Key Highlights
- Second quarter revenue reached $14.41 billion, representing 3% growth in US dollar terms driven by volume expansion
- Core operating profit climbed to $5.94 billion, surpassing Wall Street’s $5.31 billion consensus
- Kisqali revenue surged 44% to $1.7 billion; Scemblix sales nearly doubled reaching $562 million
- Entresto revenue plunged 50% to $1.18 billion amid intensifying US generic pressure
- Company maintained its 2026 financial outlook as shares gained approximately 2% in morning trading
Swiss pharmaceutical giant Novartis delivered second quarter revenue of $14.41 billion on Tuesday, marking a 3% increase in US dollar terms, as strength in its emerging drug portfolio compensated for significant weakness in cardiovascular medication Entresto.
Shares advanced roughly 2% in early market activity following the announcement, bringing the company’s market capitalization to approximately $310 billion after posting a 14% year-to-date increase.
The company’s core operating profit, a crucial non-IFRS metric closely monitored by Wall Street, reached $5.94 billion. This figure significantly exceeded the consensus analyst projection of $5.31 billion compiled by Visible Alpha.
Barclays research team highlighted that the earnings beat stemmed primarily from expense discipline. Core selling, general and administrative costs declined 6% to $3.24 billion during the three-month period.
Reported net income decreased 19% to $3.26 billion, pressured by elevated income tax obligations and interest costs. Diluted earnings per share contracted 17% to $1.71.
The breast cancer treatment Kisqali delivered 44% growth to $1.7 billion. Scemblix sales nearly doubled with 89% expansion to $562 million. Kesimpta increased 32% to $1.42 billion, Pluvicto rose 43% to $651 million, while Leqvio advanced 59% to $480 million.
These positive developments were partially counterbalanced by Entresto, which tumbled 50% to $1.18 billion as generic alternatives gained significant market share in the United States. The Street had anticipated $1.23 billion. Tasigna revenue also contracted 58% to $142 million.
Financial Outlook Maintained
Novartis reaffirmed its complete 2026 financial guidance. Management anticipates net sales will expand at a low single-digit percentage rate while core operating income will contract by a low single-digit percentage on a constant currency basis.
Chief Executive Officer Vas Narasimhan characterized the quarter as demonstrating “solid” revenue growth momentum and affirmed the organization remains “on track to deliver our full-year guidance and mid-term outlook.”
Free cash flow declined 12% to $5.56 billion. Net debt expanded to $39.4 billion as of June 30, increasing from $21.9 billion at December 31, 2025. The elevation was attributed to $15.3 billion allocated toward acquisitions and intangible asset purchases, a $9.1 billion dividend distribution, and $3.1 billion in share repurchase activity.
Development Pipeline Under Scrutiny
Market participants are closely monitoring three investigational compounds — pelacarsen, remibrutinib, and del-desiran. Wall Street analysts project this trio could collectively generate as much as $10 billion in peak yearly revenue.
This developmental pipeline carries significant strategic importance as Cosentyx and Kisqali, two of the company’s primary growth engines, face patent exclusivity expiration after 2030.
Cosentyx delivered 12% growth reaching $1.82 billion in the second quarter, partially enhanced by an approximately $100 million timing-related benefit in the United States.
In July, the company announced a definitive agreement to acquire Myricx Bio, a biotechnology firm specializing in antibody-drug conjugate development, with transaction completion anticipated during the latter half of 2026.
