General presentation of the Novartis Company:
You have undoubtedly heard about the Novartis group, even if it’s just the name that rings a bell. This company is currently in fact one of the global leaders in the pharmaceutical sector. Although the majority of its turnover is generated through pharmaceutical products this company also operates its activities in other sectors such as ocular care, generic medicines, vaccines, diagnostic products and others.
The majority of its profits are generated in Switzerland but its activities are spread throughout Europe, the United States, Japan and in South America.
Know the competition to Novartis shares:
The pharmaceutical company Novartis is currently one of the leaders in the pharmaceutical sector worldwide but is facing increasingly strong competition, notably relating to the generic medicine market. It is therefore extremely important to complete a comprehensive study of this competition and follow the financial reports and events of large companies in this sector to trade successfully in Novartis shares.
- Pfizer: The major competitor to Novartis is still Pfizer with which it battles for first position.
- Sanofi, Merck and Roche: Other large groups are hot on its heels such as Sanofi, Merck and Roche.
- Bayer Group: Finally, the Bayer Group could represent a threat to Novartis following its acquisition of Monsanto which was planned for the end of 2017.
- Other competitors: Then we find other lesser competitors such as Astrazeneca, GSK, J & J, and Lilly which however it is still important to monitor in order to anticipate any future gains of the market share by them.
The strategic alliances implemented by the Novartis Group:
- GlaxoSmithKline: In 2014 Novartis announced an asset exchange agreement with the British company GlaxoSmithKline. Novartis stated that it would purchase the oncology products division of GSK for 16 billion dollars and would cede its vaccine activities, except for that of flu, to GSK for 7.05 billion dollars to which it would add the royalties.
- Google: In the same year Google approached Novartis with a partnership proposal related to a sector undergoing full expansion, smart health. In particular a project aimed at facilitating the life of diabetics through smart contact lenses that could detect their blood sugar rate. To assist this project in advancing faster the company signed a partnership with Alcon, a subsidiary of the pharmaceutical giant Novartis, on the 15 July 2014.
- Propeller Health: In 2017 Novartis also became a partner of Propeller Health for the creation of smart inhalers that should take form over the coming months.
Introduction and quotation of Novartis shares:
The Novartis share price is quoted on the SIX Swiss Stock Exchange. Its shares are also included in the calculation of the Stoxx Europe 50 stock market index.
Stock market data
To go further and thereby enable you to better understand the position Novartis holds on the stock markets we offer you the opportunity here to learn more general information that is still however important relating to this company and its share price on the stock markets.
- In 2017, the Novartis Company boasted a total stock market capital of around 202,550.55 million Swiss Francs.
- The total number of shares issued by the Novartis Company and currently in circulation on the stock markets is 2,374,059,000.
- The Novartis share price is currently quoted on the Main Standard market of the SIX Swiss Stock Exchange.
- The Novartis Company is also included in the European stock market index FTSE Eurotop 100 and is therefore one of the top 100 European companies in terms of stock market capital.
- Its shareholders are as follows: 12% is held by J P Morgan Chase Bank, 8.50% by Chase Nominees, 5% by the Capital Group Companies, 5% by BlackRock, 4.40% by the Bank of New York Mellon, 3.90% by Nortrust Nominees, 2.60% by the Novartis Foundation for Employees Participation and 2.02% by Norges Bank.
To understand the events that have influenced the historical technical analysis of the Novartis share price it is advisable to review the economical and financial history of this company over the last few decades. To assist you here are the significant dates and events you should be aware of.
Novartis came into being following a merger between Sandoz and Ciba-Geigy in 1996. This company has been entirely dedicated to the health sector since its beginning.
- In 2000, a new company named Syngenta merged the food industry elements of the companies Novartis and AstraZeneca.
- In 2005 the group purchased the Hexal Company, a specialist in generic medicines.
- In 2006 it purchased the Chiron Corporation.
- In 2007 Novartis sold its Gerber subsidiary to the Nestle Group.
- In 2008 Novartis purchased 25% of the Alcon shares then acquired the entire company in 2010.
- In 2012, the group acquired the Fougera Pharmaceutical Company.
- In 2013 Novartis announced the sale of its blood transfusion test subsidiary to Grifols.
- In 2014 the group bought out the biotech company CoStim. In the same year it signed several asset exchanges with Glaxo Smith Kline and Eli Lilly and acquired the oncology activities of the former against part of its vaccine activities. It sold its animal health activities to Eli Lilly. Still in 2014 Novartis sold its 43% part in the LTS Lohmann Company then invested in Gamida Cell.
- In 2015 the Novartis group purchased the Aduro Group for 750 million dollars.
- In 2016 the group announced the buyout of Selexys Pharmaceuticals, specialist in haematology for 665 million dollars. In the same year Novartis also orchestrated a buyout of the group Encore Vision that specialised in presbyopia.
All you simply need to do now is combine this important information and major events with events from the historical stock market charts of Novartis shares to examine how they can influence this share price. In this way you can use the information obtained when preparing a fundamental analysis for anticipating future movements.
The advantages and strengths of Novartis shares as a stock market asset :
First of all, of course, the international dimension of the company is a strength. The Novartis Group has pharmaceutical operations in no fewer than 140 countries around the world, protecting it from potential risks associated with a single geographic region.
It should also be noted that the core business of Novartis is in a sector which is particularly valued for its very broad market, namely pharmaceuticals. However, the Group has diversified its products within this sector with medical products as well as vaccines, consumer health products, generic pharmaceuticals and animal health and veterinary care products. In this way, it is multiplying its targets and areas of intervention.
Thanks to the Novartis Biotechnology subsidiary, the Novartis group is a true leader in its field of activity, conducting a great deal of research in order to develop increasingly effective treatments. Of course, the group protects its most innovative products by means of patents in order to be the only one to be able to exploit them.
Novartis also tends to develop its activities through a very important policy of mergers and acquisitions. Novartis regularly acquires companies specializing in various fields, thereby strengthening its brand and expanding the scope of its activities.
The group also enjoys a good brand image with the general public thanks to various initiatives that have been hailed by critics. These include corporate wellness, which was the group's first specialized health initiative, but also its commitment to the Convention on Biological Diversity, or CBD, which guarantees continued access to biological resources in developing countries for research and development purposes.
It is also worth noting that Novartis is a company that is valued by its customers, having been named one of the world's most respected companies in 2005, which continues to give Novartis a high level of trust from its major customers.
Finally, the final advantage of the Novartis Group is, of course, its workforce. Today, the company employs more than 120,000 people around the world who help develop new products and bring them to market.
Disadvantages and weaknesses of the Novartis share as a stock market asset :
First of all, it should be recalled that with regard to the brand image of this company, Novartis has been subject to some controversy with regard to the advertising of some of its products, which may have undermined the confidence of the general public.
The group also encountered some problems after the introduction of certain restrictive laws in India concerning the patenting of pharmaceutical products. Novartis has a significant presence in the Indian market.
Another weakness is a particularly high cost structure. The company's highly diversified product lines also lead to an increase in the necessary production structures. This represents a significant cost for the group. The group has to wait a few years before it is able to cover the investments made and start to generate profits on some new products.
Finally, although the pharmaceuticals sector is considered to be a very buoyant sector in the long term, the cyclical nature of some of the group's activities must also be taken into account. This applies in particular to products that are designed to meet very current needs and which could therefore become obsolete in the future. Some of these products are frequently abandoned at an advanced stage of development because they no longer find a target on the market. These product discontinuations also result in substantial losses for Novartis, which has had to invest substantial amounts in the initial development of some of these products.
Although the faults of this stock seem to be less numerous than its qualities, you should be inspired by them to carry out your analyses of this stock since they can have a non-negligible influence on its medium or long term evolution on the charts.