Novartis reports 9% rise in net sales, 19% decline in U.S. pharmaceutical net sales in first quarter

BASEL, Switzerland — Novartis reported $9.9 billion in net sales for the first quarter of 2008, a 9% increase over net sales in the first quarter of 2007, the company announced in a press release.

Pharmaceutical net sales declined 3% to $6.3 billion in the first quarter, primarily due to a 19% sales decline in the United States caused by the negative influence of generic competition, the release said.

Operating income for the first quarter rose 7% to $2.5 billion, an increase the company attributes to new product launches, late-stage development projects and expansion into emerging markets. In addition, currency movements had a net positive impact of approximately $185 million, according to the release.

Net income for the first quarter rose 10% to $2.3 billion, based on business growth, productivity programs, higher levels of income from associated companies and net financial income.

Basic earnings per share for the first quarter rose to $1.02, up 15% from $0.89 in the first quarter of 2007 — a spike the company attributes to a reduced level of outstanding shares.

Earlier this month, Novartis reached an agreement with Nestlé S.A. providing the right to acquire majority ownership of Alcon in two steps. The first step — expected to finalize in the second half of 2008 — involves Novartis' purchase of a 25% stake in Alcon from Nestlé for approximately $11 billion. The second step provides rights for Novartis to acquire Nestlé's 52% remaining stake in Alcon between January 2010 and July 2011 for up to approximately $28 billion.

Upon completing these steps, Alcon expects to become a majority-owned subsidiary of Novartis, the release said.