Biotech Values

[stockbettor]

MNTA – A standstill agreement limiting NVS to a 13.5% equity stake in MNTA is in effect until July 2008:

Might not MNTA qualify as a "bolt-on" acquisition candidate for NVS? I note that the poison pill rights plan referenced in the MNTA ReadMeFirst section expired in November 2008.

New Novartis CEO targets vaccines, generics buys

BASEL, Switzerland (Reuters) - Joe Jimenez, the new chief executive of Swiss drugmaker Novartis (NOVN.VX), is targeting bolt-on acquisitions as the group digests the multibillion dollar acquisition of eyecare group Alcon (ACL.N).

Deals

Jimenez, who took over this month from long-serving CEO Daniel Vasella, said the group did not plan acquisitions on the same scale as the $39.3 billion it agreed to pay Nestle (NESN.VX) for a 77 percent stake in Alcon.

"We may go for smaller, bolt-on acquisitions to help build scale in vaccines, generics and consumer health, but we will not go for one of the same size and scale as Alcon for the foreseeable future," Jimenez told Novartis' annual shareholders' meeting.

Jimenez did not elaborate on the Alcon deal and Novartis' bid to buy out minority shareholders, originally worth $11.2 billion and dismissed by independent directors of the U.S. group as too low.

At 1200 GMT, Novartis shares were trading 0.8 percent higher at 59.55 Swiss francs by 1036 GMT, just ahead of the wider DJ Stoxx European healthcare index .SXDP.

ROSY PROSPECTS

Novartis' move to buy the majority of Alcon should insulate it against losing exclusivity on treatments like top-selling blood pressure drug Diovan, and analysts say its pipeline of new medicines is now looking a lot healthier.

That is shown by its earnings potential, trading at 13 times expected 2011 earnings and a premium to GlaxoSmithKline (GSK.L), AstraZeneca (AZN.L) and Sanofi-Aventis (SASY.PA) thanks to promising new drugs like multiple sclerosis pill Gilenia.

"Novartis has better prospects than many of its European competitors, except Roche (ROG.VX), to overcome the challenges posed by the patent cliff in the period between 2010 and 2012 with growth from new products and diversified earning streams," Sarasin analyst David Kaegi said.

"This justifies the valuation, which carries a modest premium versus its large pharma peers. Novartis is globally well positioned due to its strong pipeline, its diversification and high share of sales in fast expanding emerging market countries," he said.

Vasella, who remains the group's chairman, also confirmed Novartis' sales growth target for 2010, saying he expected group sales to grow at a mid-single-digit percentage rate this year.

(Writing by Sam Cage; Editing by David Holmes and Jon Loades-Carter)

http://www.reuters.com/article/idUSTRE61P33M20100226