Key Highlights
- Novartis reported second-quarter core operating profit of $5.94 billion, beating analyst forecasts of roughly $5.31 billion, and kept its full-year 2026 guidance unchanged even as shares rose as much as 3.2%.
- Growth engines Kisqali (up 44% to $1.7 billion), Scemblix (nearly doubled to $562 million), and Cosentyx (up 12% to $1.82 billion) are helping offset a 50% decline in Entresto sales to $1.18 billion, as the heart drug faces generic competition in its largest market.
- CEO Vas Narasimhan pointed to three upcoming late-stage trial readouts, pelacarsen, remibrutinib, and del-desiran, representing a combined $10 billion peak annual sales opportunity, as the company leans on its internal pipeline rather than large-scale M&A to power its next phase of growth.
A Landmark Quarter Reinforcing Confidence in Novartis’ Growth Trajectory
Novartis’ second-quarter results send an encouraging signal to investors watching how the company navigates its most significant period of patent expiries to date. With core operating profit comfortably outpacing expectations and quarterly sales rising 1% on a constant-currency basis to $14.41 billion, ahead of prior guidance for growth to return in the back half of the year, the results reinforce the strength of Novartis’ current portfolio even as it prepares to absorb near-term cost pressures tied to new drug launches and pipeline investment.
Inside the Numbers: Strong Growth Products Offsetting the Entresto Patent Cliff
The quarter’s performance was powered by standout growth from key franchises. Kisqali sales climbed 44% to $1.7 billion, Scemblix nearly doubled to $562 million, and Cosentyx grew 12% to $1.82 billion, aided by a roughly $100 million US inventory stocking benefit. These gains helped cushion the impact of generic competition against Entresto, whose sales fell 50% to $1.18 billion in its largest market, with the company expecting a full-year decline of roughly $4 billion for the heart drug. CFO Mukul Mehta noted that temporary benefits lifted second-quarter sales by about 1% and core operating profit by about 5%, benefits the company expects to reverse as spending increases in the second half.
Looking Ahead: A $10 Billion Pipeline Bet on Internal Innovation
Rather than pursuing further large-scale acquisitions, Novartis is leaning firmly on its internal pipeline to sustain growth beyond the current patent cliff. CEO Vas Narasimhan highlighted three upcoming late-stage trial readouts, pelacarsen in cardiovascular disease, remibrutinib in multiple sclerosis, and del-desiran in myotonic dystrophy type 1, representing a combined peak annual sales opportunity of roughly $10 billion according to analyst estimates. “That first batch should come in the coming months,” Narasimhan told reporters, reaffirming his own commitment to lead the company through this next growth phase.
What This Means for Novartis’ Path Beyond the Patent Cliff
With a market capitalization of approximately $310 billion following a 14% share price rise this year, Novartis enters the second half of 2026 balancing near-term cost increases, including the integration of its $12 billion Avidity Biosciences acquisition, against a promising slate of pipeline catalysts. As the company absorbs higher research and launch spending ahead of these anticipated trial readouts, its steady core business performance and diversified growth franchises position it to navigate its most significant patent expiry period yet while continuing to invest confidently in the innovation set to define its next chapter.
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