UPDATE 2-New Novartis CEO targets vaccines, generics buys

* No acquisition on same scale as Alcon deal planned

* May also go for smaller buys in consumer health

* Analysts say Novartis better positioned than rivals

* Shares rise 0.8 pct

(Adds analyst comment, background, updates shares)

By Katie Reid

BASEL, Switzerland, Feb 26 (BestGrowthStock) – Joe Jimenez, the new
chief executive of Swiss drugmaker Novartis (NOVN.VX: ), is
targeting bolt-on acquisitions as the group digests the
multibillion dollar acquisition of eyecare group Alcon (ACL.N: ).

Jimenez, who took over this month from long-serving CEO
Daniel Vasella, said the group did not plan acquisitions on the
same scale as the $39.3 billion it agreed to pay Nestle
(NESN.VX: ) for a 77 percent stake in Alcon.

“We may go for smaller, bolt-on acquisitions to help build
scale in vaccines, generics and consumer health, but we will not
go for one of the same size and scale as Alcon for the
foreseeable future,” Jimenez told Novartis’ annual shareholders’
meeting.

Jimenez did not elaborate on the Alcon deal and Novartis’
bid to buy out minority shareholders, originally worth $11.2
billion and dismissed by independent directors of the U.S. group
as too low. [ID:nLDE60K031]

At 1200 GMT, Novartis shares were trading 0.8 percent higher
at 59.55 Swiss francs by 1036 GMT, just ahead of the wider DJ
Stoxx European healthcare index (.SXDP: ).

ROSY PROSPECTS

Novartis’ move to buy the majority of Alcon should insulate
it against losing exclusivity on treatments like top-selling
blood pressure drug Diovan, and analysts say its pipeline of new
medicines is now looking a lot healthier.

That is shown by its earnings potential, trading at 13 times
expected 2011 earnings and a premium to GlaxoSmithKline (GSK.L: ),
AstraZeneca (AZN.L: ) and Sanofi-Aventis (SASY.PA: ) thanks to
promising new drugs like multiple sclerosis pill Gilenia.

“Novartis has better prospects than many of its European
competitors, except Roche (ROG.VX: ), to overcome the challenges
posed by the patent cliff in the period between 2010 and 2012
with growth from new products and diversified earning streams,”
Sarasin analyst David Kaegi said.

“This justifies the valuation, which carries a modest
premium versus its large pharma peers. Novartis is globally well
positioned due to its strong pipeline, its diversification and
high share of sales in fast expanding emerging market
countries,” he said.

Vasella, who remains the group’s chairman, also confirmed
Novartis’ sales growth target for 2010, saying he expected group
sales to grow at a mid-single-digit percentage rate this year.

Investing Tools

(Writing by Sam Cage; Editing by David Holmes and Jon
Loades-Carter)

UPDATE 2-New Novartis CEO targets vaccines, generics buys