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How Did Novartis Subsidiaries Alcon and Sandoz Perform in 3Q17?

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Alcon revenue trends

In 3Q17, Novartis (NVS) subsidiary Alcon generated revenues of $1.5 billion, which was ~6% higher YoY (year-over-year) and 1% higher QoQ (quarter-over-quarter). From January 2017 to September 2017, Alcon generated revenues of ~$4.46 billion, which was ~2% higher YoY.

Year-to-date as of September, Alcon reported core operating income of $636 million, which was ~7% lower YoY. In 3Q17, Alcon reported core operating income of $238 million, which was 16% higher YoY.

Alcon product revenue trends

In 3Q17, Alcon’s surgical products generated revenues of ~$907 million, compared with $845 million in 3Q16. In 3Q17, Alcon’s surgical products witnessed a 7% YoY rise.

In 3Q17, Alcon’s cataract products generated revenues of $667 million, compared with $648 million in 3Q16. In 3Q17, among Alcon’s cataract products consumables, intraocular cataract lenses and equipment generated revenues of ~$344 million, 243 million, and $80 million, respectively, compared with $345 million, $234 million, and $69 million, respectively, in 3Q16.

In 3Q17, Alcon’s vitreoretinal products generated revenues of ~$177 million, compared with $151 million in 3Q16. In 3Q17, Alcon’s vision care generated revenues of $619 million, compared with $591 million in 3Q16. In 3Q17, in Alcon’s vision care and contact lenses and contact lens care generated revenues of $481 million and $138 million, respectively, compared with $456 million and $135 million, respectively, in 3Q16.

Sandoz revenue trends

In 3Q17, Novartis subsidiary Sandoz reported revenues of $2.58 million, which was ~3% higher YoY and 5% higher QoQ.

In October 2017, the European Medical Agency (or EMA) accepted Sandoz’s proposed biosimilar to Amgen’s (AMGN) Neulasta (pegfilgrastim) for review. Biosimilar peers Teva Pharmaceuticals (TEVA) and Mylan (MYL) reported revenues of ~$5.6 billion and ~$3.0 billion, respectively, in 3Q17.

Notably, the Pharmaceutical ETF (PPH) has ~4.9% of its total portfolio holdings in NVS.

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