GENEVA (AP) - Swiss pharmaceutical company Novartis AG reported an 18 percent drop in earnings for the first quarter Tuesday, citing strong competition in the generic drugs market and manufacturing problems at a plant in the United States.
Net profit fell to $2.33 billion from $2.82 billion in the same period last year, while sales dipped 2 percent to $13.74 billion, much as analysts had predicted.
"We expected a challenging quarter in Q1, and we delivered in line with our expectations," chief executive Joe Jimenez told reporters in an early morning conference call.
Jimenez said the company would slowly restart production at the Lincoln, Nebraska, plant that was halted last year after inspection reports found possible contamination of blood pressure drugs. The suspension cost Novartis some $200 million in the quarter.
The Basel-based company's generics unit Sandoz also suffered production problems, as well as stiff competition that resulted in sales dropping 10 percent to $2.12 billion in the first three months.
Novartis said it expects full-year profits to come in below 2011.
Jimenez said nine drugs - including diabetes medication Galvus, Tasigna for leukemia and Lucentis to treat wet age-related macular degeneration - are on track for annual sales of over $1 billion.
Multiple sclerosis pill Gilenya is also expected to achieve what the company calls 'blockbuster' status despite recently coming under scrutiny for possibly causing heart problems in patients with existing cardiac conditions.
Novartis said last week that it was updating the labeling for Gilenya to warn patients.