Novartis Stock Falls after 2Q15 Earnings Release

(Continued from Prior Part)

Sandoz is a key growth driver

Sandoz, the generics arm of Novartis (NVS), reported a 2% decline in its revenues to $2.29 billion in 2Q15 as compared to $2.33 billion in 2Q14. However, the company reported a revenue increase of 11% at constant currencies.

The revenue growth at constant currencies was due to volume growth of 17%, which was partly offset by 6% due to the price erosion. The launch of Glatopa, the first generic version of Copaxone 20mg, as well as continued strong growth in dermatology products resulted in a 23% increase in sales in the US markets at constant currencies.

Biopharmaceuticals

The global sales of biopharmaceuticals including biosimilars, biopharmaceutical contract manufacturing, and Glatopa grew 57% to $222 million at constant currencies during 2Q15. These were partly driven by the shipment of initial trade inventories of Glatopa, a recently launched product used for treatment of relapsing forms of multiple sclerosis.

Sandoz continued to strengthen its market position in biosimilars globally. The three in-market products, which are leading biosimilars in respective market segments, are Omnitrope, Binocrit, and Zarzio.

The anti-infective franchise reported a sales increase of 20% to $338 million at constant currencies due to restored production capacities after quality upgrades last year.

Merck and Co. (MRK), Bristol-Myers Squibb (BMY), Roche Holding, and AstraZeneca (AZN) are enhancing their oncology products portfolio. Investors can consider the Health Care Select Sector SPDR ETF (XLV), which is focused on pharmaceuticals and healthcare companies.

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Browse this series on Market Realist:

• Part 1 - Novartis’s Adjusted Earnings per Share Declined 7% in 2Q15

• Part 2 - Why Novartis’s Revenues Declined Marginally

• Part 3 - Why Alcon’s Performance Was Weak in 2Q15