Europe's biggest drug maker to face $3bn hit from competition

Swiss drug company Novartis has seen fourth-quarter profits fall as currencies in emerging markets weakened against the dollar.

Europe's largest drug maker is feeling the heat as heart medication Diovan and cancer treatment Gleevec start to lose patent protection.

Novartis lost its patent rights for Diovan in the US in 2012, but has not yet felt the full impact from cheaper, generic drugs, as Ranbaxy Laboratories faced delays for its version of the drug.

The company forecasts that generic competition to reduce sales by as much as $3bn (£1.8bn) this year, compared to the $2.2bn (£1.3bn) in 2013.

Fourth-quarter earnings excluding some items fell by three per cent to $1.20 a share compared to $1.24 a share the previous year, the company said in statement.

Earnings in dollars suffered due to a strong Swiss franc. Analysts predicted profit of $1.21 a share, according to an estimate compiled by Bloomberg. Sales rose two percent to $15bn (£9bn).

Commenting on the results, Joseph Jimenez, CEO of Novartis, said:

Novartis delivered strong performance in 2013, growing both net sales and core operating income in constant currencies while absorbing patent expirations. We maintained good momentum in innovation, with 18 approvals and three FDA Breakthrough Therapy designations. Our growth products continued to expand, rejuvenating our portfolio and reinforcing our growth prospects.