Despite a lacklustre start to the year, Novartis seems to have overcome its financial slump, reporting operating profits in Q2 that exceeded analyst expectations.
The Swiss drugmaker’s core operating income for the quarter was $5.94bn, representing flat year-over-year growth. However, this was ahead of analyst expectations of $5.31bn via Visible Alpha. Quarterly sales grew 1% at constant currency to $14.1bn, which was a 3% beat on expectations as per a research note from Citi analysts.
Novartis is undergoing one of the most significant portfolio challenges in its history, with loss of exclusivities affecting several of its key assets. The most important in this group is blockbuster heart failure medication Entresto (sacubitril/valsartan).
The drug racked up $7.8bn in peak sales in 2025, though revenue has been plummeting since the core US patent expired last year. That led to a weak Q1 for the company, with profits down 12%. Entresto sales dropped 42% in Q1, and the story has continued into Q2 with the medicine’s sales declining 50%. Other drugs are also suffering from generics market entry, including blood disorder medicine Promacta (eltrombopag) and blood cancer therapy Tasigna (nilotinib).
However, in positive momentum for Novartis, new medicines growth meant the drugmaker has stemmed the tide in Q2. Breast cancer drug Kisqali (ribociclib) continued to do much of the heavy lifting, growing 43% compared to the same quarter last year to $1.7bn. Kesimpta (ofatumumab), a multiple sclerosis drug, generated $1.4bn, an increase of 32%. Oncology assets Scemblix (asciminib) and Pluvicto also contributed as growth drivers, alongside cholesterol-lowering injection Leqvio (inclisiran). Scemblix was the highest-growth medication amongst Novartis’ priority brands, up 89% from last year’s same quarter due to strong momentum among newly diagnosed chronic myeloid leukaemia patients.
Looking ahead, Novartis reaffirmed its 2026 guidance of low single-digit growth for net sales. Core operating income is expected to decline low single-digit. The company has key trial readouts and new launches to lean on. Chief among these is Bruton's tyrosine kinase (BTK) inhibitor Rhapsido (remibrutinib). The drug has been racking up regulatory wins over the past year in chronic spontaneous urticaria (CSU), a significant market opportunity. Citi analysts already highlighted a “solid CSU launch, with strong early US uptake” for the drug, which is also approved for the skin disorder in Europe.
Novartis CEO Vas Narasimhan said: “Novartis delivered a solid second quarter, returning to sales growth driven by continued momentum from Kisqali, Kesimpta, Scemblix and Pluvicto. We are encouraged by the early trajectory of our recent launches, Rhapsido in CSU and Itvisma. We also made meaningful pipeline progress, highlighted by updated Kisqali overall survival data in early breast cancer and the FDA accelerated approval submission for del-zota in DMD. We are on track for multiple important readouts ahead in the second half and remain on track to deliver our full-year guidance and mid-term outlook.”
