Novartis Faces First Profit Decline in Decade as Key Drug Patents Expire
核心洞察
Novartis forecasts its first annual operating profit decline in a decade for 2026, with a low single-digit percentage drop due to patent expiries on blockbuster drugs including heart failure (搜索) treatment Entresto.
The company reported a $4 billion sales hit from patent losses affecting Entresto, cancer (搜索) therapy Tasigna, and platelet booster Promacta/Revolade in the fourth quarter of 2025.
Despite near-term challenges, CEO Vas Narasimhan remains confident in mid-term growth prospects, citing strong performance from cancer (搜索) drugs Kisqali and Scemblix, plus $30 billion in recent acquisitions.
Novartis forecast its first annual drop in operating profit in a decade on Wednesday, projecting a low single-digit percentage decline for 2026 as the Swiss pharmaceutical giant grapples with patent expiries on several blockbuster drugs. The last such decline occurred in 2016, which included the impact of business spin-offs and sales.
The company's fourth-quarter sales fell 1% to $13.3 billion, primarily driven by the loss of market exclusivity for three major products in the final quarter of 2025: heart failure (搜索) drug Entresto (sacubitril/valsartan), cancer (搜索) therapy Tasigna (nilotinib), and platelet booster Promacta/Revolade (eltrombopag). The cumulative impact represents what CEO Vas Narasimhan described as "the largest patent expiry in Novartis history."
Patent Cliff Creates $4 Billion Revenue Impact
The patent losses are expected to create a $4 billion hit to sales in 2026, with the hangover continuing throughout the year. Novartis projected low single-digit gains in group sales for 2026, compared to analyst consensus expectations of approximately 6.6% revenue growth to $58.2 billion for the current year.
Analysts at Jefferies noted that the lower end of the company's implied 2026 profit guidance range of $21.3-$22 billion, assuming a 1% foreign-exchange tailwind, could prompt analysts to trim estimates that had averaged $21.8 billion. Novartis shares declined 1.8% following the announcement.
Growth Drivers Offset Patent Losses
Despite the near-term challenges, Narasimhan expressed confidence in the company's ability to navigate the patent cliff. "In 2026, we expect to grow through the largest patent expiry in Novartis history, underscoring the strength of our business, and remain well on track to deliver our mid-term guidance," he said.
The company is banking on strong performance from its growth portfolio, including cancer (搜索) drugs Kisqali (ribociclib) for breast cancer (搜索) and Scemblix (asciminib) for leukemia (搜索). Scemblix crossed the $1 billion sales threshold for the first time last year, reaching $1.3 billion, while cholesterol-lowering drug Leqvio (inclisiran) also surpassed $1 billion with $1.2 billion in sales.
Radiopharmaceutical Pluvicto emerged as a standout performer, crossing the $2 billion sales mark. The company also reported higher sales of multiple sclerosis (搜索) drug Kesimpta (ofatumumab) and psoriasis (搜索) treatment Cosentyx (secukinumab) in the fourth quarter.
Strategic Acquisitions and Pipeline Expansion
Novartis has invested heavily in pipeline expansion, spending $30 billion on deals in 2025 alone. The company is positioned to complete a $12 billion takeover of RNA drug developer Avidity Biosciences (搜索) in the coming months, adding to its strategic acquisition portfolio.
The company's IgA nephropathy (搜索) (IgAN) portfolio showed encouraging uptake, led by Vanrafia (搜索) and Fabhalta, with third candidate zigakibart advancing in late-stage development. Chronic spontaneous urticaria (搜索) therapy Rhapsido (搜索) (remibrutinib) demonstrated what Novartis characterized as "multi-blockbuster potential" with a long list of additional indications under investigation.
Robust Clinical Pipeline Activity
Looking ahead, Novartis expects seven pivotal trial readouts this year and 28 regulatory filings or approvals involving new drugs. Key candidates include immunology therapy ianalumab, Ionis-partnered cardiovascular drug pelacarsen, and Avidity's antibody-oligonucleotide conjugate delpacibart zotadirsen for Duchenne muscular dystrophy (搜索).
Incoming CFO Mukul Mehta, set to assume the role in March, indicated that adjusted operating income "really starts to grow in the second half of the year, which bodes very well for 2026 second half and 2027 and beyond."
Long-Term Growth Trajectory
The company maintains its mid-term guidance, modeling 5% to 6% annual sales growth from 2027 to 2030. However, another significant patent challenge looms with the expected expiry of $6.7 billion immunology drug Cosentyx around the end of the decade.
Novartis reported a 1% gain in fourth-quarter operating profit to $4.92 billion, meeting market expectations. The performance was supported by increased sales across multiple therapeutic areas, demonstrating the diversification of the company's revenue base beyond the patent-expiring products.