Market Place
Novartis’ sunny forecast for Sandoz; CEO sets aside US$ 700 million to settle bribery lawsuit
Swiss drugmaker Novartis has been busy overhauling its generics division — Sandoz. Over the last one year, Novartis has offloaded 300 underperforming generics in its oral solids and dermatology product lines to Aurobindo for US$ 1 billion in an effort to turnaround Sandoz.
And if its second quarter earnings figures are to be believed, those efforts are paying off.
Last week, Novartis reported a 3 percent increase in Sandoz’s year-over-year sales during the second quarter — at US$ 2.4 billion — despite price erosion of 7 percent, most of which occurred in the US. And despite pricing pressures in the US, Novartis has raised its full-year expectations for Sandoz from “broadly in line” to “low-single-digit growth”.
Is the company being unrealistic in its expectations? RBC Capital Markets analysts say that Sandoz results look encouraging, but “the declines in the US remain in the mid-teens with [a] turnaround not yet being seen.”
Similarly, analysts at SVB Leerink said Sandoz’s price erosion was better than the 9 percent the company reported in the first quarter, but overall, it “doesn’t appear” to indicate the improving trends in the broader US generics market.
Novartis’ robust guidance also has a lot to do with its promising set of new drugs, such as psoriasis treatment Cosentyx and heart medicine Entresto.
Meanwhile, Novartis CEO Vas Narasimhan has set aside US$ 700 million to settle a US doctor bribery lawsuit. The Swiss pharma giant seeks to close the chapter on allegedly aggressive business practices that had exposed it to litigation risks.
“Consistent with our efforts to resolve our legacy compliance-related allegations, right now we’re working in settlement discussions to resolve the civil suit...on speaker programs and other promotional events that happened between 2002 and 2011,” Narasimhan said. “We’ve provisioned approximately US$ 700 million for any potential settlement.”
The PharmaCompass Newsletter – Sign Up, Stay Ahead
Feedback, help us to improve. Click here
Image Credit : #Phisper Infographic by SCORR MARKETING & PharmaCompass is licensed under CC BY 2.0
“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”
