By Caroline Copley
ZURICH (Reuters) - Swiss drugmaker Novartis AG (VX:NOVN) reported better-than-expected results on Tuesday, as strong sales of new products and its leukaemia drug Glivec helped offset full copycat competition to its former best-selling blood pressure pill Diovan.
The Basel-based firm, in the middle of a radical portfolio revamp, is counting on products launched in the past five years to help support sales as it battles a series of patent losses on top-selling drugs.
Sales of these so-called growth products, such as multiple sclerosis pill Gilenya and cancer drugs Tasigna and Afinitor, grew 21 percent in the third quarter, a slight acceleration on the 18 percent growth seen in the previous quarter.
Group sales rose 4 percent year-on-year to $14.7 billion (9.13 billion pounds), while core earnings per share (EPS) - the measure most followed by investors - jumped 10 percent to $1.37. Analysts in a Reuters poll had forecast sales of $14.54 billion and core EPS of $1.31.
"I think we're building good momentum to become a more focused and more profitable company," Chief Executive Joe Jimenez told reporters on a call.
Shares in Novartis were trading up 2.2 percent at 87.60 Swiss francs by 0818 GMT, having risen as high as 87.80 francs, their highest since Oct. 7.
The stock is up more than 20 percent so far this year, outperforming a 15 percent rise in the European healthcare sector .
Despite the impact of generic competition, expected to lop $2.7 billion off its top line this year, the company has reported impressive data for a new heart drug known as LCZ696. Analysts have forecast multi-billion dollar sales for the product.
Jimenez said Novartis was on track to file LCZ696 for approval by December this year and expects a decision by U.S. health regulators towards the end of 2015.
OVERHAUL ON TRACK
Novartis in April unveiled plans to exit smaller operations such as vaccines, over-the-counter drugs and animal health, while adding higher-margin cancer drugs from GlaxoSmithKline Plc .
It concluded the last bit of unfinished business related to the overhaul on Sunday, agreeing to sell its global influenza vaccine business to Australia's CSL Ltd (AX:CSL) for $275 million. From now on, it plans to focus on three core areas: pharmaceuticals, eye care and generics.
In the third quarter, sales of those core businesses rose 2 percent, with revenue from pharmaceuticals flat, while its eye care unit Alcon and generics business Sandoz grew 5 and 6 percent respectively.
Its pharmaceuticals division took a hit from copycat competition to its blood pressure pill Diovan, after India's Ranbaxy Laboratories Ltd launched a generic version on July 7. Sales of Glivec beat expectations, rising 7 percent to $1.2 billion.
Jimenez said the company was on track to close the sale of its animal health unit to Eli Lilly and Co (N:LLY) in the first quarter of 2015, while the GSK deal should complete in the first half of next year.
Sales of these discontinuing operations rose 15 percent, as its vaccines unit benefited from earlier shipments of flu vaccines, while over-the-counter drugs relaunched products in the United States that had been off the market.
Third-quarter net profit jumped 45 percent to $3.24 billion, well ahead of forecasts and boosted by an $800 million pretax gain from the sale of its shareholding in Idenix Pharmaceuticals, which was bought by U.S. drugmaker Merck & Co (N:MRK) in June.
Novartis kept its financial outlook for the full year unchanged, predicting low-to-mid-single digit sales growth in constant exchange rate terms. It also forecasts core operating income to grow at a mid-to-high-single digit rate.
(Editing by Ryan Woo and David Holmes)