Switzerland-based global healthcare company Novartis (NVS) is gaining momentum this year, thanks to solid pipeline execution, new regulatory wins, high-value license transactions, capital return to shareholders, and positive market sentiment. Novartis stock has surged 36.3% year-to-date, outperforming the broader market. Following Sandoz’s (SDZNY) 2023 spinoff, Novartis is a pure-play innovative medicines firm focused on high-value therapeutic areas. More News from Barchart The company is scheduled to r ...

Key Takeaways Pfizer's deal with Trump cuts drug prices, boosts U.S. investment and lifts pharma sector sentiment.Investor optimism grows as major drugmakers eye similar tariff-free pricing agreements with Trump.J&J, Bayer and Novartis show strong growth momentum, making them attractive pharma investment picks.Late last month, Pfizer (PFE) announced a landmark deal with the Trump administration to cut drug prices and expand U.S. innovation and manufacturing.Under the deal, Pfizer agreed to slash prices of s ...

Key Points Novartis and Gilead Sciences have businesses that can perform well during downturns. Novartis has an extensive portfolio of medicines across many therapeutic areas. Gilead Sciences leads the HIV market and is expanding its oncology lineup. 10 stocks we like better than Novartis › Equity markets experienced significant volatility this year. Many investors feared that President Donald Trump's aggressive trade policies would plunge the economy into a recession and lead to a full-blown sto ...

Just three months have passed since the publication of my last article on Novartis AG (NYSE: NVS ), "Why Novartis Is Still a 'Buy' After 15% Surge."With over two decades of dedicated experience in investment, Allka Research has been a guiding force for individuals seeking lucrative opportunities. Its conservative approach sets it apart, consistently unearthing undervalued assets within the realms of ETFs, commodities, technology, and pharmaceutical companies.Allka Research's journey in the investment landsc ...

Just three months have passed since the publication of my last article on Novartis AG (NYSE: NVS ), "Why Novartis Is Still a 'Buy' After 15% Surge."With over two decades of dedicated experience in investment, Allka Research has been a guiding force for individuals seeking lucrative opportunities. Its conservative approach sets it apart, consistently unearthing undervalued assets within the realms of ETFs, commodities, technology, and pharmaceutical companies.Allka Research's journey in the investment landsc ...

Summary of Novartis (NOVN.S) Conference Call Company Overview - **Company**: Novartis (NOVN.S) - **Market Cap**: SFr199.4 billion / $250.5 billion - **Enterprise Value**: SFr215.4 billion / $270.7 billion - **Current Price**: SFr101.78 - **12-Month Price Target**: SFr94.00, indicating a downside of approximately 7.6% from current levels [1][2] Industry Context - The EU Large Pharma sector has fragmented into three categories: - 'Growth Stocks' (e.g., Novo Nordisk, AstraZeneca) - 'Value Stocks/Innovation Laggards' (e.g., Roche, Novartis, Sanofi, GSK) - 'Special Situations' (e.g., Bayer) [1] Core Insights - **Performance**: Novartis has been the best performer among 'Value Stocks/Innovation Laggards' over the past 1, 3, and 5 years, with a significant share price increase of approximately 31% since early 2023 [1][17]. - **Valuation Concerns**: The current valuation of Novartis, trading at about 14x 2026E PE, is viewed as stretched, especially given the anticipated impact of generic competition [1][16]. - **Earnings Momentum**: The earnings momentum story is expected to stall post-launch of Entresto generics, which have already captured a 35% market share shortly after their introduction [1][33]. Financial Projections - **Revenue Forecasts**: - 2024: $50.32 billion - 2025E: $54.80 billion - 2026E: $56.51 billion - 2027E: $59.09 billion [3][11] - **EPS Growth**: - 2024: $7.74 - 2025E: $8.89 - 2026E: $9.13 - 2027E: $9.98 [3][11] Risks and Challenges - **Generic Competition**: The company faces significant risks from generic competition, particularly with the launch of Entresto generics, which is expected to lead to a structural reset in growth rates from high single-digit/low double-digit (HSD/LDD) to low single-digit/mid-single-digit (LSD/MSD) growth [1][14][16]. - **Patent Expirations**: Novartis has approximately $40 billion in peak sales at risk due to upcoming patent expirations, with significant revenue declines expected from 2030 onwards [1][14][25]. - **Pipeline Gaps**: The pipeline is not expected to fully offset the revenue losses from patent expirations, with a projected revenue drop to $45 billion by 2036 if current trends continue [1][28]. Other Important Insights - **Market Sentiment**: Despite recent outperformance, the stock's current multiple does not adequately reflect the risks associated with upcoming patent cliffs and generic competition [1][16][44]. - **M&A Potential**: Future M&A activities could provide a buffer against the impending patent cliffs, but this is contingent on the quality and price of potential acquisitions [1][15]. - **Pipeline Developments**: Limited value-driving catalysts are expected in the near term, with key clinical trials scheduled for 2026 that could influence future performance [1][15][49]. Conclusion - The downgrade to a "Sell" rating reflects concerns that Novartis' recent stock performance and multiple expansion do not adequately account for the significant risks posed by generic competition and patent expirations. The new target price of CHF94 suggests an 8% downside from current levels, indicating a cautious outlook for the company in the near to medium term [1][16].

Industry Overview - The biopharmaceutical industry is experiencing challenges due to ongoing tariffs and drug pricing pressures from the Trump administration, leading to a 5.7% decline in the combined market capitalisation of the top 20 global biopharmaceutical companies, from $3.92 trillion on March 31, 2025, to $3.70 trillion on June 30, 2025 [1] Company Performances - Alnylam achieved the largest market capitalisation growth of 21.8%, reaching $42.5 billion, driven by strong sales of its RNA interference therapeutic Amvuttra, which saw a 59% year-on-year increase in global sales to $310 million in Q1 2025 [2] - Novartis reported a 7.7% increase in market capitalisation in Q2 2025, bolstered by strong sales of blockbuster drugs such as Entresto, Cosentyx, Kesimpta, and Kisqali, along with the acquisition of Regulus Therapeutics for $1.7 billion, enhancing its renal disease portfolio [3] - Bristol Myers Squibb experienced the largest decline in market capitalisation at 22.9% due to mixed Q1 2025 financial results and negative trial outcomes, particularly the failure of its Phase III ARISE trial for Cobenfy [4] - Regeneron and Sanofi saw market capitalisation declines of 18.7% and 13.8%, respectively, following the failure of their partnered drug itepekimab in the Phase III AERIFY-2 trial, which aimed to reduce exacerbations of chronic obstructive pulmonary disease [5]

Core Viewpoint - Novartis is set to acquire Tourmaline Bio, Inc. for $1.4 billion, enhancing its cardiovascular pipeline with the addition of pacibekitug, an anti-IL-6 monoclonal antibody targeting atherosclerotic cardiovascular disease (ASCVD) [1][3][7] Acquisition Details - Novartis will pay $48 per share in cash to Tourmaline shareholders, with the transaction expected to close in the fourth quarter of 2025 [3][7] - The acquisition aligns with Novartis' strategy to expand its pipeline through strategic acquisitions [9] Product Information - Pacibekitug is designed to mitigate systemic inflammation in ASCVD and has shown high affinity binding to IL-6, a key cytokine in systemic inflammation [4][7] - Phase II TRANQUILITY study results indicated that pacibekitug reduced median high-sensitivity C-reactive protein (hs-CRP) levels by 85% to 86% with safety profiles comparable to placebo [5][7] Market Reaction - Following the announcement of the acquisition and promising study results, shares of Tourmaline Bio surged by 57.8% [4][8] Strategic Focus - Novartis has been actively pursuing acquisitions to strengthen its pipeline, including a recent licensing agreement with Arrowhead Pharmaceuticals for ARO-SNCA [9][10] - The company also acquired Regulus Therapeutics for $0.8 billion, with potential additional payments of $0.9 billion based on regulatory milestones [11]

Core Insights - Avidity Biosciences' shares have increased by 36% in the past month due to reports of Novartis' interest in acquiring the company, although discussions are still in early stages with no guarantees of a deal [1][7] - Avidity is a clinical-stage biotech focused on RNA therapeutics, with key programs targeting rare muscular diseases and expanding into precision cardiology [2][3] - Year-to-date, Avidity's shares have surged by 59%, significantly outperforming the industry average growth of 4% [6] Company Overview - Avidity Biosciences is developing RNA therapeutics for conditions such as myotonic dystrophy type 1, facioscapulohumeral muscular dystrophy, and Duchenne muscular dystrophy [2] - The company has established partnerships with major pharmaceutical companies like Bristol Myers and Eli Lilly to develop therapies for cardiovascular and immunology indications [3] Market Context - Novartis is reportedly interested in acquiring Avidity to mitigate potential revenue losses from generic competition affecting its top-selling drugs, such as Entresto, Gleevec, and Diovan [7][8] - The acquisition would enhance Novartis' pipeline in rare muscular diseases and strengthen its position in the cardiovascular market [8]

Investment Rating - The report indicates a strong interest in the small nucleic acid drug sector, particularly through acquisitions and partnerships, highlighting the potential for significant growth in this area [3][5][15]. Core Insights - Novartis is focusing on expanding its pipeline in rare disease treatments by acquiring Avidity Biosciences, a leader in the Antibody-Oligonucleotide Conjugates (AOC) field, which is valued at nearly $6 billion [3][11]. - The small nucleic acid drugs, including siRNA, ASO, and miRNA, are gaining traction due to their ability to target traditionally "undruggable" disease-causing genes, offering breakthrough treatment options for genetic, rare, and chronic diseases [4][9]. - The report emphasizes the importance of delivery technologies for small nucleic acid drugs, particularly the need for effective delivery systems to target tissues outside the liver, as 90% of disease-causing genes are expressed in non-liver tissues [8][9]. Summary by Sections Acquisition and Market Dynamics - Novartis has been actively acquiring companies to fill the pipeline gap created by upcoming patent expirations of key drugs, such as Entresto, which is projected to generate $7.822 billion in sales in 2024 [5][6]. - The report outlines several significant acquisitions in the small nucleic acid space, including Novartis's $9.7 billion acquisition of The Medicines Company and a $1.7 billion deal for Regulus Therapeutics [6][12]. Delivery Technology and Challenges - The report discusses the challenges faced by small nucleic acid drugs in terms of delivery, particularly the degradation by nucleases and the difficulty in penetrating the blood-brain barrier [7][8]. - Innovations in delivery systems, such as the FALCON platform by DTx Pharma, are highlighted as crucial for advancing the application of RNA therapies beyond liver-targeted treatments [8][10]. Competitive Landscape - The competitive landscape is characterized by major pharmaceutical companies, including Sanofi, Pfizer, and Eli Lilly, making significant investments in small nucleic acid drug technologies to capture the emerging market [6][10]. - Avidity Biosciences is noted as a key player with multiple clinical-stage AOC pipelines, including a breakthrough therapy for Duchenne Muscular Dystrophy [12][13]. Regulatory and Funding Environment - The report mentions supportive policies from the Chinese government aimed at promoting RNA and small nucleic acid drug development, including funding initiatives for innovative research [14][15]. - Recent financing activities in the small nucleic acid drug sector indicate growing investor interest, with several companies securing substantial funding to advance their research and development efforts [16].