Novartis today reported first-half net profits rose by a better-than-expected 10 per cent to euro 2.4 billion as sales at the flagship drugs division rose 13 per cent.
The Swiss healthcare group forecast record results in 2001. Analysts had generally expected a slightly lower net profit for the first half.
Turnover at its core pharmaceuticals division rose to euro 6.4 billion, helped by a 21 per cent leap in US sales.
Novartis had been expected to produce double-digit drug sales growth, although an increased marketing spend was weighing on margins. The drugs division's operating margin dipped 1.6 points to 27.8 per cent of sales.
Novartis's reputation for smoothly rolling out new products has been tarnished this year by regulatory setbacks that delayed the launch of two potential blockbusters - Zelmac/Zelnorm for irritable bowel syndrome and Xolair for asthma.
Novartis said it would appeal the US Food and Drug Administration's decision in June not to approve Zelnorm/Zelmac.
It said it had decided with US partner Bristol-Myers Squibb not to pursue an accord to jointly develop and market the drug, for which an application for regulatory approval in the European Union has also been withdrawn.
Novartis shares have fallen nearly 20 per cent this year and underperformed the Dow Jones Stoxx health care index by more than 17 per cent.