Will Novartis (NVS) Help You Retire Rich?

Novartis AG (ADR) (NYSE:NVS) has been going through the same phenomenon as many of its pharma peers, as patent-cliff issues have hit the company hard. With top-selling hypertension drug Diovan seeing higher competition from generics after having lost patent protection last September, Novartis will continue to see unfavorable comparisons through most of 2013.

But Novartis has a promising stable of drugs that could be able to restore sales. Lucentis, on which Novartis is partnering with Roche, treats macular degeneration. Although Regeneron Pharmaceuticals Inc (NASDAQ:REGN) has a competing drug, Eylea, that has done exceedingly well. Eylea hasn’t hurt Lucentis’s sales, though, at least to this point, as the macular-degeneration market has expanded because of aging populations and the expansion of Lucentis’ indications to treat diabetic macular edema. In addition, multiple-sclerosis treatment Gilenya is poised to make its own contribution to Novartis’ top-line growth even as the multibillion-dollar MS market heats up with more competition.

Meanwhile, where the real growth may lie is in Sandoz. With U.S. health-care reform stressing cost savings, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Novartis have both sought to position their respective generic businesses to take maximum advantage of the trend. With years to go before health-care laws fully take effect, it’s too early to tell whether Novartis AG (ADR) (NYSE:NVS) can grow from the opportunity, but it’s promising nevertheless.

For retirees and other conservative investors, a solid track record of dividend growth and a high yield offset to some extent a rich valuation for the stock. At somewhat cheaper prices, though, it would be a lot easier to recommend Novartis AG (ADR) (NYSE:NVS) as a promising piece of a core retirement portfolio.

The article Will Novartis Help You Retire Rich? originally appeared on Fool.com.

Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned.

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