Auteur(s) : Elistratov Léonid, Meskini, Faiza, Niang, Ibrahima, Querenghi, Félicia
Directeur : Landagaray Patrice
Composante : EMS
Date de création : 30-06-2018

Description : Finance, Novartis is the world's leading company in the pharmaceutical industry whose mission is to “discover new ways to improve and extend people’s lives”. In fact, it concentrates its efforts into developing and commercializing new products in sectors where customers’ needs are highly unmet. In order to do so, Novartis maintains a very advanced R-D activity. It indeed supervises nowadays over 200 projects in clinical development worldwide and dedicates USD 9.0 billion to its R-D expenses. Between 2012 and 2016, Novartis averaged a yearly number of US approvals for new molecules increasing 46% in comparison to 2007-2011. Novartis deploys its activities towards three different business units: prescription and generic pharmaceutical products, biosimilars, surgical and eye-care products that are split into 29 different brands. It occupies a leading position with a 5.5% world market share among which 58.4% of the revenues are made from the world’s most powerful economies, which helps comfort the firm's leadership. Moreover, Novartis manages to constantly make both strategic and pragmatic acquisitions to diversify and enlarge its pipeline. The company managed to maintain a tremendous level of revenues (CHF 47.8 billion) despite its vaccine drugs section being dismantled in 2015, on one hand, which led to considerable divestment gains along with temporal slump of the operating margin (-5.64%) and net margin (-40.80%) within the period of 2014-2016. On the other hand, Novartis made huge investments into the development of new innovative drugs through loans, which considerably broadened its level of indebtedness (Debt/Equity Ratio going to 64% in 2016 from 57% in 2014) and consequently affected its Asset turnover ratio (-20.70%) as sales remained quite stable whereas the capital employed increased in 2016. Nonetheless, the company still presents a positive leverage as its after-tax ROCE remained above the WACC within the period even though it nearly dropped by 60% because of a decreasing operating profit (-30%). On the meantime, investors remained optimistic regarding the company’s ability to generate growing revenues in the future as the P/E ratio is still very high at 26.65 in 2016, given that it was at 23.97 in 2014. As a matter of fact, growing share of distributed dividends (going from 68% in 2014 to 96% in 2016) must be very attractive, but the company must be watchful of a potentially weakened liquidity and shortened cash availability. Finally, we conducted a literature review based on the the work of Joseph A. DiMasi, Henry F. Grabowski and Ronald W. Hansen in their new article published in 2016, quantifying an estimate of overall R-D costs in the pharmaceutical industry at USD 2,870 million and the cost of the development of a new drug at USD 802 million in average. The question arising from this is: what are the factors of the evolution in R-D costs in the pharmaceutical industry? The discussion we conducted upon this theme allowed us to assess the intensity of innovation the pharmaceutical sector demands from its stakeholders in order to be competitive. Throughout all the period of our financial analysis, Novartis has proved to be one of the most consistent firms, if not the most, in terms of investments and innovative drug launches.
Mots-clés libres : Novartis, Novartis, financial analysis, case study, analyse financière, étude de cas, 650 Gestion et organisation de l'entreprise
Couverture : FR