Novartis ($NVS) posted "standout" sales growth for the first quarter--thanks to several strong drugs--not to mention the final wrap-up of its Alcon buyout. The strong Swiss franc also didn't hurt, even though it did contribute to depressed profits. But if the company's numbers tell an instructive story, it's that new drugs drive growth.
An old yarn, to be sure, but as the pharma industry moves into a painful period of patent expirations, worth mentioning. CEO Joe Jimenez (photo) said that recently minted cancer drugs Tasigna (2007, with a new first-line leukemia indication) and Afinitor (2009) doubled their revenues, while the brand-new multiple sclerosis treatment Gilenya got off to a strong start with $59 million in sales, according to the Wall Street Journal. Lucentis, which recently won EU approval, brought in $444 million for the company. Meanwhile, another brand-new drug--the knockoff version of Sanofi-Aventis' Lovenox blood thinner--also delivered, with $247 million in sales.
Yes, Novartis remains heavily dependent upon the aging cancer drug Gleevec, which turned in $1.08 billion during the quarter. And then there's Diovan, the blood pressure drug that has already faced generic competition in Spain, Canada and Brazil; it brought it $1.4 billion in revenue for the quarter, down 3 percent. But with luck, Gilenya will help replace them both: Jimenez said sales are already stronger than expected, and as the Wall Street Journal points out, analysts say the drug could peak at $3.5 billion.
Calling the company's sales growth an industry standout, UBS analyst Gbola Amusa told Bloomberg, "This is a really strong underlying performance heading into Diovan pressures in 2012." Jimenez couldn't say better himself: "Contributions from all businesses led to a good start in 2011, as we achieved 14 percent growth in the first quarter," the CEO commented.