Novartis initiated with "hold"

04.07.07 - ING Financial Markets

LONDON, July 4 (newratings.com) - Analysts at ING Financial Markets initiate coverage of Novartis (NOVN) with a "hold" rating. The 12-month target price is set to SFr72.

In a research note published this morning, the analysts mention that although the company?s pharmaceutical sales growth has outperformed the industry in past years, this trend would end in 2007, following the recent Galvus, Zelnorm and Lotrel disappointments. Novartis? healthy pipeline potential is being offset by the generic threats that the company is facing, the analysts say. Given increased approval hurdles, low R&D productivity, the challenging of patents and pricing pressures, the company has diversified into other spheres of healthcare, which carry lower risks but also lower rewards, ING Financial Markets adds.