A Big Upgrade for Novartis

After spending the past six months at a nearly perfect four-star ranking, Novartis (NYSE: NVS  ) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to return to the venerated five-star level. A total of 1,475 members have given their opinion on the drugmaker, with many of them offering analysis and commentary explaining the recent optimism.

Novartis is coming off a stellar first quarter, when earnings rose 49% and the top line increased 25%, and its strong fundamentals and growing pipeline of drugs make many CAPS members bullish on the stock. It has been expanding its opportunities through a recently signed deal with Array BioPharma (Nasdaq: ARRY  ) to license a group of cancer treatment candidates, and its generics unit recently purchased privately held Oriel Therapeutics to boost its portfolio. Novartis also expects to complete the purchase of a majority stake in Alcon (NYSE: ACL  ) in the second half of this year; it hopes to eventually buy the remaining stake.

Investors have also gained some more confidence with good news about progress in Novartis' pipeline. Organ rejection drug Zortress recently gained approval from the Food and Drug Administration, and the company reported that Afinitor met its late-stage study goals as a treatment for pancreatic cancer. Novartis looks to file for regulatory approval worldwide for the new use this year: Afinitor is already approved for kidney cancer patients who already tried Pfizer's (NYSE: PFE  ) Sutent or Bayer and Onyx Pharmaceuticals' (Nasdaq: ONXX  ) Nexavar. The company also recently gained unanimous support from an FDA advisory panel for Gilenia, its multiple sclerosis oral treatment. If Gilenia is approved, it would be a big step beyond injected or infused treatments from companies such as Pfizer and Teva Pharmaceutical (Nasdaq: TEVA  ) . Others like Merck KGaA and sanofi-aventis (NYSE: SNY  ) are developing oral treatments, too, but Gilenia could become the first on the market if approved, and could reach blockbuster status and $1 billion or more in annual sales.

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