A premium on Swiss drugmakerNovartis AG's stock is under threat as a thin portfolio of new drugs provides scant confidence in its hopes for a second-half recovery.
Novartis shares lost 12 percent of their value in 2007, knocked by delays to key products and the withdrawal of bowel drug Zelnorm from U.S. shelves, and have fallen a further 10 percent so far this year, despite job cuts and an improved dividend.
The stock now trades at 12 times forecast 2008 earnings, according to Reuters data, but is still at a premium to other European drug majors, which are also struggling to develop new drugs.
"The question is, how confident can you be about the re-acceleration given that their product portfolio is maturing?" said Luis Correia, a healthcare fund manager at private bank Clariden Leu.
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