This Is Why We Love Big Pharma

Porter & Co. High Conviction does not follow a regular schedule. We only publish it when we believe the recommendation is so certain to be a long-term winner that we’d be prepared to invest 100% of our capital into it.

To be clear, a high-conviction opportunity isn’t necessarily about how much a share price might appreciate – but rather, the probability that a share price will rise steadily over time. Sometimes, these situations may only result in a modest average annual gain… but it comes with far less risk than your average investment.

That’s the opportunity we’re presenting in this issue, with one of the pharmaceutical world’s most well-known and established brands. The company was founded in 1758. But over the last few years, the company has emerged as a Big Pharma leader while at the same time becoming an exciting growth story in the biotech world.

Talk about a Lindy business – which Porter describes as a company with excellent economics and long track records in the marketplace, of at least 20 years… This biotech firm has been at it for 268 years. And it continues to crush it.

Novartis (NYSE: NVS) traces its roots to a Basel, Switzerland, dye-works founded in 1758. The $300 billion market-cap company now sells medicines in around 80 countries, earned a 41.2% operating margin on $14.4 billion of sales in the most recent quarter, and converted $5.6 billion of that quarter’s revenue into cash. It paid shareholders a remarkable $7.8 billion in dividends last year.

Novartis has produced a first-in-class medicine in nearly every modern modality.

• Approved in 2001, Gleevec was the first drug designed to jam the single enzyme that drives chronic myeloid leukemia
• Approved in 2017, Kymriah was the first approved therapy that reprograms a patient’s own immune cells to hunt cancer
• Approved in 2017, Zolgensma delivers a working gene inside a virus to infants born without it
• Approved in 2018, Lutathera (and later Pluvicto) attach radiation to molecules that seek out tumors
• Approved in 2026, Fabhalta slows kidney function decline in IgA nephropathy, blocks part of the immune system’s complement cascade with a twice-daily capsule

The management still guides to 5% to 6% sales growth a year through 2030 because innovation in the pharma industry continues to produce new, higher-quality, patent-protected medicines. Novartis has re-stocked its patent portfolio with gene-silencing drugs. It is currently ramping sales of Leqvio – developed by Alnylam Pharmaceuticals (ALNY) – a twice-yearly cholesterol injection, which sold $1.2 billion in 2025 and $480 million in the June quarter alone, both up 59% year-over-year.

Plus – and this is the big one – we believe Novartis is going to win the race to the first Lipoprotein(a) target. Lp(a) is a cholesterol-carrying particle set almost entirely by the genes a person is born with. Diet does not move it. Exercise does not move it. Statins barely touch it. It causes heart attacks, strokes, and a narrowing of the aortic valve, and no approved drug lowers it.

Novartis enrolled 8,323 patients with established heart disease in Lp(a)HORIZON, the first trial ever run to prove that lowering Lp(a) prevents cardiovascular events rather than merely moving a laboratory number. Results arrive in the second half of this year. Novartis intends to file with the Food And Drug Administration (“FDA”) this year.

Novartis licensed its Lp(a) gene-silencing drug, called pelacarsen, from Ionis Pharmaceuticals (IONS) in February 2019, took worldwide responsibility for developing, manufacturing, and selling it, and has funded the 8,323-patient trial since.

An estimated 18.7 million American adults have established cardiovascular disease, and roughly 21% of them carry Lp(a) above the level Novartis used to enroll its trial – 3.9 million people in the U.S. alone. Only 2% of American cardiovascular patients have ever been tested for it.

In March 2026, the American College of Cardiology and the American Heart Association began recommending that every adult have Lp(a) measured at least once, and that the relatives of anyone with a high reading be tested too.

The three lead Lp(a) drugs are estimated to generate $5.6 billion combined by 2032. One estimate models pelacarsen above $3 billion at its peak. Our own model, built from the diagnosed population upward, produces $4 billion in 2032 annually and $13 billion annually by 2036.

Why Novartis Is High Conviction

If pelacarsen sells on the low side, $3 billion a year, Novartis collects about $2.4 billion of it. Ionis gets roughly $450 million. Royalty Pharma (RPRX) takes the remaining $150 million. Novartis keeps $4 out of every $5. The company that discovered this molecule, that spent three decades learning how to build it, will keep about 15 cents of every dollar it earns. That’s the power of Big Pharma.

And it gets better… Novartis trades at 18x trailing earnings and pays a 3% dividend. The huge opportunity in Lp(a) isn’t priced into the stock.

That’s why Porter will continue to recommend Big Pharma in our Porter & Co Biotechnology portfolio – and that’s why we are making Novartis part of High Conviction now. Novartis is likely to be one of the single biggest growth companies in the world over the next 20 years, despite its current (large) size.

Action to Take: Buy Novartis (NYSE: NVS) up to $165 per share

Porter & Co. Stevenson, Maryland

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