# Swiss Drug Maker Has Profit and Big Hopes for a Product



## trbell (Nov 1, 2000)

Swiss Drug Maker Has Profit and Big Hopes for a ProductJuly 23, 2002By ELIZABETH OLSON GENEVA, July 22 - The giant Swiss-based drug maker NovartisA.G. surprised investors today with a positive earningsreport that broke away from the generally dreary trend inthe market and with word that a potential billion-dollardrug may come to market sooner than expected. The company's net income for the second quarter rose 11percent, to $1.39 billion, from the period a year ago; inSwiss franc terms, net income fell, but by 8 percent, lessthan analysts had forecast. Sales for the quarter rose 11.3percent, to $11.3 billion. "The figures were well above expectations," said BirgitKulhoff of Lombard Odier Darier Hentsch in Zurich. "It's apositive surprise." Novartis also reported good news about Zelnorm, a drug itis testing for treatment of irritable bowel syndrome, acommon digestive complaint. The company said it nowexpected to win approval to market the drug in the UnitedStates this year, two years earlier than anticipated, afterdealing with safety concerns. Competing withGlaxoSmithKline's Lotronex, which won limited approval inthe United States last month, Zelnorm is expected to reach$1 billion in annual sales worldwide. Novartis's sales of existing products in the United States,the biggest drug market, were a bright spot in the latestquarter, climbing 19 percent on the success ofcardiovascular and oncology drugs. Novartis's stock was the only one of the 27 blue-chipstocks in the country's main market index to rise today,gaining 1.4 percent, to close at 51.20 Swiss francs ashare. Novartis's news stood out in a bad month for drug makers.Last week, Johnson & Johnson reported that the Puerto Ricoplant where it makes Eprex, an anemia drug, is beinginvestigated for possible criminal falsification ofrecords. And an American study finding that hormonereplacement therapies may increase the risk of cancer was ablow to Schering A.G. of Germany, which sells such atreatment and is due to report quarterly results later thisweek. Novartis's flagship hypertension drugs, Diovan and Lotrel,and Glivec, a new drug for leukemia, underpinned thecompany's strength. The chief financial officer, RaymundBreu, told reporters that the company, with headquarters inBasel, is on its way to posting double-digit annual salesgrowth over the next five years, excluding the effects ofshifting exchange rates. After the Swiss market closed, Novartis's chief executive,Daniel Vasella, told analysts on a conference call that thecompany would spend up to 4 billion Swiss francs ($2.77billion) buying back its Swiss-listed shares, the thirdsuch buyback in recent years. American depository receiptswould not be affected. Mr. Vasella stirred speculation last week that Novartis maymerge with its crosstown rival, Roche Holding, withapproving comments in a magazine interview about theadvantages of such a merger. Novartis already owns 21.3percent of Roche, but Roche's chairman and the heirs of itsfounders have said publicly that they oppose a merger. Unlike some competitors, Novartis has gotten a reliableflow of new drugs from its research pipeline, and itsbottom line has suffered little damage so far from genericcompetitors. But some important patents are expiring soon,including that for Lamisil, an antifungal treatment, whichruns out in 2006; an Indian company, Dr. Reddy'sLaboratories, already wants to market a generic version. More than 40 percent of Novartis's sales come from theUnited States, and the steep fall in the dollar's valueagainst the Swiss franc has worked against it. Novartishedges against adverse currency moves, but it said that theweakness of the dollar and the Japanese yen wouldnonetheless have a "major impact" on its financial results.In addition to Zelnorm, Novartis has high hopes for a newpainkiller, Prexige, which is beginning the approvalprocess in Europe and the United States this year. http://www.nytimes.com/2002/07/23/business...ness/23NOVA.htm l?ex=1028454398&ei=1&en=e20e84b8ccc5cca2[/URL]HOW TO ADVERTISE---------------------------------For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contactonlinesales###nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help###nytimes.com. Copyright 2002 The New York Times Companythe stock market has always confused me but it seems to run our lives?tom


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## Jeffrey Roberts (Apr 15, 1987)

What this means is that the worst kept secret about approval for Zelnorm in the US, seems like it is going to happen very soon.Novartis had put a new marketing team together as early as last May in anticipation for the launch of Zelnorm in the US.If the rumors are true, I suspect Zelnorm will be launched in the US in September 2002.


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## trbell (Nov 1, 2000)

In some ways it would be nice if we had a race to get them out.tom


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## GailSusan (Dec 23, 2000)

I sure hope you're right, Jeff. There are so many people who could use it.


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