Swiss pharmaceutical company Novartis, Europe's third-biggest healthcare group, said on Thursday that net profit for 2001 had risen by eight per cent to 7.0 billion Swiss francs (€4.7 bn) as flagship drug sales rose 15 per cent in local currencies.
It forecast group operating and net profit in 2002 to be higher than in 2001, barring unforeseen events.
The profit figure was slightly higher than the Multex consensus of 23 analysts for 2001 net profit to rise 6.5 per cent to a record 6.94 billion Swiss francs.
Sales for the full year rose by 14 per cent in local currencies to 32.0 billion.
The Swiss group said overall sales growth in 2002 was likely to increase in the mid-to high single-digit range. As to the key pharma sector, the group said it expected momentum there to continue, saying the sector as a whole anticipates "high single-digit to low double-digit sales growth in 2002".
Analysts have focused on whether strong growth will continue at a time the entire drugs sector is losing some allure amid the impact of patent expiries and as investors start to shift into cyclical stocks to profit from an economic rebound.
News last week that a U.S. Food and Drug Administration (FDA) advisory panel had recommended wider use of Novartis's Zometa drug - for treating the spread of cancerous cells to bones from a variety of solid tumours - helped improve sentiment, as did wider FDA approval of its cancer drug Glivec.
Novartis shifted marketing muscle to its top-selling drugs in the face of the delays. Turnover in the core drugs business had also risen 15 per cent in the first nine months, with growth especially strong in the key U.S. market.
This had led Novartis to forecast record 2001 sales and profits even though operating margins would ease.
It reported an operating margin for 2001 of 22.7 percent. It said it would maintain investment levels in marketing, while spending on research and development would increase. In the pharma it "expects to maintain profit margins at their 2001 level".
Novartis had earlier reported that first-half profit rose 10 per cent to 3.73 billion as drug sales gained 13 per cent. Based on that figure reported earlier, second-half profit alone was 3.27 billion francs.
Novartis shares fell 16 per cent in 2001 and so far are barely changed for 2002, ending at 59.90 francs on Wednesday. Shares have moved roughly in line with the Dow Jones Stoxx healthcare index .
It also said it plans to raise its dividend to 0.90 francs on 2001 results, up six per cent, matching the increase of 2000 prior to a share split last year.
The company had reported earlier this week that it is to sell its nutritional foods unit, which makes products such as Ovaltine chocolate and Isostar drinks, to focus on developing new medicines.