Growth all round at Novartis

Swiss pharmaceuticals group Novartis has reported strong growth in the first quarter, despite the difficult economic environment.

Driven mainly by its core pharmaceutical business, there was also growth in the medical nutrition division, where turnover was up by 17 per cent (4 per cent in local currencies) to $190 million.

This was attributed to the strong performance of its Isosource et Novasource enteral feeding brands. The Medical Food franchise (Resource) also performed well, benefiting from the expansion of the home-care channel, said Novartis.

The unit achieved an operating result of $20 million, a significant rise on the same period last year. Gains in production costs and raw materials allowed the company to reduce the cost price of its products and combined with administration cost reductions, meant that the operating margin leaped to 10.5 per cent compared with only 3.7 per cent in the previous first quarter.

Baby foods however declined 5 per cent (2 per cent in local currencies) to $307 million, partly due to divestments of minor operations in Europe. Gerber however increased its market share in the US, thanks to new product entries such as Lil' Entrées, microwavable convenience meals for babies and toddlers.

Gerber is now part of the new Nutrition and Sante unit, formed last year in a bid to drive growth to gain a better sale price for the unit. The division also includes the Cereal brand and the Isostar sports drink.

Overall group turnover was up 21 per cent in dollars, (13 per cent in local currencies) to $5.7 billion and operating results were up 24 per cent thanks to new productivity gains and improvements in the product mix, to $1.4 billion.