Despite losing patent protection on Diovan in the United States in September 2012, the Basel-based firm has been spared competition from cheaper rivals as India’s Ranbaxy Laboratories Ltd struggled with quality control issues at manufacturing sites.
The Swiss drug maker earned about $100 million for each month of delay to a generic competitor for Diovan. But Ranbaxy was granted approval to launch a copycat version at the end of June, meaning Novartis will now face the full brunt of competition.
Second-quarter sales came in at $14.64 billion, falling slightly short of the average forecast for $14.72 billion in a Reuters poll. A solid performance at Novartis' generics business Sandoz and eyecare unit Alcon, where sales raised 4 percent and 3 percent respectively, helped offset more muted sales growth at its pharmaceutical business, where sales were up 1 percent. The pharmaceutical business was hit by bi-annual price cuts on medicines in Japan.
Core earnings per share increased 4 percent to $1.34, in line with expectations. The Basel-based firm confirmed its guidance for sales to grow in the low-to-mid-single digit percentage range this year in constant currencies, while core operating income is expected to grow at a mid-to-high single digit rate.