Novartis Flexes Pipeline Muscle: Blockbuster Drugs, FDA Green Light, and a $5.7 Billion Biotech Bet
Published on 07/25/2026 at 18:25 | Redaktion boerse-global.de
Novartis delivered a second-quarter earnings beat that underscores a quiet transformation underway at the Swiss pharma giant. While headline revenue growth appears modest, the numbers behind the numbers tell a story of a portfolio in transition—one where a new generation of therapies is rapidly filling the gap left by aging blockbusters.
Net sales for the three months ended June 30 reached $14.408 billion, a 3 percent increase in reported US dollars and 1 percent on a currency-adjusted basis. Core earnings per share came in at $2.41, a 12 percent jump that comfortably exceeded analyst expectations. For the first half of the year, total revenue stood at $27.5 billion, though on a constant-currency basis that represented a 2 percent decline from the prior-year period.
The engine of that growth is a cluster of newer products that are gaining traction at remarkable speed. The breast cancer drug Kisqali posted a 43 percent currency-adjusted sales increase, while the multiple sclerosis therapy Kesimpta climbed 32 percent. Even more striking was the performance of Scemblix, the chronic myeloid leukemia treatment that surged 89 percent. The radioligand therapy Pluvicto added 43 percent, and the cholesterol drug Leqvio jumped 59 percent. Together, these products are more than offsetting the revenue erosion at Entresto, the heart failure medicine now facing generic competition.
Regulatory momentum has also been building. The US Food and Drug Administration granted full approval for Fabhalta (iptacopan) to slow kidney function decline in adults with primary IgA nephropathy, backed by Phase III data showing a 48 percent reduction in eGFR decline versus placebo over two years. In Europe and Japan, Rhapsido received the green light for chronic spontaneous urticaria, while Itvisma was approved in the EU for spinal muscular atrophy. Novartis also filed for approval of del-zota in Duchenne muscular dystrophy and reported positive early-stage data for del-brax in facioscapulohumeral muscular dystrophy.
Should investors sell immediately? Or is it worth buying Novartis?
A $5.7 Billion Bet on Protein Degradation
Alongside the earnings release, Novartis announced a licensing agreement with Monte Rosa Therapeutics worth up to $5.7 billion. The deal centers on protein degraders—a class of molecules designed to dismantle disease-causing proteins that have historically been difficult to target. The move bolsters Novartis's pipeline strategy, which already encompasses cell and gene therapies as well as its xRNA platform.
The company also highlighted six-year overall survival data for Kisqali in early breast cancer and noted that Germany's Federal Joint Committee had already recognized a "considerable additional benefit" for Scemblix in first-line chronic myeloid leukemia treatment, strengthening its reimbursement position in Europe's largest pharmaceutical market.
Guidance Holds Steady Amid Patent Cliff Concerns
Management reaffirmed its full-year 2026 outlook: net sales growth in the low single digits, with core operating income expected to decline in the low single digits due to investment spending and patent expirations. That cautious profit forecast stands in contrast to the strong core earnings performance in the second quarter, reflecting the balancing act Novartis faces as it navigates the loss of exclusivity on older products.
Analyst reactions were mixed but generally constructive. Bernstein Research raised its price target to 132.84 Swiss francs from 125.00, citing strong margin trends, though it kept a "Market-Perform" rating. JPMorgan maintained "Overweight" with a 135-franc target, calling the quarterly results solid. UBS was more restrained, sticking with "Neutral" and a 116-franc target, pointing to structural risks from patent cliffs beginning in 2029.
Share Buyback Continues; Stock Still Below Highs
Novartis remains active in returning capital to shareholders. Of the $10 billion buyback program launched in July 2025, roughly $6.1 billion remains available after first-half transactions. The next earnings report is scheduled for October 27, when the company will release third-quarter and nine-month results.
Novartis at a turning point? This analysis reveals what investors need to know now.
On the German exchange, the stock closed Friday at €136.10, down 0.56 percent on the day but up 15.16 percent year-to-date. That leaves it 5.68 percent below the 52-week high of €144.30 reached in late February.
The Indian subsidiary added a note of stability: Novartis India reported first-quarter net sales up 18.57 percent and net profit up 16.62 percent, with an operating margin of 33.63 percent—its highest in seven quarters—and no long-term debt on its books.
As Novartis marks the 30th anniversary of the Ciba-Geigy and Sandoz merger that created the modern company, the message from the second-quarter results is clear: the pipeline is delivering, but the market is waiting to see whether the new guard can fully compensate for the old guard's decline.
Ad
Novartis Stock: New Analysis - 25 July
Fresh Novartis information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
