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* Q4 sales $15.08 bln vs poll average of $15.09 bln
* Core EPS $1.20 vs $1.28 forecast in Reuters poll
* Expects 2014 sales to grow in the low to mid-single digits
* CEO wants portfolio review complete by summer
* Proposes dividend of 2.45 Sfr per share, up 7 pct
By Caroline Copley
BASEL, Jan 29 (Reuters) - Novartis is looking atoptions, such as joint ventures, for three smaller businesses tobring them in line with its world-leading pharmaceuticaloperations, it said on Wednesday, in a review due to becompleted by the end of summer.
The Basel-based firm has been casting a fresh eye over itsoperations following the departure of veteran chairman andone-time CEO Daniel Vasella, the architect of the merger ofCiba-Geigy and Sandoz that created Novartis in 1996.
While new chairman Joerg Reinhardt has defended thediversified strategy, he says Novartis wants all its businessesto be among world leaders, casting doubt over three sub-scaleunits: over-the-counter drugs, animal health and vaccines.
Global drugmakers are under increasing pressure frominvestors to step up the pace of restructuring and unlock valuetrapped inside large firms.
On Wednesday, Chief Executive Joe Jimenez told reporters hehoped the review would be concluded by the end of summer.
"We are considering all options including potentially uniquestructures that would enable them to become leading businessesin their sector," he said, adding this could include jointventures or other unconventional set-ups different from anoutright acquisition or sale.
Sources have said that Novartis is discussing swapping itsanimal health and human vaccines businesses for Merck & Co Inc's over-the-counter products unit in a deal that couldboost earnings at both companies.
Jimenez said he was a "big fan" of Novartis'over-the-counter business, where drugs are paid for by consumersand are branded allowing for premium pricing.
He also cited the long-term potential of vaccines thanks toits meningitis B vaccine Bexsero and said its animal healthdivision had synergies with its research operations, although itremained a smaller business.
Shares in Novartis - which gained almost 24 percent lastyear on investor hopes for a restructuring - were trading up 0.6percent to 71.75 francs at 0848 GMT, in line with the Europeandrugs sector.
DIOVAN DELAY
Novartis said fourth-quarter net sales rose 2 percent to$15.08 billion, compared to the average analyst forecast for$15.09 billion in a Reuters poll. Core earnings per share fell 3percent to $1.20, compared to the $1.28 mean estimate.
Foreign currency swings shaved 11 percentage points offfourth-quarter operating income, with the company hit inparticular by a sharp slide in emerging market currencies and aweaker Japanese yen, as well as a stronger Swiss franc.
David Kaegi, an analyst with Bank J. Safra Sarasin, said theresults were solid and said productivity measures had helpedoffset margin pressure at the group level from genericcompetition.
Many of Novartis' European peers have now put the so-called"patent cliff" - where best-selling drugs lose marketexclusivity - behind them.
But Novartis is still awaiting some cheaper, copycatcompetition for its once best-selling blood pressure pillDiovan, since Ranbaxy Laboratories has facedregulatory delays for its generic version.
While the delay granted Novartis a temporary reprieve lastyear, that hit has been pushed into 2014. It now expects furthergeneric competition to launch in the United States at thebeginning of the second quarter.
The Basel-based firm guided for 2014 net sales to grow inthe low to mid-single digits, a slightly less confident forecastthan last year, when it told investors to expect growth of atleast mid-single digits this year and next.
Novartis said it still expected core earnings to grow aheadof sales, helped by productivity measures.
The company must also seek to plug the hole left by theupcoming expiration of its patent for leukaemia drug Gleevec.
It is banking on new products such as multiple sclerosispill Gilenya and cancer drug Afinitor to help it grow sales andprofits through this patent loss.
Novartis is also pinning its hopes on a slew of potential'blockbuster' treatments for cancer, heart failure and lungdisease.
But that ambition hit a stumbling block last week, when theEuropean health regulator took an unfavourable position on itsheart failure drug serelaxin, forcing the company to delay itsoriginal launch plans.
The company said it would lift its dividend to 2.45 Swissfrancs per share for 2013, compared to the 2.30 francs it paidout last year.
While this is less yield than European peers likeGlaxoSmithKline, Sanofi and AstraZeneca, it is comparable to crosstown rival Roche,where growth is currently more visible at Novartis, KeplerCheuvreux analyst Fabian Wenner said.
