Swiss drugmaker Novartis AG said it would scout for medicines that are in earlier stages of development as acquisition price tags climb across the industry.
“The price of some of these assets has increased to the point that we don’t feel like we can create value for Novartis shareholders,’’ Novartis chief executive officer Joe Jimenez yesterday said during a conference call with reporters.
Novartis is instead to pursue deals such as its December last year acquisition of Ziarco Group for an undisclosed amount, and a licensing pact in January with Ionis Pharmaceuticals Inc, Jimenez said.
At the same time, the drugmaker’s plan to look for acquisitions valued at between US$2 billion and US$5 billion to bolster its position in key areas including cancer “really hasn’t changed,” he said.
Novartis shares yesterday rose 2 percent to 75.60 Swiss francs as of 11:24am in Zurich trading. The stock has declined about 14 percent since the end of 2015.
The company reported a 3.4 percent drop in first-quarter earnings as Europe’s second-largest drugmaker increases spending to roll out a new heart medicine and engineer a turnaround in its eye-care business.
Profit declined to US$1.13 per share from US$1.17 per share in the same period last year, the company said in a statement.
Analysts estimated US$1.11 per share, according to data compiled by Bloomberg.
Revenue fell 0.5 percent to US$11.5 billion, compared with analysts’ projection of US$11.6 billion.
Novartis is counting on newer treatments such as heart drug Entresto, psoriasis treatment Cosentyx and Kisqali for breast cancer to help offset a decline in sales of blockbuster Gleevec, which faces rising competition from cheaper copycat drugs.
Higher investment to introduce those medicines was expected to put pressure on profit in the latest quarter, Jefferies LLC said.
Novartis reiterated its January projection that sales this year will be largely unchanged from last year.
After more than one year of efforts to turn around its eye-care company, Novartis said Alcon’s growth plan is “on track.”
The company is advancing with a review of Alcon options that include a “capital markets exit,” Jimenez said on the call.
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