Novartis reported strong 2Q-2013 financial results due to the absence of
Diovan generics in the US. For the same reason, Novartis has revised its earning
guidance for the full year 2013. It now expects group net sales to grow at a
low-single digit and the group core operating income to decline at a low-single
digit rate. We see the revision in guidance as inadequate and not reflective of
the gains due to delayed Diovan generic entry. Despite the higher than expected
sales base in 2013, the company still retains its guidance for 2014 and 2015
(mid single digit growth).