GENEVA (AP) — Swiss pharmaceuticals company Novartis is reporting net income rose 7 percent in the third quarter behind growth for its psoriasis treatment Cosentyx, its eye care business and several cancer drugs.
In addition, the company said it plans to give its Fort Worth-based Alcon eye care division an additional year and a half to rebound before deciding whether to spin it off. Novartis has been contemplating a spin-off for several years after the division turned in lackluster results.
Alcon sales were up 7 percent for the third quarter and the business is showing signs of growth, Novartis officials said in the earnings release.
“We believe the Q3 and YTD 2017 results indicate that the Alcon growth acceleration plan is beginning to generate growth, executed by a strong management team. In the near-term, Alcon will benefit from focusing on completing its turnaround in performance and leveraging the infrastructure and financial strength of Novartis,” according to the news release.
Key criteria for a final decision and timing will depend on continued Alcon sales growth and margin improvement over several quarters, the company said. Any decision will not occur before the first half of 2019.
“The strategic review also indicates that creating a stand-alone company via a capital markets exit could create additional shareholder value,” according to the news release.
In the meantime, Novartis is moving its Novartis Ophthalmic over-the-counter eye products, which had sales of about $700 million last year, to Alcon beginning next year. The company said it thought the move would be “complementary to the Alcon Vision Care business.” But Novartis’ prescription eye products won’t be moved.
In September, Fort Worth-based Alcon launched a new consumer education campaign called Invisible Edge with the help of Olympic gold- and silver-medalist Laurie Hernandez and two-time gold-medalist Tobin Heath. The campaign is using the star athletes to highlight the importance of clear vision, in particular the role of Alcon DAILIES contact lenses.
The Basel-based company says net earnings rose to $2.08 billion in the quarter, from $1.95 billion a year earlier. Net income increased 10 percent in constant currency terms.
Sales rose 2 percent to $12.41 billion, and Novartis predicts sales growth for the whole year will be broadly in line with that of 2016 in constant currency terms.
Novartis says net sales of Cosentyx nearly doubled to $1.46 billion. Aside from chronic myeloid leukemia treatment Gleevec, which has faced competition from generics, the oncology business grew 11 percent in constant currency terms.