Novartis reported fourth‑quarter 2025 results that showed net sales of $13.34 billion, a 1% year‑over‑year increase in U.S. dollars and a 1% decline in constant currency. Core operating income rose to $4.93 billion, up 1% in U.S. dollars and 1% in constant currency, giving a core operating income margin of 37.0%, a 0.1‑percentage‑point lift in U.S. dollars and a 0.7‑percentage‑point lift in constant currency. Core earnings per share were $2.03, beating consensus estimates of $1.99 by $0.04, or 2% of the estimate.
The growth in net sales was driven by double‑digit increases in key oncology and immunology products. Kisqali sales climbed 44% to $1.32 billion, Kesimpta 27% to $1.23 billion, Cosentyx 11% to $1.81 billion, Scemblix 87% to $391 million, and Pluvicto 70% to $605 million. At the same time, generic competition and pricing pressures weighed on the portfolio, with a 15‑percentage‑point impact from generics and an additional 4‑percentage‑point impact from pricing in the quarter. The company also benefited from a $1.2 billion increase in government grant income and a $0.8 billion reduction in core SG&A expenses, largely due to lower marketing and sales investments, which helped offset the higher R&D spend of $1.1 billion.
Margin expansion was largely a result of the combined effect of higher government grant income, lower SG&A, and the mix shift toward higher‑margin products. The constant‑currency decline in sales was partially offset by the margin lift, reflecting the company’s ability to maintain pricing power in its core therapeutic areas. The 0.7‑percentage‑point constant‑currency lift in margin also signals that the company’s cost‑control initiatives are translating into profitability gains even as it invests heavily in its pipeline.
Management reiterated its 2026 outlook, projecting low single‑digit sales growth and a slight decline in core operating income for the year. The company cautioned that the first half of 2026 would be “depressed” due to the impending patent cliffs of Entresto and Promacta, but it expects the second half to recover as new launches, including Rhapsido and Pluvicto, gain traction. The company also highlighted its strategic acquisition of Avidity Biosciences for $12 billion, which will strengthen its late‑stage neuroscience pipeline.
Investors responded positively to the earnings, citing the EPS beat, strong performance of growth drivers, and the achievement of the 40% core margin goal ahead of schedule. Management emphasized that the company’s focus on innovation and pipeline development positions it to navigate the largest patent expiry in its history in 2026. CEO Vas Narasimhan noted that the company had achieved its 40% core margin target two years ahead of plan and that it was advancing several potential multi‑blockbuster candidates, including Rhapsido, Pluvicto, Itvisma, and ianalumab.
The company also announced a U.S. drug pricing agreement signed on December 19 2025, which will reduce prices for its innovative drugs and is expected to influence the 2026 outlook. In addition, the company’s Leqvio reached blockbuster status in 2025 and was added to China’s National Drug Reimbursement List, while Scemblix received expanded indications in Europe. These developments reinforce Novartis’s strategy of leveraging its growth engines to offset the impact of patent expirations.
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