A weak Q1 for Novartis that was heavily impacted by generics erosion showcases that the billions of dollars being spent by the pharma industry to shore up revenue streams amid a looming patent cliff will likely be well placed.
The Swiss drugmaker reported a 12% drop in profits to $4.9bn compared with the same period in 2025. The profit tumble came alongside a decline in net sales, which reached $13.1bn, 1% shy of the $13.2bn from Q1 2025. Novartis blamed US generic erosion, which, the company added, more than offset any growth drivers.
No more was this felt than with blockbuster Entresto (sacubitril/valsartan), the company’s heart failure medication that racked up $7.8bn in peak sales in 2025. It was a difficult Q1 for the drug this year, with sales plummeting 42% compared to the same quarter last year. Other drugs also suffered from generics market entry, including blood disorder medicine Promacta (eltrombopag) and blood cancer therapy Tasigna (nilotinib).
On an earnings call, Novartis’ chief financial officer Mukul Mehta admitted a difficult continuation of this year lies in wait.
“H1 will be impacted by a tough previous year [baseline] following US generic entries,” Mehta commented.
Novartis expects Q2 sales to decline by low single digits, with full-year net sales in the low single-digit growth window. For core operating income, the pharma company anticipates high single to low double-digit decline in Q2. Profits for the full year are forecast to decline by low single digits, as per Mehta.
Despite a 15% drop in earnings per share (EPS) for Novartis’ Q1, Citi analysts highlighted strong performance from priority brands such as Kisqali (ribociclib) and Kesimpta (ofatumumab).
M&A bolsters pipelines amid patent expirations
Novartis is just one of many pharma companies experiencing loss of exclusivity for major revenue-generating drugs. More are on the way too – the wave of upcoming drug patent expiries is anticipated to be one of the largest to hit the industry. A July 2025 report by GlobalData projects that a significant share of global drug sales under patent protection will decline by 2030. Only 4% of global drug sales will have patent protection, compared to 12% and 6% in 2022 and 2024.
The looming patent cliff was a key force behind big pharma’s dealmaking spree in 2025, which significantly outperformed 2024 in terms of deal value. The second largest deal of last year was conducted by Novartis when it acquired RNA specialist Avidity Biosciences for $12bn. From that deal, Novartis added three late-stage medicines for neuromuscular disease to its pipeline.
Novartis CEO Vas Narasimhan pointed to the deal in the Q1 earnings call as a point of optimism, given that several catalysts for the assets are expected this year. This includes a US Food and Drug Administration (FDA) submission for Duchenne muscular dystrophy (DMD) candidate del-zota and a Phase III readout from del-desiran in myotonic dystrophy type 1 (DM1).
Commenting on the deal, Narasimhan said: “We’re increasingly excited about the opportunity we’re seeing in the pipeline to address more forms of DMD as well as apply the technology of antibody oligonucleotide conjugates to our own internal pipeline.
“We think that was the right decision and everything that we’ve seen since completing the acquisition continues to confirm that.”
Novartis has continued its activity in the dealmaking arena this year. In March 2026, it agreed to acquire cancer therapy developer Synnovation Therapeutics in a deal worth up to $3bn. In the same month, Novartis agreed to buy allergy specialist Excellergy for up to $2bn.
M&A is not always the answer, however. Several compounds developed in-house at Novartis are projected to fuel the company’s long-term growth. This includes remibrutinib, a drug already approved under the brand name Rhapsido, for multiple sclerosis (MS). The asset is also in further trials for hidradenitis suppurativa (HS), a painful skin condition.
Across all current and potential future indications, remibrutinib is forecast to generate $2.6bn in sales in 2031, as per Pharmaceutical Technology’s parent company, GlobalData.
Further milestones planned in H2 for Novartis include readouts for IgG1 monoclonal antibody ianalumab – a product that the company believes has blockbuster potential. Novartis acquired the drug in its $2.9bn buyout of MorphoSys.
In a research note, Citi analyst Graham Parry commented: “We continue to see scope for Novartis to beat consensus [with its sales guidance] and flagging potential for 2H26 pipeline readouts to increase this further.”
