Novartis AG (NVS) has agreed to pay $678 million to settle a civil U.S. lawsuit which claimed that the Swiss drugmaker allegedly paid healthcare professionals kickbacks to prescribe its drugs and organized sham speaker events.
The drugmaker finalized settlements with the US Attorney’s Office for the Southern District of New York, resolving a civil suit, which involved claims related to sham speaker programs and other promotional events conducted from 2002 through 2011 by its U.S. unit Novartis Pharmaceuticals Corp.
“Today’s settlements are consistent with Novartis commitment to resolve and learn from legacy compliance matters. We are a different company today – with new leadership, a stronger culture, and a more comprehensive commitment to ethics embedded at the heart of our company,” Novartis CEO Vas Narasimhan. “With these agreements we mark an important milestone on our journey to build trust with society as we continue reimagining medicine to improve and extend lives all around the world.”
Novartis shares rose less than 1% to $87.85 in U.S. trading on Wednesday. Citigroup analyst Andrew Baum recently upgraded Novartis to Buy from Hold with a $108.9 price target, saying that shares are attractively valued.
Baum adds that Novartis’ value drivers are undervalued and he believes that the company will expand its cardiovascular franchise post Covid-19. Furthermore, the analyst thinks the market is underestimating its backlog of product launches in China.
Shares are still down more than 7% so far this year and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. The $112.44 average price target implies 28% upside potential in the next 12 months (See Novartis stock analysis on TipRanks)
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