Geneva  - The Swiss drugmaker Novartis AG reported Thursday that second quarter profits were down 10 per cent, to 2 billion dollars, owing to a stronger dollar against the euro and higher financing costs.

Net sales rose 8 per cent in local currencies, a statement said, but fell 2 per cent, to 10.5 billion dollars, due to currency movements.

Recently launched products from its pharmaceuticals department contributed 15 per cent of the net sales figure, compared to 9 per cent in the first half of 2008.

Swine flu was also working in favour of the Basel-based company, which said it had received several large orders for a vaccine it is still in the process of creating.

Novartis was in talks with 35 governments and the United States had awarded it 979 million in contracts related to the A(H1N1) virus, as it is technically known.

However, overall, revenue from vaccines dropped 23 percent.

Sandoz, the generic wing of the company, saw sales drop 9 per cent, in dollars, from last year, to 1.8 billion.

Looking ahead, the group said it expected some net sales growth, in local currencies, during the second half of the year.

"Underlying growth in operating and net income to record levels in 2009, however, could be more than offset in reported results by currency-related losses," Novartis cautioned.

Largely due to recent bond issuances, Novartis total assets rose to 84.3 billion dollars at the end of the first half of 2009, compared to 78.3 billion at the end of last year. (dpa)