Novartis, the world's sixth largest drug maker, reported a double-digit net profit rise on Thursday and forecasted a sustained growth for this year despite the increasingly difficult global market.
"Despite challenging industry conditions, our outlook for 2005 remains strong. We expect to deliver again a competitive performance with record sales and strong earnings," the company's chairman and chief executive Daniel Vasella said at the annual results conference.
The Swiss pharmaceutical giant said that sales last year hit US$ 28.25 billion, a 14 percent increase from US$24.86 billion in 2003.
Pharmaceutical and consumer health sales together yielded a 15 percent surge in net profit last year, despite a dip in profit in the fourth quarter due to restructuring costs for its generic unit named Sandoz.
Underperforming other divisions in Novartis, Sandoz reported a negative 1 percent net sales growth last year, due to price erosion in the US's generic drugs market and a rebate war in Germany.
Another challenge facing Novartis for the year to come is public mistrust against the pharmaceutical industry as a whole.
"People feel deceived when there is news about the drug's side effects," Vasella said, referring to its anti-inflammatory drug Prexige, which contains a painkilling compound known as a Cox-2 inhibitor that has sparked concerns. The US Food and Drug Administration is slated to discuss the overall benefit-to-risk considerations for Cox-2 in February.
"We will re-establish public trust by improving transparency in clinical trial and product litigation," he said.
Despite difficult market conditions, Novartis predicted further record sales and profits this year, as its strong-selling drugs like Diovan for treating high blood pressure would see growing demand in Western countries and Taiwan.
As part of its annual spending from US$20 billion to US$25 billion on research and development, the Novartis Institute for Tropical Disease in Singapore embarked on studies of dengue fever and tuberculosis last year. The Institute planed to conduct clinical trials on two novel compounds against dengue fever and TB by 2008.
The drug maker also said that the possibility of expanding its investment in Taiwan remains, although no concrete plan has been drawn up.
"We have meetings with the researchers and scientists there. It is possible," said Novartis' Jesus Acebillo, head of emerging growth markets.
"In terms of scientific environment, Taiwan is just as good as any other countries," said Paul Herring, Norvatis' head of corporate research.