Novartis group sales up 15% to $17.5 billion, pharmaceutical net sales up 17%

By Lisa Kerner

Charlotte, N.C., July 17 - Novartis AG said its group sales and earnings growth for the first six months of 2006 outpaced the world pharmaceuticals market.

Group net sales for the first six months rose 15% to $17.5 billion, while pharmaceutical net sales were up 8% and net income increased 17% to $3.67 billion. Excluding Chiron-related charges, the Novartis Group's operating income advanced 27% and net income was up 23%.

For the first half of 2006, net financial income was $54 million, down from the $106 million reported in the first half of 2005. Net financial income for the second quarter decreased to $4 million, from $61 million in the year-ago period.

Novartis said its investment in Chiron contributed a $77 million loss. The company had a loss of $16 million in the prior-year period.

Pharmaceuticals net sales were up 11% to $5.7 billion, vaccines and diagnostics net sales were $127 million and consumer health net sales rose 4% to $1.9 billion.

The group's equity increased by $4.0 billion to $37.2 billion at June 30, from $33.2 billion at the end of 2005.

Cash flow from operating activities increased by $0.6 billion in the first half of 2006 to $3.9 billion.

"The pharmaceutical division strengthened its competitive position, particularly with our cardiovascular and oncology products advancing at strong double-digit growth rates," chairman and chief executive officer Daniel Vasella said in a company news release.

"Productivity gains in the second quarter were strong as we prepare for the launch of several potential blockbusters for the treatment of patients with type 2 diabetes, hypertension, asthma and eye diseases."

Novartis is a health care company based in Basel, Switzerland.

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