Third-quarter net sales fell 2 percent to $13.807 billion, falling short of the average forecast in a Reuters poll of $14.032 billion, while core earnings per share fell 6 percent to $1.34, bang in line with consensus.

Like many rivals, Novartis is facing headwinds from a wave of patent expiries sweeping through the global pharmaceutical industry. Diovan went off patent in the United States on September 21.

The drugmaker is banking on sales of its newest products, such as multiple sclerosis pill Gilenya and breast cancer drug Afinitor to offset declines in Diovan.

Novartis confirmed its outlook for 2012 and said the strong dollar would shave approximately 3-4 percent off full-year sales and 2-3 percent off operating profit. This is a slightly lower hit than it forecast in the second quarter.

(Reporting by Caroline Copley)

• A Permanent Economic Emergency