Novartis escaped one patent cliff. Now it faces another. Same company, new drop.
The Swiss drugmaker has been trying to build its next generation of blockbusters. The clinical trials have not cooperated. Disappointing data. Then more disappointing data. A series, in fact.
That's a pattern, not bad luck.
Picture a man who dodges a falling piano on the sidewalk. He steps into the street. A second piano is already in the air. He checks his watch, because he is a pharmaceutical executive, and watches are what they check.
Patents expire. Everyone knows this. It is written on the patent. Drugmakers act like the date is a surprise party thrown by the universe.
Novartis has the scientists, the labs and the Basel campus. What it needs is a pill that works. That is the whole business model. The pill is the product.
Retail traders will read this headline and buy the dip. They will call it a long-term hold. They will say "pipeline" the way people say "ghost." They have never seen one. They are sure it's there.
You will open a position anyway. You will set a price target based on a drug you cannot pronounce, for a disease you cannot spell. The trial will fail. You will blame the Fed.
The chart doesn't care about the pipeline. The chart has never cared. The chart will outlive Novartis, the patent and your brokerage account.
Novartis needs a miracle drug. You need a hobby. One of you is closer.
Photo by Myriam Zilles on Unsplash
Leave a Comment