The strong dollar struck Novartis
The bad year-over-year currency comparison hurt the bottom line as well. After adding in the cost of a bond it issued to pay for the acquisition of shares of Alcon
But difficult currency comparisons won't last forever, and Novartis is still headed in the right direction, even if the final numbers don't show it. So rather than dwelling on the past, let's look ahead, shall we?
Like almost all pharmaceutical companies, Novartis has drugs facing generic competition in a few years. Diovan, the company's blood pressure medication, may not be as big a household name as Pfizer's
Fortunately, Novartis seems to have a solution for the lost revenue: new drugs. Recently launched products, such as its new cancer drug, Afinitor, contributed 16% of pharmaceutical revenue this quarter, up from 10% last year.
Novartis could also see new growth in the coming years via follow-on biologics from its generic Sandoz division. While making generic versions of biotech drugs will have a lot of competition from companies like Teva Pharmaceutical
As long as it can keep growing sales, Novartis looks pretty cheap with its relatively low P/E and high dividend yield.
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