Novartis Posts 4th Quarter Loss
Swiss drug manufacturer Novartis posted a fourth quarter loss of 47 percent Wednesday, reaching just $1.21 billion in profit. According to the Associated Press, the Basel-based company was hurt by manufacturing problems, layoffs and huge costs connected with the ending of clinical trials.
By comparison, Novartis reached a net profit of $2.32 billion in the same quarter in 2010.
Perhaps the biggest cost for the company was the $900 million charge it suffered after ending trials of the hypertension drug Tekturna. The medication, known as Rasilez outside the United States, was found to cause health complications in patients who had already taken other drugs for high blood pressure.
Novartis also announced the end of two other experimental drugs, one of which led to charges of $160 million in the fourth quarter.
In addition to the canceled trials, recalls dogged the company as well, with $115 million lost through the temporary closure of its Lincoln, Nebraska facility. Another charge of $288 million stemmed from the cut of 2,000 jobs last year.
“We experienced some disappointments in the fourth quarter, with Tekturna/Rasilez and with the need to improve our quality standards at some manufacturing sites,” admitted Joseph, Jimenez, chief executive for Novartis. But he remained positive about a new hypertension drug called Diovan, saying, “I am quite bullish on the future growth prospects for the company once we get Diovan out of the base.”
Shares in the company fell 2.5 percent on the news, though profits were on par with analyst expectations.