Novartis A Buy At Chardan

Chardan Capital’s Gbola Amusa believes Novartis AG (ADR) NVS has the “potential for excess shareholder returns over the long-term by generating shared value for society through performance on 1) disruptive or sustainable innovation, 2) access to medicines initiatives, and/or 3) healthcare cost-benefit technologies.”

Amusa initiated coverage on the company with a Buy rating and price target of $95.

Wet AMD Franchise

The analyst mentioned that while the market has been focused on the ramp of Entresto for heart failure and Cosentyx for inflammation in the near term, Novartis had the ability to improve in immuno-oncology in the medium term, while being able to overcome the generics “cliff” expected in 2019–2020.

Related Link: Out With The Old, In With The New: State Agencies Seem To Prefer Marijuana Over Opioids

Amusa prefers to focus instead on the company’s emerging wet AMD franchise, “where despite Novartis' clear competencies in wet AMD, consensus models just $811 million in combined 2022E sales for two assets that are due to soon report pivotal and potentially paradigm-shifting pivotal data.”

Anti-VEGF

The analyst expects the anti-VEGF therapy add-on, Fovista, could generate $1.5 billion in risk-adjusted ex-U.S. sales by 2022 and $3.3 billion in risk-adjusted worldwide sales.

“We model the anti-VEGF therapy, RTH258, can generate $964 million in 2022E risk-adjusted sales, as it offers the potential for quarterly dosing, which is supportive of what we think will be an emerging theme of treatment burden reduction in anti-VEGF wet AMD markets,” AMusa stated.

Full ratings data available on Benzinga Pro.