US problems hit Novartis
pharmafile | January 17, 2008 | News story | Sales and Marketing |Â Â genericsÂ
The entry of three generic competitors and the withdrawal of irritable bowel drug Zelnorm wiped billions off Novartis' revenues in 2007, and are set to undermine performance in the first half of this year as well.
Blood pressure combination drug Lotrel, anti-fungal Lamisil and epilepsy drug Trileptal all suffered at the hands of new US generic competitors and, combined with Zelnorm, represented a fall in revenue of nearly $4 billion over the year.
Despite the problems in its most important business sector, the Swiss company recorded total sales growth of 8% (3% in local currencies), thanks to solid pharma growth outside the US and in its generics division Sandoz.
The company's vaccines and diagnostics division enjoyed the greatest growth in 2007, with sales rising by over 50%, but remains a modest contributor to the group, with total revenues of $1.5 billion.
Chief executive Daniel Vasella admitted that the company would have a further $1.4 billion in revenues lost to US generic competition to overcome in the first half of the year before the outlook would improve.
The company expects low single digit growth for the whole pharma division, and its new head Joe Jimenez says the first half of the year will be particularly tough.
Formerly head of Heinz's European operations and with experience in private equity, Jimenez's immediate priority is to maximise cost savings already underway and to inject fresh ideas into the marketing of its products.
Novartis launched a record eight products last year, including Exforge (a 2-in-1 blood pressure combination of Diovan and amlodipine) and first-in-class hypertension drug Tekturna/Rasilez.
While Exforge has performed well, Tekturna has made less headway into the market, earning just $40 million since its launch in March.
The company is hoping the forthcoming launch of Tekturna HCT, a combination of the drug with a commonly prescribed diuretic, will help increase its uptake.
The company's diabetes treatment Galvus is still being held up with US regulators over safety concerns, but is now ready for launch across Europe, following quickly behind another new launch, leukaemia drug Tasigna.
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