Novartis net sales reached USD 13.8 billion in the third quarter. Currency had a negative impact of 5 percentage points as a result of the strengthening of the dollar against most major currencies. As the Group begins to face generic competition to Diovan in the US, the continuing rejuvenation of the portfolio leaves Novartis well-positioned. Products launched since 2007, which include Lucentis, Gilenya, Afinitor and Tasigna, continued to perform strongly. These recently launched products contributed USD 4.0 billion or 29% of Group net sales, up from 25% a year ago.
Pharmaceuticals had another quarter of good underlying growth despite the impact of generics. Net sales were USD 7.8 billion, with strong volume growth of 8 percentage points absorbing the negative effect of generics entries and price. Products launched since 2007 generated USD 2.8 billion of net sales, 36% of total sales, growing 24% in constant currencies over the same period last year.
On September 21, 2012, Diovan lost exclusivity in the US, and in line with normal practice, the product returns provision was increased to reflect limited expectations of future sales. Diovan is sold as a mono-substance (Diovan) and a combination product (Diovan HCT). With respect to Diovan, no generic competitor has yet been approved by the FDA. The FDA position has been challenged, and generic competition could come at any time. Diovan HCT is facing competition from a single generic competitor holding 180-day exclusivity and from Sandoz with an authorized generic. In line with normal cost-plus intra-Group pricing policies, most of the margin from the authorized generic is attributed to Sandoz.
Alcon net sales were USD 2.5 billion in the third quarter. The Surgical franchise delivered modest sales growth in constant currencies, impacted by slowdown in procedures and competitive pressure in EU intraocular lens business against a strong previous-year quarter. Ophthalmic Pharmaceuticals sales growth was suppressed by generic prostaglandin competition on Travatan in the US and lower sales of non-promoted brands. Vision Care benefitted from robust contact lens sales growth in the US and Japan, a strong uptake of Dailies Total 1 lenses in Europe and the recovery of the lens care solution business.
Sandoz net sales declined 13% to USD 2.0 billion. Fougera, the recently acquired dermatology business, contributed 2 percentage points of growth from the inclusion of approximately one month of sales. Excluding Fougera, volume declined by 2 percentage points and price had a negative impact of 6 percentage points. The decline was primarily the result of lower enoxaparin sales in the US from stronger price competition, partly offset by strong double-digit sales growth in Western Europe, Asia, Latin America, Russia and biosimilars.
Vaccines and Diagnostics net sales were down 11% to USD 582 million. The sales decline was driven by lower northern hemisphere flu sales and shipment delays from one of our manufacturing sites.
Consumer Health, which includes OTC and Animal Health, declined 22% to USD 938 million, impacted by the continuing absence of shipments from the Lincoln, Nebraska manufacturing site. Select OTC products (Excedrin, Lamisil and Triaminic) are being produced at third-party manufacturers and first shipments have been made to retail customers in the month of October.
Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "While Novartis net sales were impacted by the patent expiration of Diovan and a down quarter in Sandoz and Consumer Health, our launch brands performed well and now represent 29% of Group sales. Pharmaceuticals had another solid quarter. Our excellent record on innovation continues with new approvals for innovative products like Afinitor in advanced breast cancer, the recent EU filing of QVA149 in COPD and encouraging news in heart failure. I am confident that this improves the long-term growth prospects of the business."
About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2011, the Group achieved net sales of USD 58.6 billion, while approximately USD 9.6 billion (USD 9.2 billion excluding impairment and amortization charges) was invested in R&D throughout the Group. Novartis Group companies employ approximately 126,000 full-time-equivalent associates and operate in more than 140 countries around the world.