Swiss drugmaker Novartis AG raised its full-year forecast for drug sales today, betting on income from cancer and heart medicines after second-quarter net profit met expectations.
Novartis, which faces loss of exclusivity on its top-selling blood pressure drug Diovan in 2012, now sees sales in local currencies at its drugs unit growing at a high single-digit rate.
It had previous forecast growth in the mid-to-high single digits.
The strong results follow forecast-beating numbers from diversified health care group Johnson & Johnson, but contrast with disappointing sales and outlook from US drugmaker Abbott Laboratories.
The pharma unit is Novartis' largest business, where sales rose 3% to $7.1 billion, some two thirds of the group total. Novartis confirmed previous group guidance for sales growth in 2009 at a mid single-digit rate.
The pharmaceuticals sector initially coped better than many others with recession but has recently begun to under-perform, hit by prospects of more competition, problems getting new drugs to market and cheaper medicines from generics manufacturers.
The prospect of US health reform - and hence cheaper medicines - has also pressured the sector and Novartis said it expected the impact on its business to be 'moderate but manageable'.
Novartis' second-quarter net profit fell 10% to $2 billion due to the stronger dollar and higher financing costs and the group repeated an earlier warning that currency-related losses could hit full-year profit.