Healthcare Business Recap: Novartis In COURT In India, Aetna PURCHASES Coventry

These were Monday’s top stories:

Novartis AG (NYSE:NVS) may face a rough road in India, where the government has rejected its request for a patent for its leading cancer-drug Glivec. The country is currently experiencing a stalling economy plus high inflation, and is more unpredictable and less friendly to foreign firms. Novartis will appear before the Supreme Court of India on Wednesday to plead its case.

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Aetna, Inc. (NYSE:AET) reports that it will purchase Coventry Health Care, Inc. (NYSE:CVH), in a transaction valued at $7.3 billion, which will include the assumption of the latter’s debt. Through the terms, Coventry shareholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, or $42.08 per share, which marks a bonus of 20 percent to the Friday closing price. This acquisition should add more than 5 million members to Aetna and swell the revenues from government from 23 percent to more than 30, and also should produce synergies of $400 million per year in 2015.

Looming patent expirations have top drug firms such as Eli Lilly and Company (NYSE:LLY) and Pfizer (NYSE:PFE) reassuring their investors that they will cover the problem by exploiting growth in emerging markets. However, slumping economies plus competition from local companies are pushing back expectations, and E&Y calculates a $47 billion deficit between the American firm’s sales expectations and what they might actually earn.

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