Strong US dollar hurts Swiss pharmaceutical company Novartis with 32-per cent drop in Q2 profit

BERLIN – Swiss-based pharmaceutical giant Novartis’ second-quarter net income dropped 32 per cent over the same quarter last year, brought down primarily by poor performance from associated companies and negative effects of a strong U.S. dollar, the company said Tuesday

Net income was $1.856 billion, down from $2.723 billion in the same quarter in 2014. Net sales were down 5 per cent to $12.694 billion and earnings per share from continuing operations dropped to $0.77 from $1.11 last year.

Nevertheless, CEO Joseph Jimenez said the company had a strong quarter for innovation with the U.S. approval and launch of two new drug products — heart failure drug Entresto and multiple sclerosis therapy drug Glatopa — and confirmed its full-year guidance.

Group sales are expected to grow by mid-single digits and operating income is expected to grow ahead of sales at a high-single-digit rate, Novartis has said.

“We are confident we will deliver on our priorities for the year,” Jimenez said.

Novartis said its core group’s net income was down 8 per cent to $3.074 billion but would have been up 5 per cent in constant currencies.

If the U.S. dollar maintains its mid-July strength for the rest of the year, it will contribute to a 9 per cent drop in sales and 13-14 per cent on core operating income, the company said.