Novartis maintained strong innovation momentum in second quarter

NovartisNovartis Group net sales increased 2% (+2% cc) to USD 14.6 billion in the second quarter. Growth products contributed USD 4.7 billion or 32% of Group net sales, up 18% (USD) over the prior-year quarter. Group operating income increased 6% (+11% cc) to USD 3.1 billion. Currency had a negative impact of 5 percentage points, primarily due to the stronger Swiss franc and weakening of emerging market currencies, partly offset by a stronger euro.

Pharmaceuticals net sales reached USD 8.2 billion (+1%, +1% cc) with volume growth of 5 percentage points and a positive price impact of 2 percentage points, partly offset by generic competition (-6 percentage points). Sales growth was impacted by Japan, which saw a continued decline in Diovan sales and a biennial price cut for many brands. In the US, Diovan monotherapy inventory destocking ahead of the generic entry in July 2014 also impacted sales. Growth products generated USD 3.4 billion of division net sales, growing 15% (cc) over the same period last year. These products - which include Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, the COPD (chronic obstructive pulmonary disease) portfolio and Jakavi - contributed 42% of division net sales, compared to 36% in the 2013 quarter.

Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "Novartis delivered solid financial performance with core margin expansion in the second quarter and first half. Pharmaceuticals, in particular, showed improved productivity, driving core operating leverage for the Group. We also made significant progress on innovation across the portfolio, reaching milestones such as FDA approval for Zykadia in ALK+ non-small cell lung cancer, FDA Fast Track designation and rolling submission for LCZ696 in chronic heart failure, CHMP recommendation for Simbrinza in glaucoma, and FDA Breakthrough Therapy designation for CTL019 in acute lymphoblastic leukemia. These innovation milestones reinforce the growth prospects of our leading businesses."

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2013, the Group achieved net sales of USD 57.9 billion, while R&D throughout the Group amounted to approximately USD 9.9 billion (USD 9.6 billion excluding impairment and amortization charges). Novartis Group companies employ approximately 135,000 full-time-equivalent associates and sell products in more than 150 countries around the world.

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