Novartis ($NVS) CEO Joe Jimenez isn't shy about holding up a "warning" sign. In an interview with Switzerland's Sonntags Zeitung over the weekend, Jimenez once again reminded folks to expect no fireworks from Novartis in the near term.
Now that Diovan is officially off patent in the U.S., the Swiss drugmaker expects three "very challenging quarters" ahead. As PharmaTimes points out, Diovan sales already dropped by 16% during the second quarter, on generic competition in other markets. With the U.S. open to generics, the dive is expected to accelerate, and quickly. (Provided, that is, that Ranbaxy Laboratories actually launches its version during its 6-month exclusivity period, or another drugmaker steps into the breach, but that's another story.)
To make up the gap, Novartis is, of course, counting on help from new drugs. But it's also interested in deals of the right size. "[W]e want to conduct medium-sized acquisitions to boost our growth," Jimenez told the paper. "In the foreseeable future, we're most probably not going to do any mega takeovers."
Meanwhile, Jimenez has an eye toward maintaining the company's dividend. "Defending the dividend is a priority. We want to stick with a good dividend yield in the future."
So, maintain the dividend, shy away from megadeals and expect pharma-sales headwinds. Sounds like a conservative 9 months ahead. After that? "Our sales should rise markedly in the second half of 2013," Jimenez predicted.
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