Novartis AG (ADR) (NVS) Beats Analyst Estimates; Is Expected To Perform Well Backed By Recent Deals

In an interview with Bloomberg, Odile Rundquist, who is an analyst at Helvea, discusses on the second Qtr. results of the world’s largest drug maker by revenue, Novartis AG (ADR) (NYSE:NVS).

“I would say first that they do not really miss estimates. I mean they were a touch below by 1% on the topline and 1% on the bottom line. So I mean it is really a very small miss,” said Rundquist.

She added that we needed to focus now on the three key divisions of the company which will be part of the continuing business of Novartis AG (ADR) (NYSE:NVS) i.e. Pharmaceutical, Alcon and Sandoz.

On the deal between Novartis AG (ADR) (NYSE:NVS) and Google Inc. (NASDAQ:GOOGL), Rundquist said that the deal is interesting for both the companies and the deal represents a new way to thinking in healthcare, by combining bio-technology healthcare with technology.

The technology being a non-invasive way of measuring glucose, could give real-time monitoring and treatment in case of Diabetes, said Rundquist.

On 32% of sales for the company being from so-called ‘growth products,’ Rundquist feels that it is a good figure considering many new launches since 2009 which form part of this category. She added that investors need to look at the data on Phase III of LCZ 696 in the coming months, which is a new drug for chronic heart failure and can become a $5 billion drug for the company.

In another interview, Bloomberg’s Sam Fazeli, speaking on the recent results of Novartis AG (ADR) (NYSE:NVS), said that structural changes from various deals like the one with GlaxoSmithKline plc (ADR) (NYSE:GSK) & Eli Lilly and Co (NYSE:LLY), won’t be reflecting in the company’s group financials this year, as these deals will be closing by early next year.

Fazeli added that the deal with Google Inc. (NASDAQ:GOOGL) will help in bringing more innovation into Google’s latest technology in terms of the type of lenses and that they need to convince diabetes patients also that this technology is as high-quality and sensitive as other available technologies.

“What will you see with this company is that as it products, and most pharma companies, as their products switch to more specialty care products; to more oncology type products, where the prices are healthier and the costs of selling them are lower, certainly less than if you were selling to every corner shop GP, if you like, the reality is that that automatically brings down the selling and administrative costs,” Fazeli said on lowering of administrative costs.

Disclosure: none