Switzerland's number one pharmaceutical company Novartis has reported a sharp rise in sales in the first nine months of the year as its continues to outperform the sector as a whole.

Group and Pharmaceuticals sales climbed 18% to $18.1 and $11.6 billion respectively, led on the pharma side by Diovan, Novartis' angiotensin receptor blocker (ARB).

Chairman and Chief Executive of Novartis Daniel Vasella said: "I am pleased that we have succeeded in delivering sustained double digit growth in both divisions.

"Pharmaceuticals is gaining share in all our key markets. The cardiovascular franchise, especially Diovan, achieved the top position in its fast growing global segment, and oncology sustained its dynamic first-half growth rate."

Diovan continued to outpace the fast-growing ARB segment in the third quarter with sales of $615 million. This was ahead of Deutsche Bank forecasts for the product and implies distortions from US wholesaler stocking patterns, analysts said.

Sales of the ARB treatment were trailed in the third quarter by Lamisil ($293 million),  Gleevec/Glivec ($280 million), Neoral ($247 million) and Zometa ($240 million).

Over first nine-months of this year, R&D spending reached 19% of sales - reflecting Novartis' investment in its new Cambridge facilities whilst sales and marketing declined slightly as a percentage of sales.

The company said it expects to deliver superior short- to mid-term sales growth in the high-single to low-double digit percent range in local currencies.But, as previously forecast, 2003 net financial income is expected to be below last year's level, as a result of Novartis' lower level of liquidity and the challenging economic conditions.

Meanwhile, Roche third quarter results were 5% over all expectations with sales of CHF7.3 billion and Roche raised its expectations for its full year operating profit margins, promising a slight increase over the previous year.

Pharmaceutical sales were aided by strong performances by anaemia drug NeoRecormon, transplant drug Cellcept and hepatitis C drug Pegasys.