Novartis AG’s consumer business gathers steam in advance of moving into a joint venture with GlaxoSmithKline PLC as net sales in its fiscal 2014 second quarter grow 5% to $1.1 billion, driven by “solid OTC performance across key regions.” The Swiss firm July 17 said the cessation of depreciation and amortization of non-current assets in advance of its consumer business change had a positive impact of $18 million for the April-June period, comprising $8 million for depreciation and $10 million for amortization. Novartis and GSK in April agreed to combine their consumer portfolios in a JV they estimate will have annual OTC sales of $5.72 billion ([A#05140428004]). The deal, expected to close in first half of 2015, should strengthen GSK’s consumer products business and help Novartis recover from widespread OTC business setbacks linked to quality-control problems. In its earnings release, Novartis said all of the 60 regulatory inspections of its manufacturing sites during the quarter, including four by FDA, “were deemed acceptable or good.” The firm’s total net sales grew 2% to $14.6 billion and its income increased 6% to $3.8 billion. Novartis forecasts growth in 2014 net sales in the low to mid-single digit rate and operating income in the mid to high-single digit rate.
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