Novartis shares have shot up this morning as the Swiss drugs giant posted better-than-expected earnings for the first quarter.

Net profits rose 10% to $2.31 billion, boosted by the weak dollar and the successful implementation of the firm’s cost-cutting programme. Sales increased 9% to $9.91 billion, though were flat in local currencies.

Pharmaceutical revenues were up 6% (down 3% in local currencies) to $6.26 billion, ahead of Novartis’ own previous forecast. The result is pretty impressive given the generic competition in the USA the firm is suffering from.

The latter effect seriously impacted sales of blood-pressure-lowering drug Lotrel (almodipine/benazepril), which collapsed 73% to $95 million and epilepsy drug Trileptal (oxcarbazepine), down 57% to $90 million. Novartis is also still suffering from the the market withdrawal of the irritable bowel syndrome drug Zelnorm (tegaserod), sales of which were down 98% to just $2 million.

However there was much for the Basel-based group to be pleased about. The blood pressure lowerer Diovan (valsartan) put in a stellar performance, with sales up 11% to $1.4 billion, while Glivec/Gleevec (imatinib), for chronic myeloid leukemia and gastrointestinal stromal tumours, increased 20% to $888 million.

Femara (letrozole), an oral treatment for women with hormone-sensitive breast cancer “continues to outpace competitors and gained share in the aromatase inhibitor segment due to its unique benefits”, Novartis said, and sales were up 22% to $270 million. However, Femara recently lost patent protection in several European markets that could negatively impact growth. The acromegaly therapy Sandostatin climbed 5% to $269 million, based on increasing use of Sandostatin LAR, the long-acting once-monthly version that accounted for 85% of net sales.

Newer products are also selling well. The cardiovascular products Tekturna/Rasilez (aliskiren) and Exforge (amlodipine plus valsartan brought in $28 million and $72 million, respectively. Exjade (deferasirox), the first once-daily oral therapy for treating patients with iron overload, soared 55% to $109 million.

R&D-wise, Novartis comfirmed that it does not expect to resubmit Galvus (vildagliptin) in the USA until 2010. RAD001 (everolimus), a once-daily oral inhibitor of the mTOR pathway, is on track for its first oncology regulatory submission in the second half of 2008, while filings for FTY720 (fingolimod), which has the potential to become the first oral therapy for multiple sclerosis, are expected at the end of 2009.

Chief executive Daniel Vasella said he was “especially pleased with the dynamic growth of vaccines and diagnostics”, sales of which were up 21% to $280 million, and the new products in pharmaceuticals. He added that the recently-announced plans to acquire majority ownership of Alcon for $39 billion “will create a new growth platform with the world leader in eye care” and he predicted that Novartis will once again achieve record sales and earnings in 2008.

The initial response to the results from analysts was positive and Novartis’ share price has risen accordingly. At 9.50am, the stock was up 4.8% to 50.70 Swiss francs.