Net profit attributable to shareholders fell to $904 million from $1.65 billion, while net profit from continuing operations was down 42 percent at $931 million from $1.6 billion. The figures include a charge of $444 million for an ongoing cost-savings program. sales rose 6 percent to $9.93 billion.
Novartis stock dived after ceo Dan Vasella acknowledged the drugmaker won't grow faster than its peers again until this year's fourth quarter. Sales of five products, including the Famvir herpes medicine and the irritable bowel treatment Zelnorm fell by almost half to $1.7 billion last year from 2006 after the medicines either faced generic competition or were pulled from the market, Bloomberg News notes.
"The share buyback is nice from an investor's point of view but why Vasella isn't putting more money into R&D beats me,'' Joerg de Vries-Hippen, who oversees about $60 billion, including Novartis shares, as chief investment officer for European stocks at AllianzGlobal Investors, tells Bloomberg. "I can't see how things are to improve soon either.''
For more detail, you can read the Novartis statement.