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Novartis’s Innovative Medicines Business in 4Q17

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Innovative medicines business

Novartis’s (NVS) innovative medicines business represents the prescription products business and includes two units: Novartis Pharmaceuticals and Novartis Oncology. The Innovative Medicines segment includes various products like cardiovascular and metabolics products, respiratory products, neuroscience products, dermatology products, immunology products, oncology products, and established products.

The above chart compares the revenues for the innovative medicines segment since 1Q16.

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Performance of innovative medicines

Overall, the innovative medicines business accounted for ~67.8% of Novartis’s total revenues. The segment reported revenues of $8,756 million during 4Q17, which includes 4% growth in operating revenues, while there was a 2% positive impact of foreign exchange during 4Q17 as compared to 4Q16.

The increase in revenues was driven by strong sales of cardiovascular and metabolic products, immunology and dermatology products, neuroscience products, oncology products, ophthalmology products,  and respiratory products, partially offset by lower sales of established medicines.

For cardiovascular and metabolic products, the revenue growth was driven by strong sales of Entresto and other products.

For immunology and dermatology products, the growth was driven by strong sales of products including Cosentyx,  Ilaris, Myfortic, and Zortess/Certican, partially offset by lower sales of Neoral and other products.

For neuroscience products, the growth was driven by strong sales of Gilenya, offset by lower sales of other products.

For oncology products, the growth was driven by strong sales of Afinitor/Votubia, Exjade/Jadenu, Jakavi, Kisqali, Promacta/Revolade, Sandostatis, Tasigna, Tafinlar and Mekinist, and Votrient, substantially offset by lower sales of Gleevec/Glivec and other oncology products.

For ophthalmology products, the growth was driven by strong sales of Lucentis, Systane group, and Topical Olopatadine group, partially offset by lower sales of Travoprost group and other products.

For respiratory products, the growth was driven by strong sales of Seebri Breezhaler, Ultibro Breezhaler, and Xolair, partially offset by lower sales of Onbrez Breezhaler and other products.

For established products, the revenues declined due to lower sales of Diovan/Co-Diovan, Voltaren/Cataflam, Exelon/Exelon patch, and other products, partially offset by growth in sales of Exforge, Galvus, and Ritalin/Focalin sales.

The PowerShares International Dividend Achievers ETF (PID) holds 10.5% of its total investments in healthcare companies. PID holds 1.4% in Novartis AG (NVS), 1.4% in Sanofi (SNY), 4.6% in Teva Pharmaceuticals (TEVA), and 1.0% in Novo Nordisk (NVO).

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