Swiss pharmaceutical giant Novartis is buoyant about growth prospects and further protection of intellectual property rights in India, despite the setback it suffered in the patent dispute for its cancer drug Glivec last year.
According to Chief Executive Daniel Vasella, there is no change in the companys overall business strategy in India and the company is confident about long-term growth for its specialised cancer and cardio-vascular drugs as well as success in research and development.
We know it is difficult for coalition governments to take radical decisions (on issues centering patent protection) but we are confident that the pharmaceutical industry will grow rapidly in the coming years through enhanced patent protection, he told Business Standard, after announcing the the financial results for 2007.
One way or the other, they (the government) will have to make compromises, he said.
New strategies
Vasella, however, would not give details about the companys overall business and R&D strategies in India post the Chennai High Courts rejection of a patent appeal on Glivec.
Novartis has said that it is working on a new project to increase its presence in the countrys rural market. The project involves innovative pilot programmes to educate villagers about specific health problems and access to affordable medicines. Our aim is to provide medicines to people in the rural areas which do not have access to affordable drugs, said Udit Batra, strategic planner for Novartis in India.
Below expectations
Though Novartis net profit jumped 66 per cent to $11.97 billion with net sales growing by 11 per cent to over $38 billion in 2007, analysts said the performance in the last quarter left a lot to be desired.
The company had a poor spell in the US, its largest market, where sales dropped by one per cent, while growth in Europe, Asia and South America was a steady 10 per cent.
Part of the problem has been the intense competition from generic drug companies in the US, where sales of Lotrel (cardiac drug) and Lamisil (anti-fungal medication) dropped by more than $150 million.
The companys profits in the fourth quarter belied expectations as net income fell 45 per cent to $904 million and sales growth was the slowest ever. Consequently, Novartis shares dropped significantly, bucking a firmer trend on the Swiss Market Index.
Under investigation
Vasella said pharma growth would be negative in the US market, but he was confident of single-digit growth there.
In this context, the company plans to cut 2,500 jobs over the next two years which would cut costs by $1.6 billion annually by 2010.
Novartis has admitted that Sandoz, its ace profit-making generic company, is the focus of anti-trust investigations by the European Union, which is inquiring into alleged patent infringement and pricing policies.
Andreas Rummelt, head of Sandoz, said the company is fully cooperating with the EU to provide the data required, suggesting that Sandoz did not expect an adverse ruling.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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