H1N1 flu vaccine ups Novartis profit with 54%
Drug maker Novartis AG today reported a 54% rise in fourth-quarter net profit to US$2.32 billion. Strong sales and favourable exchange rates benefited to this result.
"The fourth quarter has been especially strong," outgoing CEO Daniel Vasella told reporters in a conference call, noting that Novartis benefited from better exchange rates and the shipment of large orders of H1N1 influenza vaccine (also called 'swine flu') in the final three months of 2009.
Vasella gave a cautious outlook on future orders for the H1N1 vaccine, saying demand may not hold up now that many countries perceive the pandemic to be milder than previously thought.
"I don't know what the demand will be for new products, but it will be fairly moderate," he said.
Novartis said it has appointed Joe Jimenez, the head of its global pharmaceuticals division, to succeed Vasella effective from February.
"After 14 years as CEO it is the right time to complete the carefully planned CEO succession process, which started over a year ago," Vasella said.
The company offered a positive outlook for 2010, but Vasella said much would depend on whether the Alcon deal (eye care) proceeds as planned. "That is the swing factor," he said.
Novartis, which already owns 25% of Alcon, has said it will buy Nestle SA's 52% stake for $28 billion in cash before carrying out a merger with Alcon that would give it control of the remaining 23% held by minority shareholders.
Some minority shareholders have launched legal action in protest against what they perceive as an unfairly low offer to them of approximately $153 per share, compared with $168 per share that Novartis is paying Nestlé.
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