Redefinition of Blood Preasure = Oportunity

I am new to this board and was interested if anyone has any background with Swedish pharmaceutical Novartis (NVS). I am just starting to investigate them and here is why.

Article title: Blood pressure of 130 is the new ‘high,’ according to first update of guidelines in 14 years
https://www.washingtonpost.com/news/to-your-health/wp/2017/1…

“The American Heart Association, the American College of Cardiology and nine other groups redefined high blood pressure as a reading of 130 over 80, down from 140 over 90. The change, the first in 14 years, means that 46 percent of U.S. adults, many of them under the age of 45, now will be considered hypertensive. Under the previous guideline, 32 percent of U.S. adults had high blood pressure.”

Personally I disagree with this on many levels. It smells like big pharma manipulation to me. Yet it is what it is.

Hard to find recent data but as of 2012 The top two hypertension drugs making up 47% of all sales were Diovan and Diovan hydrochlorothiazide. Both are products of Novartis.
https://www.statista.com/statistics/242658/revenues-of-top-h…

At first glance Novartis appears to be a strong player with a solid balance sheet and steady market tying returns. (see stock chart for 1, 3 and 5 year)
Here is info on their third quarter: http://marketrealist.com/2017/11/novartis-perform-3q17/
Also Novartis is offering a 2.72% dividend which trails the industry average of 3.27%(dividend.com).

So what is the estimated impact of this change?
Now here is some logical speculation but speculation none the less that I want to investigate and quantify better. If diagnosis grows by 14% and, as according to the article, multi-drug approaches increase for those already on meds …. growth could be astronomical. Consider that if 75% of the market is not currently on a multi-drug treatment and half of that group is put on a more aggressive multi-drug treatment that would be an additional potential of 37% in sales growth. So rough speculation puts this new definitions impact to increase sales by 14% to 51%.

If there is no change in market share, Hypertension drugs produced about 231 million in Q3 2017 for Novartis. So estimated growth would be an additional 32 to 117 million spread out over maybe the next two years. That alone is not enough to blow a large market cap like Novartis over the top. But, it is enough to create a steady strong ramp which coupled with some recent drug wins like their Car T Cell Therapy and any new drugs in the pipeline might create a market beating winner for the next five years.
https://www.novartis.com/news/media-releases/novartis-receiv…

So my question is:
Are there any Fools out there who know more about or have a fact based opinion about Novartis and what do you think of this opportunity?

Thank you.
Mercurius

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I don’t really think this is a game changer. My doctor is on me all the time to bring down my blood pressure. I am 65, exercise regularly, eat lots of fish and vegetables etc. Frankly, I don’t see a big change in the numbers, and the meds have their own negative impacts on my life.

BTW, I am on the fringe of having high blood pressure, so a lot more people would be in the same boat. And I agree with your assessment that BIG-PHARM is pushing their product.

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@don952taylor

I completely understand Don. I own and operate a physical therapy business and the truth is there is no such thing as a “Norm” Everyone’s body is unique. Our chemistry has way to many wild variables to say that this is the line for everyone. I applaud what you are doing and if you have no high blood pressure symptoms then let the chips fall where they may. If however you have high blood pressure symptoms (beyond the number) then it is time to do more and that more may be a drug which will require weighing the side effects against the problem your trying to solve.

However, you and I are anomalies that are already factored into the market. What I mean is that a certain percentage of the population just follows protocol, a certain percentage can be talked into protocol, a certain percentage finds viable alternative solutions to the meds and a certain percentage are just stick-in-the-muds who say NO… well just because.

This population make up is the same for the segment of the population that were hypertension diagnosed prior to lowering the standard and it is the same for those newbies that will now be diagnosed due to lowering the standard. So the boost in sales can be predict based on the current population’s buying pattern.

Being in medicine I think what will happen is there will be some naysayers who logically refute the new numbers. However, marketing by big pharma and pressure from insurance companies to follow standards of protocol (because idiot insurance companies believe that is what quality of care means) will swing the tide and because the standard was adopted by all the industries know best organizations the standard will eventually carry. Thus my prediction that the impact in increased sales will be spread out over two years max.

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I completely agree, especially about your assessment of insurance companies and the med community. I could go on about why they are taking all of us for a ride, but this blog is about stocks and lets keep it that way.

Bottom line for medical community is more people taking more drugs, and they then have to manage the side effects.

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I recently learned that spending a bunch of time in bad traffic, trying to make an appointment on time, will raise my blood pressure enough to get the doctor to start telling me to change my diet, maybe take pills, etc. Every other reading in the weeks since then has been lower, to the point where my BP is now “normal” even by the new standards.

So, before you do anything else, take and retake your BP!

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