Group net sales increased 1% (+3% cc) to USD 14.5 billion in the second quarter, with all divisions contributing to growth in constant currencies. Currency had a negative impact of 2 percentage points mainly from the weakening yen. Excluding the impact of patent expiries, underlying sales grew 8% in constant currencies. This performance was fueled by growth products such as Gilenya, Afinitor, Tasigna, Galvus, Xolair, the Q Family and Jakavi, which together contributed USD 4.5 billion or 31% of Group net sales, up 13% over the prior-year period. Generics impacted sales by approximately USD 0.8 billion, mainly due to Diovan and Zometa. Sales continued to benefit from the delayed entry of generic competition for Diovan monotherapy in the US.
Pharmaceuticals delivered net sales of USD 8.1 billion (-2%, +1% cc) in the second quarter, driven by strong volume growth (+10 percentage points), which offset the impact of generic competition (USD 0.7 billion, -9 percentage points). Pricing had a negligible impact. Growth products grew 26% (cc) to USD 3.0 billion, contributing 37% of division net sales compared to 30% in the same period last year.
Pharmaceuticals operating income decreased 7% (-3% cc) to USD 2.6 billion. Core operating income was USD 2.5 billion (-10%, -6% cc). Core operating income margin in constant currencies decreased by 2.3 percentage points; currency had a negative impact of 0.6 percentage points, resulting in a net decrease of 2.9 percentage points to 30.4% of net sales, mainly due to the impact of generic competition and continued investments in key projects in Specialty Care and Oncology.
Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "Novartis delivered a solid second quarter, resulting in a good first half in 2013. Successful execution on growth brands allowed us to navigate patent expiries and new competition, while deepening our footprint in Emerging Growth Markets like China and Russia. Our underlying business showed strong growth behind significant innovation, with sales up 8% and core operating income up 17% in constant currencies in the first half excluding the impact of generics."
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 all these areas. In 2012, the Group achieved net sales of USD 56.7 billion, while R&D throughout the Group amounted to approximately USD 9.3 billion (USD 9.1 billion excluding impairment and amortization charges). Novartis Group companies employ approximately 129,000 full-time-equivalent associates and operate in more than 140 countries around the world.