Mixed fortunes in pharmas

Shares in Glaxo and AstraZenca fall as Swiss Novartis releases mixed report on earnings for 2008

Hemscott Editor | 20-10-08 | E-mail Article

Underpinned by what it sees as accelerating growth in pharmaceuticals, Swiss drug maker Novartis reported strong earnings year to date despite a large drop in profits over the past quarter. In its interim results the firm said it was on track for 2008 to be a record year in terms of net sales and earnings, however, net income over the third quarter saw a drop of 69% compared to the same period last year.

On the back of such news, UK pharmaceuticals experienced a difficult morning. As of 1:30pm today the share price of GlaxoSmithKline had fallen by 3.58% while AztraZeneca’s price had fallen by 0.77%, according to Hemscott data.

Novartis noted net income over the past quarter was negatively impacted by number of factors, the biggest of which was the removal of income from its discontinued operations. Discounting that, net income from its continuing businesses, focused on healthcare, rose 2% over the quarter.

Over the third quarter Novartis saw group net sales advance 12% led by strong growth in its pharmaceutical division and growth in vaccines and diagnostics.

Dr. Daniel Vasella, Chairman and CEO of Novartis said: "We have achieved strong results in the third quarter of 2008 despite significant volatility in the global economic environment. Despite the economic uncertainty in the world markets, Novartis is on track for another year of record results in 2008, continuing to build momentum by focusing on innovation and performance."

Despite its positive outlook, the pharmaceutical firm did announce it was to cut costs and try and expand further into emerging markets as a way to sustain profitability.

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