Novartis AG stock

Interested in investing in Novartis AG shares? Read this guide for some information about the company.

Currently, the stock market is subject to fluctuations, but there is one sector that promises stability: pharmaceuticals. Aging populations, the appearance of new diseases, and threats to health due to changes in lifestyle are making the pharmaceutical industry a key sector.

Novartis is a noteworthy group in the field of research and production of drugs and health products. The pharmaceutical company achieved revenue of $48.6 billion in 2020. It recorded 44.21% growth compared to 2019

Is the company’s financial health reason enough to buy Novartis stock? Read on for relevant information about the company before taking the plunge. 

History of Novartis AG 

Novartis AG is a Swiss pharmaceutical company based in Basel that has made innovation its main driver. The company was officially founded in March 1996, but its history goes back more than 260 years.

Novartis was created through the merger of three companies. First there was Geigy, a chemical and pharmaceutical trading company founded in 1758, which joined forces with Ciba in 1992. The latter is a chemical company that was founded in Basel in 1888. Ciba-Geigy then merged with Sandoz, a pharmaceutical company created in 1886, in 1996 to create Novartis.

In 2020, Novartis AG was ranked as the third  largest pharmaceutical company in the world in terms of sales. It has been in the top three of this ranking for five consecutive years. 

Novartis AG business lines

Novartis provides innovative medicines and medical solutions to meet the changing needs of patients. 

The group's activities are divided among Sandoz, a world leader in generic medicine, Alcon, which specializes in eye care (drugs, products and surgical devices for ophthalmic problems) and Novartis Institutes for BioMedical Research (NIBR), a global network of pharmaceutical research institutes. 

Novartis also collaborates with other companies. In the second quarter of 2021, it invested in Artio Pharma and then signed an agreement with iTheranostics regarding oncology research. 

Its sales are divided as follows:

  • 79.5% : pharmaceutical products for the treatment of cancer, hormonal disorders, cardiovascular diseases, respiratory and dermatological problems, central nervous system dysfunctions, etc. 
  • 20.5% : generic drugs that aim to make quality drugs accessible to a greater number of patients.

Stock market data 

Novartis AG shares are listed on the Six Swiss Exchange. On April 16, 2021, the share traded at CHF 80.53 (EUR 73.14). Here are some important figures about the group: 

  • Number of shares issued : 2,467,060,920
  • Market capitalization : 216.1 billion USD 
  • Revenues in 2020 : 48.6 billion USD

Things to consider before investing in Novartis AG shares 

Factors supporting the rise in the Novartis share price 

The pharmaceutical market is booming, with healthcare spending increasing every year. Novartis has operations in more than 140 countries, meaning its stock does not come with the risks inherent to investing in a limited geographical area.  What’s more, Novartis products are diverse, ranging from medicines to vaccines to veterinary products. When it comes to patent protection, Novartis invests in cutting-edge research and these discoveries are protected by patents. 

Risks to Novartis share prices

Risks include high product prices: Novartis' production costs result in high product prices, which can undermine their competitiveness. What’s more, a patent issue with India may jeopardize its relationship with this vast country, whose market is very important for the group.