Profits down at Novartis Ireland to €8.4m as firm ups R&D spend
New accounts filed by Novartis Ireland Ltd show that the company recorded the drop in pre-tax profits as revenues declined by 10% from €268.3m to €242.3m. Novartis Ireland is a significant employer in the healthcare industry here with over 1,000 employed in Dublin.
The accounts show that revenues from the sale of goods declined from €139.86m to €137.55m while revenues from supply of business services decreased from €128.46m to €104.77m. The directors state that revenues declining in pharma products sales were due to price and volume erosion of mature products.
Turnover relating to Novartis Corporate Centre (NOCC) services decreased by 18% driven primarily by the reduction in functions related to Novartis's global initiative which launched in 2022 targeting a more focused pharmaceutical offering.
The company has a significant R&D arm in Ireland with numbers employed in R&D last year increasing from 224 to 270. Last year, Novartis Ireland increased the R&D spend rising from €26.4m to €34.9m and the company booked an R&D credit of €4.5m in the profit and loss account.
Overall numbers employed at Novartis Ireland Ltd reduced from 1,024 to 1,010 last year and the company also employed 663 in 'general and administration', 72 in marketing, sales and distribution and five in production and supply.
Staff costs last year declined from €138.8m to €123.98m that included €95.5m in wages and salaries and €4.7m in share-based payments. Directors' pay increased from €992,000 to €1.35m made up of €1.27m in emoluments and €76,000 in pension contributions.
They said: 'We have combined our former Novartis Technical Operations and Customer and Technology Solutions units to create a new operations unit called operations. This new unit seeks to provide a stronger and simpler operational backbone that can accelerate multiple technology transformation initiatives more efficiently, create novel digital solutions at scale, and increase productivity, while maintaining industry-leading quality and service levels."
During the year, the company launched two new medicines aimed at tackling cancer, Luxturna and Leqvio. Under the heading of patient expiration and product competition, the directors said: 'The Irish government continues to closely monitor pharmaceutical pricing and profitability, with pressure to control spending on HSE medicines.'
They state that the company 'manages these risks by having a strong pipeline, ensuring that it brings innovative products to market and using competitive pricing strategies while closely monitoring costs'.
Shareholder funds totalled €88.8m that included accumulated profits of €51.9m.
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