Novartis Reports 6% Operating Income Growth Driven by New Drug Portfolio Performance

Key Insights

• Novartis reported third-quarter operating income of $5.46 billion, representing a 6% increase driven by growth in new drug sales that offset stagnant revenue from established treatments.
• The Swiss pharmaceutical company has pursued aggressive expansion through acquisitions and licensing deals worth up to $30 billion this year, including a $12 billion acquisition of U.S. biotech Avidity.
• Novartis confirmed its 2025 guidance projecting high single-digit sales growth and low-teens percentage growth in adjusted operating income, having raised expectations twice during the current year.

Swiss pharmaceutical giant Novartis delivered solid third-quarter financial performance, with operating income rising 6% to $5.46 billion as new drug sales compensated for declining revenue from established treatments. The results, announced Tuesday, slightly exceeded analyst consensus estimates of $5.4 billion.

Strategic Acquisitions Drive Pipeline Expansion

The company has embarked on an ambitious acquisition strategy throughout 2024, committing up to $30 billion in deals and licensing agreements to strengthen its drug development pipeline. The most significant transaction involved a $12 billion acquisition of U.S. biotech company Avidity, reflecting Novartis's commitment to offsetting revenue losses from established treatments facing patent expiration.

This deal-making spree represents a strategic response to the pharmaceutical industry's ongoing challenge of maintaining growth as older blockbuster drugs lose patent protection and face generic competition.

Mixed Performance Across Drug Portfolio

While Novartis's newer therapeutic offerings demonstrated strong growth momentum, the company's established cardiovascular treatment Entresto showed stagnant revenue performance during the quarter. This contrast highlights the importance of the company's pipeline diversification strategy and its focus on developing next-generation treatments.

The adjusted operating income figures exclude special items, providing a clearer view of the company's underlying operational performance across its therapeutic portfolio.

Optimistic 2025 Outlook Maintained

Novartis reaffirmed its 2025 financial guidance, projecting sales growth in the high single-digit percentage range and adjusted operating income growth in the low-teens percentage. The company has demonstrated confidence in its strategic direction by raising expectations twice during the current year.

This guidance reflects management's belief that the combination of new drug launches and strategic acquisitions will continue driving performance despite headwinds from patent expirations affecting established products. The company's ability to maintain growth projections amid industry-wide challenges underscores the potential impact of its recent pipeline investments.