Novartis (NVS) Could Formulate Strong Results in 2012 - Barron's
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Novartis (NYSE: NVS) shares closed Monday's session about 1.4 percent higher following a positive report from Barron's over the weekend.
Shares of Novartis moved just 1 percent higher in 2011 amid strong performance from peers and a robust pipeline of its own. At about $55 per share, the stock is going for 10 times expected 2012 earnings, with an overall yield of 3.8 percent.
Some analysts see a price of $80 per share based on the pharma's overall asset value. That's a potential 45 percent gain over the next 12 months or so.
In 2012, Novartis is expected to lose its patent protection on Diovan -- something investors might already be pricing in. Annual sales for Diovan have averaged $5.6 billion. Novartis has also seen some safety concerns for its hypertension product Gilenya following the shut down of a plant in the Midwestern U.S.
Novartis continues to power ahead in R&D though, fixing to spend about $10 billion in 2012, compared with just $7 billion for Pfizer (NYSE: PFE). Novartis had sales of $59 billion in 2011, versus $67 billion reported for Pfizer.
Other positives for Novartis include a prominent OTC presence with products like Excedrin, Gas-X tabs, and other items, owning about 6 percent of Roche (OTCBB: RHHBY), and its Sandoz subsidiary, the number two player in the generic drug industry behind Teva Pharma (Nasdaq: TEVA).
Unlike peers, Novartis isn't looking to break-up into smaller divisions anytime soon. According to CEO Joe Jiminez: "We feel that our focus on our five growth platforms—pharmaceuticals, generics, eye care, vaccines and diagnostics, and consumer health—is the right strategy…and will continue to deliver strong performance in the years ahead."
Shares of Novartis moved just 1 percent higher in 2011 amid strong performance from peers and a robust pipeline of its own. At about $55 per share, the stock is going for 10 times expected 2012 earnings, with an overall yield of 3.8 percent.
Some analysts see a price of $80 per share based on the pharma's overall asset value. That's a potential 45 percent gain over the next 12 months or so.
In 2012, Novartis is expected to lose its patent protection on Diovan -- something investors might already be pricing in. Annual sales for Diovan have averaged $5.6 billion. Novartis has also seen some safety concerns for its hypertension product Gilenya following the shut down of a plant in the Midwestern U.S.
Novartis continues to power ahead in R&D though, fixing to spend about $10 billion in 2012, compared with just $7 billion for Pfizer (NYSE: PFE). Novartis had sales of $59 billion in 2011, versus $67 billion reported for Pfizer.
Other positives for Novartis include a prominent OTC presence with products like Excedrin, Gas-X tabs, and other items, owning about 6 percent of Roche (OTCBB: RHHBY), and its Sandoz subsidiary, the number two player in the generic drug industry behind Teva Pharma (Nasdaq: TEVA).
Unlike peers, Novartis isn't looking to break-up into smaller divisions anytime soon. According to CEO Joe Jiminez: "We feel that our focus on our five growth platforms—pharmaceuticals, generics, eye care, vaccines and diagnostics, and consumer health—is the right strategy…and will continue to deliver strong performance in the years ahead."
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