Novartis has posted a reasonable set of results for the third quarter this morning, but the financials have been overshadowed by the news that the Swiss major is to shed 2,000 jobs.
The company's latest "cost reduction activity" will be executed over three to five years, will result in the closure of two sites in Switzerland and one in Italy, and its development activities at home and the USA will be restructured. Novartis is also relocating some research activities from Switzerland to the USA.
About 1,100 jobs will go in Switzerland, and the other 900 will be lost in the USA. The losses will be offset by 700 new positions "in low cost and other countries", notably China and India.
Chief executive Joseph Jimenez said that "to strengthen our future, we have accelerated actions to reduce our cost base over the next few years". A restructuring charge of around $300 million will be taken in the fourth quarter in respect of these initiatives.
Back to the numbers and Novartis noted that net profit was up 12% to $3.54 billion, while sales reached $14.84 billion (+18%). Pharmaceutical turnover rose 9% to $8.16 billion.
Novartis' biggest-seller was once again the blood pressure lowerer Diovan (valsartan), though sales were down 4% to $1.43 billion, due to generic competition. Turnover from Glivec/Gleevec (imatinib), for chronic myeloid leukaemia and gastrointestinal stromal tumours, was up 13% to $1.14 billion, while the successor to Glivec, Tasigna (nilotinib), also approved for CML, contributed $186 million, up 71%.
Femara (letrozole), for women with hormone-sensitive breast cancer, fell 47% to $182 million, due to generic competition, while Zometa (zoledronic acid) for cancer complications inched up 2% to $370 million. Turnover of the acromegaly therapy Sandostatin (ocreotide) rose 15% to $367 million.
As for Novartis’ newer products, the cardiovascular drug Exforge (amlodipine plus valsartan) brought in $317 million, up 43%, while Exjade (deferasirox), for treating patients with iron overload, was up 15% to $210 million. The antihypertensive Tekturna/Rasilez (aliskiren) leapt 41% to $159 million.
Other highlights were the sales of Lucentis (ranibizumab) for the treatment of age-related macular degeneration, which shot up 29% to $515 million, while kidney cancer drug Afinitor (everolimus) brought in $118 million, up 76%. Turnover from Galvus (vildagliptin) for type 2 diabetes soared 79% to $181 million, while Novartis’ new oral multiple sclerosis drug Gilenya brought in $153 million.
Mr Jimenez (pictured) added that "the breadth of our business and product portfolio allowed us to deliver strong financial results and operating leverage, as well as significantly advancing the pipeline in the quarter".