Strong sales performance in pharmaceuticals and Alcon

NovartisNovartis net sales declined by 2% (-1% cc) to USD 13.7 billion. Currency negatively impacted sales by 1% due to the strengthening of the dollar against many currencies. Products launched since 2007 drove the Group to strong volume growth of 5 percentage points versus the previous year. These recently launched products now represent 28% of Group sales (up from 24% a year ago) and grew 16% in the first quarter, offsetting the negative impact of generic competition mainly to Diovan and Femara (-3 percentage points), lower production volume in Consumer Health (-2 percentage points) and price (-1 percentage point, including enoxaparin).

Pharmaceuticals saw net sales growth of 2% (+3% cc) to USD 7.8 billion, as very strong volume growth of 9 percentage points more than offset the effect of generic entries of 6 percentage points. Pharmaceuticals products launched since 2007 generated USD 2.6 billion of net sales, growing 33% (+35% cc) over the same period last year. These products - which address medical needs across a range of therapeutic areas and include Lucentis, Tasigna, Afinitor and Gilenya - now represent 33% of division sales, compared to 26% in the same period last year.

Alcon net sales of USD 2.5 billion rose 5% (+6% cc), led by strong growth in Surgical of 9% (+10% cc). Ophthalmic Pharmaceuticals sales grew 5% (+6% cc) while Vision Care grew 1% (+2% cc). Growth versus the prior year was dampened slightly by the inclusion in 2011 of certain lens care products divested at the end of the first quarter last year.

Sandoz net sales declined 10% (-8% cc) to USD 2.1 billion, against a very strong first quarter last year. Price erosion was 8 percentage points, mainly due to increased competition for enoxaparin, while volume growth was flat as declines in the US and Germany were offset by double-digit growth in Western Europe, Asia and biosimilars.

Vaccines and Diagnostics net sales were down 19% (-18% cc) to USD 299 million, mainly due to an exceptionally strong first quarter in 2011, which benefited from the release of bulk pediatric shipments.

Consumer Health - which comprises OTC and Animal Health - declined 20% (-18% cc) in the first quarter of 2012 to USD 932 million, impacted by the suspension of production at the Lincoln site.

Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "Novartis Pharmaceuticals and Alcon Divisions delivered strong growth and operating leverage in the first quarter. Group net sales performance was impacted by Sandoz, which was up against a strong year-ago base with enoxaparin exclusivity, and by Consumer Health, which was impacted by the suspension of production at the Lincoln, Nebraska manufacturing site. We are making progress remediating the quality issues at the Lincoln site, as well as the three Sandoz production sites. Importantly, we had excellent pipeline news, including strong Phase III results on QVA149 in COPD. We are pleased with the outcome of the safety review on Gilenya and expect to see continued strong sales growth."

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 and diagnostic tools, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2011, the Group's continuing operations achieved net sales of USD 58.6 billion, while approximately USD 9.6 billion (USD 9.2 billion excluding impairment and amortization charges) was invested in R&D throughout the Group. Novartis Group companies employ approximately 124,000 full-time-equivalent associates and operate in more than 140 countries around the world.

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