By Bhanvi Satija and Marleen Kaesebier
LONDON, July 21 – Novartis exceeded second-quarter core operating profit forecasts on Tuesday, as cost control and sales of newer medicines helped it cushion a 50% drop in sales of its top-selling heart drug Entresto.
The Swiss drugmaker’s quarterly operating profit, adjusted for special items, rose 0.25% to $5.94 billion, above average analyst expectations of about $5.31 billion cited by Visible Alpha. The company’s shares rose about 2% in early trading.
Novartis, which has a market capitalization of some $310 billion after a 14% share rise so far this year, faces its most severe period of patent expiries, most notably for Entresto, which makes up about 10% of its total sales.
Barclays analysts said the profit beat was driven mostly by operating expense control, but added that Novartis’ unchanged 2026 guidance implied higher spending in the second half.
Novartis backed its full-year expectation of a low single-digit percentage decline in core operating profit, excluding currency swings.
Productivity gains helped reduce core selling, general and administrative expenses by 6% to $3.24 billion in the second quarter, it added.
RETURN TO SALES GROWTH
Novartis is leaning on cancer drugs Kisqali and Scemblix, as well as recent dealmaking to offset patent expiries.
Total sales for the quarter were up 1% on a constant currency basis at $14.41 billion, in line with analysts’ expectations. Novartis had previously guided to a return to sales growth in the second half of the year.
Kisqali sales grew 44% to $1.7 billion while Scemblix sales nearly doubled to $562 million from last year. Psoriasis drug Cosentyx also grew 12% to $1.82 billion, helped by a roughly $100 million one-off benefit in the U.S.
Entresto sales, meanwhile, slid 50% to $1.18 billion, hurt by generic competition in its largest market, the United States. Analysts were expecting sales of $1.23 billion.
Investors are increasingly focused on high-stakes trial data from three experimental drugs, pelacarsen, remibrutinib and del-desiran, which analysts estimate hold potential for $10 billion in peak annual sales.
Those drugs will shape Novartis’ growth beyond 2030, when Cosentyx and Kisqali also lose patent exclusivity.
(Reporting by Bhanvi Satija and Marleen Kaesebier; Editing by Miranda Murray, Lincoln Feast and Alexander Smith)
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