Swiss drug maker Novartis (NVS) revealed a 47% drop in its fourth-quarter profit on Wednesday, as high costs related to ending certain clinical trials, manufacturing problems and layoffs squashed margins.
The company said it earned $1.21 billion, compared with $2.32 billion a year ago, on sales of $14.78 billion, which were up 4% year-over-year.
Analysts were looking for a profit of $1.28 a share on sales of $14.83 billion.
Pharmaceutical sales in the fourth quarter were $8.3 billion, beating average analyst estimates of $8.18 billion. The company reported a core operating income margin of 24%.
The drug giant took a $900 million charge in the fourth quarter after halting clinical trials of hypertension drug Tekturna after it was found to cause increased complications in patients already taking other hypertension drugs.
The company also faced manufacturing problems during the quarter that led to the recall of several over-the-counter drugs in the U.S. earlier this month, leading to the closure of its plant in Lincoln, Nebraska. The temporary production halt led to a $115 million charge.
Novartis, which faces patent expiration of top-selling drug Diovan this year, says it still expects 2012 revenues to be in line with last year. The company received 19 regulatory approvals in 2011, including for 16 new drugs.
However, it anticipates a slightly lower core operating income margin in 2012 because of generic competition and price erosion.