Novartis profit slips in Q1 on Alcon

Swiss pharmaceuticals group Novartis says net income fell 15 percent in the first quarter, as it continued to adjust to generic competition for its Gleevec leukemia drug and stopped work on a hoped-for treatment for heart failure.

The Basel-based company said net income dropped to $1.7 billion in the quarter, compared to $2.01 in the year-earlier period. It cited a $200 million charge to discontinue RLX030, which failed to pass tests in trials as a treatment for acute heart failure.

Net sales fell 1 percent to $11.54 billion, offset partially by 136 percent growth for Cosentyx psoriasis treatment. Novartis said it still expects full-year sales to be roughly equal with 2016, based on constant currencies, with core operating income flat to down in the low single digits.

Chief executive Joe Jimenez has called 2017 another transition year for the Basel-based drugmaker as it spends on Alcon to arrest a sales slump and on slow-starting Entresto, while absorbing falling revenue from its patent-expired cancer drug Gleevec.

Jimenez is counting on new medicines including recently launched breast cancer drug Kisquali, psoriasis drug Cosentyx and Entresto to help restore growth at Novartis next year.

"We had a solid start to the year," Jimenez said on a call. "We're investing heavily in the growth drivers." The CEO added that a strategic review of the Alcon division for a possible spin off was continuing, with a status update set for late 2017.