Novartis 2Q net slips as generic drug competition hits sales

Novartis has managed to maintain sales in the second quarter of the year, despite facing the first full quarter of generic competition to cancer blockbuster Gleevec in the US.

Net sales from continuing operations declined 2 percent to $12.47 billion from $12.69 billion in the prior year, while it was flat at constant currencies.

The drug is considered to have enormous potential, with annual sales expectations of $5 billion or more.

Revenue guidance was held steady however, as sale would be broadly in line with 2015.

Having previously said it would be broadly in line with past year, the group updated guidance to say core operating income would fall by a low single digit.

Chief Executive Joe Jimenez told reporters Novartis needed to capitalize on this by spending $200 million more to market the drug in the second half.

“Performance in Q2 was solid despite a full quarter of Gleevec loss of exclusivity impact in the USA”, chief executive Joseph Jimenez said in a statement, referring to Novartis-developed imatinib used in the treatment of several cancers, including certain types of leukaemia, that went off patent in the United States in January 2015.

The heart-failure drug, which launched a year ago, got off to a slow start, reflecting doctors’ hesitation to switch stable patients onto a new medicine and delays in securing reimbursement from health insurers in the U.S.

Facing U.S. generic competition for Gleevec since February 1, Novartis reported a 25 percent plunge in net sales for the drug during the quarter. He summarized a JAMA Cardiology report saying Entresto “could prevent or postpone more than 28,000 deaths per year in the USA alone”.

However, Jimenez said new treatment guidelines in both the US and Europe had recently endorsed the drug as a “standard of care for heart failure”.

He said Novartis expects it will become a “multibillion-dollar drug – and most likely over $4 billion”. Its sales reached $32 million during the second quarter, during which sales of Cosentyx was $260 million.

Novartis fell 0.9 percent to 79.70 Swiss francs at 11:28 a.m.in Zurich.