in the quarter, versus analyst estimates of $3.12 billion.

Write to Denise Rowland at denise.roland@wsj.com

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Corrections & Amplifications

Story corrected at 06:50 GMT. The original incorrectly said analysts had expected Novartis to post core net income of $1.83 billion in the second paragraph.

(Analysts had expected Novartis to post net income of $1.83 billion and revenue of $12.26 billion. In addition, this version removes references to core net income and fixes the reporter's name. The net income was also rounded down. "Novartis Second-Quarter Core Net Income $2.87 Billion, Beating Expectations," at 0529 GMT, incorrectly said analysts had expected Novartis to post core net income of $1.83 billion in the second paragraph. The correct version follows: )

Novartis AG reported a slight rise in second quarter net income, as proceeds from divestments helped offset its heavier investment into the launch of new drugs that it hopes will compensate the decline of its best-selling cancer drug Gleevec.

The Basel, Switzerland-based firm said Tuesday that net income rose to $1.98 billion from $1.81 billion, while sales fell 2% to $12.24 billion. Analysts had expected Novartis to post net income of $1.83 billion and revenue of $12.26 billion.

The rise in net income was thanks largely to proceeds from product divestments in the quarter that increased other income to $480 million from $239 million the previous year.

Novartis's aging blockbuster drug Gleevec lost patent protection last year, allowing cheaper imitations to enter the market and erode sales. It is counting on two new drugs, Entresto for heart failure and Cosentyx for psoriasis and other inflammatory conditions, to fill the hole left by the decline of Gleevec, which at its peak generated nearly $5 billion a year.

Core operating income, a measure that excludes certain one-time gains and impairments, fell 3% to $3.24 billion in the quarter, versus analyst estimates of $3.12 billion.

Write to Denise Roland at denise.roland@wsj.com

(END) Dow Jones Newswires

July 18, 2017 02:47 ET (06:47 GMT)