Novartis Warns Profit Could Fall This Year Due to Increased Spending on Entresto
July 19 2016 - 2:25AM
Dow Jones News
By Denise Roland
Swiss pharmaceutical giant Novartis AG cautioned that its profit
could fall this year due to heavy investment in its new
heart-failure drug Entresto, after reporting a drop in net profit
in the second quarter due to currency headwinds.
The company said net income was $1.81 billion in the three
months to June 30, 3% lower than in the year- earlier period. Core
net income, a measure which strips out one-time gains or losses,
fell 5% to $2.9 billion, while revenue dipped 2% to $12.5 billion.
Analysts expected core net income of $2.8 billion and revenue of
$12.3 billion. Stripping out the effect of the strong dollar, net
income and sales were flat, and core net income was down 2%.
Basel, Switzerland-based Novartis lowered its guidance slightly
for the year to say that core operating income could decline by a
low single percentage digit due to increased spending on the
company's new heart failure drug Entresto.
Novartis is relying heavily on Entresto, along with another new
drug Cosentyx, for psoriasis, to offset revenue lost from cancer
drug Gleevec, which has faced generic competition since February
this year.
Write to Denise Roland at denise.roland@wsj.com
(END) Dow Jones Newswires
July 19, 2016 02:10 ET (06:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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