Novartis has surpassed estimates for its second quarter performance, boosted by higher than expected sales of its flagship cardiovascular and oncology brands.

Strong sales of Glivec and Femara in oncology and Diovan in its cardiovascular franchise helped Novartis' pharma sales to grow by 14% to $6.9 billion (£3.4 billion).

Overall sales in the quarter reached $10.7 billion, with profits of $2.3 billion, as the company recovered from a series of challenges in the US last year that included the patent expiry of four brands.

Novartis' chairman Dr Daniel Vasella said the speed and productivity of operations were improving, and growth in most countries was dynamic.

He added: "The growth acceleration in the second quarter of 2008 and our R&D successes, especially in Pharmaceuticals and Vaccines, demonstrate that our strategy is delivering results and that we are heading towards a promising future despite a weak economy."

Novartis' unexpected resilience in the harsh current climate for pharma is largely owing to its 'project-forward' - a streamlining programme implemented last year that involved cutting around 2,500 jobs to save $1.6 billion by 2010. It means the drugs unit is likely to achieve full-year growth of a low single-digit rate.

The strong performance has led investment bankers Citigroup to favour the company's financial position over its rival Roche, which markets cancer drug Avastin.

Citigroup said: "We continue to prefer Novartis in Swiss pharma for better EPS [earnings per share] growth and on-track recovery and due to our concerns over Avastin."

The cancer blockbuster was recently seen to trigger a type of anemia in some US trial patients when used in combination with Pfizer's Sutent.

But the Citigroup did identify two potential low risks to Novartis' long term growth. The first is the looming 2012 patent expiry for its blood-pressure lowering drug Diovan. The second is due to the recent FDA rejection of diabetes drug Galvus, as Novartis has indicated it is unlikely to further pursue the approval any further.

pharmafocus@wiley.com