GENEVA (AP) — Swiss pharmaceuticals company Novartis says a key measure of its profits fell 3 percent in the second quarter, largely because of new generic competition for its top cancer drug, thought it expressed high hopes for a psoriasis drug that has turned out to be one of its best product launches ever.
The Basel-based giant reported Tuesday that net income from continuing operations was $1.81 billion, down from $1.86 billion in the year-earlier quarter. Net sales slipped to $12.5 billion from $12.7 billion a year ago.
Novartis said core operating profit for the full year was expected to be "broadly in line" or slightly down, depending largely on the slide in sales for the cancer treatment Gleevec amid generics competition, and increased spending for its Entresto heart failure drug that is expected to reap billions in sales.
"The second quarter was solid for Novartis and our innovation continues to deliver," CEO Joseph Jimenez told reporters in a conference call on Tuesday.
Core operating income dropped 7 percent, amid losses of the exclusivity on Gleevec in the United States, plus investments in innovation and a growth plan for its Alcon eye care unit.
Facing U.S. generic competition for Gleevec since Feb. 1, Novartis reported a 25 percent plunge in net sales for the drug during the quarter, to $891 million. The company's top-selling drug since 2012 has also come under political pressure: Authorities in Colombia announced last month that the South American country will force Novartis to lower prices of the drug in a closely followed patent dispute.
Entresto, meanwhile, was approved in the U.S. about a year ago and has faced high expectations to become a blockbuster. Sales have been disappointing, with uptake slow in part due to its $4,600 annual price in the United States.
However, Jimenez said new treatment guidelines in both the U.S. and Europe had recently endorsed the drug as a "standard of care for heart failure." He summarized a JAMA Cardiology report saying Entresto "could prevent or postpone more than 28,000 deaths per year in the U.S. alone."
"And on top of that, Entresto prescriptions in the U.S. have started to accelerate, showing a break in the trend line," he said.
Cosentyx, a treatment for psoriasis, psoriatic arthritis and ankylosing spondylitis (a form of spinal arthritis), posted "great, strong sales in the quarter" of $260 million, Jimenez said. "This is turning out to be one of the most successful launches in our history."
He said Novartis expects it will become a "multibillion-dollar drug — and most likely over $4 billion."