January 24, 2018 / 7:02 AM / 9 months ago

UPDATE 1-Novartis beats forecasts, sees new drugs fuelling 2018 growth

(Adds details, comment from CEO, and dividend info)

By John Miller

BASEL, Jan 24 (Reuters) - Swiss drugmaker Novartis on Wednesday forecast 2018 operating profit would grow faster than sales as revenue from drugs, including its latest blockbuster Cosentyx, accelerates and the company exits a period when patent losses dented results.

Core net income in the fourth quarter of 2017 rose 6 percent to $2.82 billion, Novartis said in a statement, compared with the $2.75 billion average forecast in a Reuters poll. Fourth-quarter sales rose to $12.9 billion, compared to the Reuters poll average of $12.6 billion.

The company said 2018 sales would grow at a low-to-mid single-digit percentage range, with core operating profit rising in the mid-to-high single-digits .

Novartis Chief Executive Officer Joe Jimenez, who will hand over the reins to Vas Narasimhan on Feb. 1 after eight years at the helm, has forecast robust growth starting this year as new drugs such as psoriasis treatment Cosentyx outweigh plunging revenue from patent-expired Gleevec.

Jimenez, however, also leaves Narasimhan with unfinished business: Novartis must still decide whether to spin off its eye care unit Alcon, with an announcement likely later this year as the unit returns to growth.

Novartis' Sandoz sales may slip again this year as the generics division is buffeted by U.S. pricing pressures.

"As the CEO, my priorities will be driving our next growth phase by strengthening operational execution, delivering more breakthrough innovation, pivoting to become a data-centric, digitally-enabled organization, building trust, reputation and transforming our culture," Narasimhan said in a statement.

Jimenez, a former Stanford University swimmer, who joined the organization a decade ago from ketchup maker Heinz, said he wanted to return to the United States for an as-yet-unspecified new role outside of Novartis.

"Novartis is poised for sustainable growth," he added.

Novartis plans to pay an increased dividend of 2.80 Swiss francs per share, compared with 2.75 francs the previous year. (Reporting by John Miller, Editing by John Revill and Sherry Jacob-Phillips)

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