Novartis Warns on Profit as Entresto Investment Weighs

Swiss pharmaceutical giant Novartis AG cautioned that its profit could fall this year due to heavy investment in its new heart-failure drug Entresto, after reporting a drop in net profit for the second quarter amid currency headwinds.

The company said net income was $1.81 billion in the three months to June 30, 3% lower than in the year-earlier period. Core net income, a measure which strips out one-time gains or losses, fell 5% to $2.9 billion, while revenue dipped 2% to $12.5 billion. Analysts expected core net income of $2.8 billion and revenue of $12.3 billion. Stripping out the effect of the strong dollar, net income and sales were flat, and core net income was down 2%.

Basel, Switzerland-based Novartis lowered its guidance slightly for the year, saying that core operating income could decline by a low-single-percentage digit due to increased spending on the company's new heart failure drug Entresto.

Novartis is relying heavily on Entresto, along with another new drug Cosentyx, for psoriasis, to offset revenue lost from cancer drug Gleevec, which has faced generic competition since February this year.

Write to Denise Roland at [e-mail]

(END) Dow Jones Newswires

July 19, 2016 03:25 ET (07:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.