Swiss drugmaker Novartis has appointed a new head of its Alcon eye care division after the company fell short of fourth-quarter earnings expectations.
Novartis also said overall 2016 sales and profit were likely to stagnate as it faces $3 billion in patent expirations.
Shares in Novartis fell 3.5 per cent in early trading, lagging a 0.6 per cent weaker European pharmaceuticals index.
The company reshaped itself via an asset swap with GlaxoSmithKline in 2014, focusing on its profitable pharmaceutical business, its Sandoz generics unit and Alcon.
The payoff has been delayed so far as Alcon drags on earnings, its blockbuster Gleevec blood cancer drug goes off-patent and sales of Entresto, its new heart failure medicine, remain sluggish.
"We're going to have a record amount of generic exposure in 2016," chief executive Joe Jimenez said.
“2016 will be a bit of a transition year, as we get through Gleevec, but once that generic exposure lessens in 2017 and 2018, you should see the true underlying growth come through.”
Jimenez is making changes at the top of Alcon. Former Hospira chief executive Mike Ball will take over, replacing Jeff George. Hospira, which makes biosimilars and generic versions of injectable drugs, is part of US drugmaker Pfizer.
Alcon has been hurt by slumping sales of its surgical equipment and a disappointing intraocular lens business, as well as patent expirations on its drugs.
Novartis said on Wednesday that fourth-quarter core net income fell 5 per cent to $2.707 billion, missing the average analyst forecast of $2.967 billion.
Sales slipped to $12.52 billion, against analysts’ estimates of $13.044 billion.
Jimenez predicted 2016 sales and core operating income will be “broadly in line” with 2015. For last year, Novartis revenue fell 5 per cent to $49.4 billion, with core operating income also slipping 5 per cent to $13.8 billion.
"There's no avoiding the fact that 2015 ended slowly and the outlook for 2016 is disappointing," said Alistair Campbell, a Berenberg analyst, in a note to investors.
“The problems at Alcon and the slow launch of Entresto (virtually no sales in the fourth quarter) mean the company is fully exposed to the Gleevec patent expiry in 2016. Novartis now has much to prove in 2016 and will take time to win back investor enthusiasm.”
Reuters
