Novartis and its CEO may have gotten a black eye amid a dust-up over tainted research, but the pharma giant is still a buy, according to Jim Cramer during his exclusive video-conference call on Wednesday, Nov.
Despite the issues that have bubbled up related to its breakthrough drug for spinal muscular atrophy, Zolgensma, Novartis "has the newest pipeline with many drugs just beginning to have an impact on the company's bottom line," Cramer told members of his Action Alerts PLUS club for investors during an exclusive video-conference call.
Not that the issue with Zolgensma isn't embarrassing for Novartis.
Novartis CEO Vas Narasimhan acquired Zolgensma after buying the company that developed it, Avexis, only to have it revealed that some of the data behind the new drug had been falsified.
However, while the Food and Drug Administration has "come down hard" on Novartis as a result, the $425,000-a-year drug "has seen remarkable results," Cramer said.
Novartis' 3% dividend yield, and the fact "there is no evidence whatsoever that falsification would lead to pulling this one drug" should help Novartis restore its reputation as a new drug research powerhouse, Cramer said.
"Three months from now we will not be talking about tainted data from Novartis' new drug, we will be talking about strong revenues, and that should propel the stock higher," Cramer told club members.
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