ZURICH—Novartis AG on Thursday reported a 10% rise in third-quarter net profit, helped by strong sales of generic drugs and a weaker dollar.
The Basel-based company said net profit for the three months to the end of September rose to $2.32 billion from $2.11 billion a year earlier, beating analyst expectations of $2.23 billion even as Novartis had to book a $590 million charge for the discontinuation of the development of two drugs.
Sales increased 13% to $12.58 billion from $11.09 billion on continued growth of Novartis’s flagship drugs such as Gleevec as well as the first-time inclusion of U.S.-based eye care company Alcon Inc.
While Novartis reiterated that excluding Alcon it will grow sales “at mid-to-high single digits,” the Swiss firm said that the inclusion of Alcon during the last four months of 2010 will bring sales to the “low- to mid-teens” range. Novartis said that “the inclusion of Alcon is expected to be slightly negative to operating income margin and slightly positive to core operating income margin.”
Novartis has recently won U.S. marketing approval for its multiple-sclerosis pill Gilenya, a drug that is expected to reach blockbuster status and could help its share price advance, something that may prove crucial in its attempt to full take over Alcon.
Novartis is offering Alcon minority shareholder 2.8 Novartis shares for one Alcon stock. While Alcon’s minority shareholders have so far balked at the offer, a higher Novartis share price could help stifle the current resistance, analysts say, adding that otherwise Novartis will have to lift its Alcon bid for the remaining 23% stake it doesn’t own.