Chardan Capital Markets Starts Novartis (NVS) at Buy
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Chardan Capital Markets initiates coverage on Novartis (NYSE: NVS) with a Buy rating and a price target of $95.00.
Analyst Gbola Amusa commented, "We initiate coverage on Novartis AG (NVS) with a Buy rating, based on 1) risk-reward dynamics on nearing
catalysts for the company's pivotal phase III wet AMD franchise (Fovista, RTH258), and 2) the likelihood of
long-term Novartis share price performance based on considerations surrounding the Chardan Sustainable
Medicine Framework. We continue to roll out coverage on global healthcare companies like Novartis that have the
potential for excess shareholder returns over the long-term by generating shared value for society through performance
on 1) disruptive or sustainable innovation, 2) access to medicines initiatives, and/or 3) healthcare cost-benefit
technologies. While the market debate is appropriately focused on Entresto (heart failure) and Cosentyx (inflammation)
ramps amid Glivec generics in the short term, Novartis' ability to improve in immuno-oncology in the medium term, and
Novartis' potential to weather its 2019-20 generics cliff in the long-term, our focus is disproportionately on Novartis'
emerging wet AMD franchise, where despite Novartis' clear competencies in wet AMD, consensus models just $811
million in combined 2022E sales for two assets (Fovista and RTH258) that are due to soon report pivotal and
potentially paradigm-shifting pivotal data, namely: Fovista has phase III data due by end 2016, and RTH258 has phase
III data due by mid-2017. Both products could have implications that are just as important as the aforementioned
issues critical to consensus. Indeed, we take the view that the anti-VEGF therapy add-on, Fovista (partnered with
Buy-rated Ophthotech for ex-US sales), can generate $1.5 billion in 2022E risk-adjusted ex-US sales and $3.3 billion
in risk-adjusted global sales, as it has been shown in a phase IIB study to boost visual acuity by 62% when added to
Lucentis. We model the anti-VEGF therapy, RTH258, can generate $964 million in 2022E risk-adjusted sales, as it
offers the potential for quarterly dosing, which is supportive of what we think will be an emerging theme of treatment
burden reduction in anti-VEGF wet AMD markets."
Shares of Novartis closed at $79.94 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesChardan Capital Markets, Gbola Amusa
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