Novartis AG, Europe's second-biggest drugmaker by market value, said today tha fourth-quarter earnings growth stalled and sales rose less than analysts expected because of costs from a failed experimental drug and recent purchases.

Novartis headquarters, Basel, Switzerland

 

Net income totaled $1.35 billion, or 58 cents a share, Basel, Switzerland-based Novartis said. Analysts had expected earnings of $1.43 billion. Sales rose 14 percent to $8.66 billion.

Chief Executive Officer Daniel Vasella had invested about $13 billion on acquisitions last year including Hexal AG and vaccine maker Chiron Corp. to reduce dependence on Diovan, a 10-year-old drug. Novartis is planning to request regulators to approve two new products this year that analysts estimate may bring in more than $1 billion each.

``We gained market share and concluded strategic acquisitions to strengthen our leadership position,'' Vasella said in the statement. ``We are confident of delivering in 2006 another year of dynamic growth with record sales and earnings.''

Novartis highlihghts in 2005

• Group full-year net sales up 14% in USD (+13% lc) thanks to dynamic expansion of Novartis Pharmaceuticals and Sandoz, the latter supported by acquisitions
• Pharmaceuticals continues to gain market share, net sales rise 10% (+9% lc) based on excellent performances from strategic products
• Group operating income rises 10%, while Pharmaceuticals advances 12% through productivity gains and the operating margin rises 0.7 percentage points to 29.7%
• Net income up 10% to USD 6.1 billion and EPS rises 11% to USD 2.63 per share
• Free cash flow advances 42% to USD 4.7 billion
• Proposed dividend for 2005 increased 10% to CHF 1.15 per share
• Novartis preparing important submissions for 2006: Galvus (formerly LAF237, type 2 diabetes), Rasilez (formerly SPP100, hypertension) and LDT600 (hepatitis B)