Novartis Returns to Growth in Second Quarter and Reaffirms Annual Guidance

Growth Drivers and Headwinds

According to the company, growth was carried by priority brands, with volume increases contributing 18 percentage points, though partly absorbed by the 14-percentage-point impact of generic competition. Price developments had a negative impact of 3 percentage points, while exchange rates contributed a positive effect of 2 percentage points. Particularly strong gains came from Kisqali (+43 percent at constant exchange rates), Kesimpta (+32 percent), Scemblix (+89 percent), Pluvicto (+43 percent) and Leqvio (+59 percent).

Operating profit declined 2 percent to just under 4.8 billion dollars. For analysts, the core operating profit adjusted for various effects is the key figure: at a good 5.9 billion dollars, it remained stable. The core operating profit margin was 41.2 percent, a decline of 70 basis points at constant exchange rates.

Profit Under Pressure

Bottom line, net income came in at nearly 3.3 billion, compared with 4.0 billion in the prior-year period. The decline was mainly based on higher income taxes and higher interest expense, the company explained.

CEO Sees Pipeline on Track

Novartis erzielte im zweiten Quartal solide Ergebnisse und verzeichnete dank der anhaltenden Dynamik von Kisqali, Kesimpta, Scemblix und Pluvicto wieder Umsatzsteigerungen, sagte Konzernchef Vas Narasimhan. "Die anfängliche Entwicklung unserer jüngsten Markteinführungen, wie Rhapsido bei chronischer spontaner Urtikaria (CSU) und Itvisma, ist ermutigend. Darüber hinaus haben wir bedeutende Fortschritte in unserer Pipeline erzielt, insbesondere mit aktualisierten Daten zum Gesamtüberleben bei Brustkrebs im Frühstadium unter Kisqali sowie einem Antrag auf beschleunigte FDA-Zulassung für Del-Zota bei Duchenne-Muskeldystrophie (DMD)."

Novartis focuses on four therapeutic core areas (cardiovascular, renal and metabolic diseases; immunology; neurology; oncology). Geographically, the company is concentrating on growth in its priority markets: the United States, China, Germany and Japan.

Progress in Late-Stage Studies and Approvals

On the pipeline front, Novartis presented several results during the reporting period: For Kisqali, six-year follow-up data in early-stage breast cancer showed a clinically relevant overall survival benefit; the FDA granted pediatric exclusivity, extending the term of all existing patents listed in the Orange Book by six months. Phase III results in chronic inducible urticaria (CINDU) were presented at the congress of the European Academy of Allergy and Clinical Immunology (EAACI). Positive Phase I/II biomarker data were also reported for Del-Brax in facioscapulohumeral muscular dystrophy (FSHD).

On the regulatory front, Novartis also reported progress: in the second quarter, Rhapsido was approved for chronic spontaneous urticaria (CSU) in the EU and Japan. The European Commission approved Itvisma as the only gene replacement therapy for a broad population of patients with spinal muscular atrophy (SMA). In addition, the Biologics License Application for Del-Zota was submitted to the FDA for accelerated approval in Duchenne muscular dystrophy (DMD).

Outlook Confirmed

For full-year 2026, Novartis reaffirmed its guidance and continues to expect net sales growth and a decline in core operating profit, both in the low single-digit percentage range.

The company is thus keeping the outlook it had formulated in the spring, after the start of the year had fallen short of expectations due to the generics effect. The recovery in the second quarter and the pipeline milestones most recently achieved are expected to help make up this shortfall over the remainder of the year.