Novartis CEO Vas Narasimhan Reported High Single-Digit Sales Growth and Core Margin Expansion

Under the leadership of CEO Vas Narasimhan, Swiss pharma group Novartis reported robust full-year 2025 financial results, achieving high single-digit sales growth and significant expansion in core profitability, while setting the stage for a challenging 2026 outlook amid pending patent expirations. Net sales for the year rose 8% at constant currencies (cc) to USD 54.5 billion, driven by strong performance across priority brands and strategic pipeline advances.

The results, released in a detailed media announcement by Novartis, reflect resilient commercial execution despite generic pressures in key markets and are supported by active investment in growth platforms, disciplined operational management, and a diversified therapeutic portfolio.

Full-Year Financial Performance — Key Metrics

For the full year ended December 31, 2025:

• Net Sales: USD 54,532 million (+8% cc; +8% in USD) versus USD 50,317 million in 2024.

• Operating Income: USD 17,644 million (+25% cc; +21% in USD).

• Net Income: USD 13,967 million (+19% cc; +17% in USD).

• Core Operating Income: USD 21,889 million (+14% cc; +12% in USD).

• Core Net Income: USD 17,411 million (+12% cc; +11% in USD).

• Core EPS: USD 8.98 (+17% cc; +15% in USD).

• Free Cash Flow: USD 17,596 million (+8% in USD).

These results underscore not only top-line expansion but also strong core profitability, with Novartis achieving a core operating margin of 40.1% — an increase of 210 basis points at constant currency — demonstrating effective cost and portfolio management.

Commercial Drivers and Product Performance

Novartis’ 2025 sales growth was fueled by priority brands, which continued to build momentum across multiple therapy areas: oncology, immunology, neuroscience, and cardiovascular-renal-metabolic diseases. Key growth contributors included:

• Kisqali (+57% cc) — breast cancer therapy

• Kesimpta (+36% cc) — multiple sclerosis

• Pluvicto (+42% cc) — radioligand cancer therapy

• Scemblix (+85% cc) — leukemia

• Cosentyx (+8% cc) — immunology treatment

The broad strength of these brands reflects Novartis’ shift toward high-value products and multiple novel therapies, offsetting the impact of generic competition on older franchises.

Fourth Quarter Trends

In the fourth quarter of 2025, Novartis experienced a modest slowdown in net sales — reported at USD 13.3 billion, essentially flat at +1% in USD but -1% at constant currencies due in part to continued US generic erosion and revenue deduction adjustments impacting products such as Entresto and Promacta.

Despite this, core operating income for Q4 remained resilient, increasing +1% at constant currency, buoyed by persistent demand for priority brands, which continued strong momentum during the period.

Profitability, Margins & Cash Generation

Novartis demonstrated strong profitability improvements in 2025:

• Operating income grew 25% at cc, reflecting higher net sales and disciplined cost control.

• Core operating margin reached 40.1%, underscoring enhanced operational efficiency.

• Core EPS grew 17% at cc, highlighting meaningful earnings expansion.

• Free cash flow increased 8%, at USD 17.6 billion, providing substantial capital for reinvestment, dividends, and strategic initiatives.

These metrics reflect the company’s ability to convert revenue growth into earnings and cash, providing flexibility in capital allocation and reinforcing shareholder value.

R&D, Pipeline Milestones & Innovation

Novartis continued to invest strategically in its pipeline throughout 2025, with several notable innovation accomplishments in Q4:

• FDA approval of Itvisma, a gene therapy for spinal muscular atrophy (SMA), expanding the company’s first-in-class offerings in rare neurological diseases.

• Progress in regulatory and development milestones, including positive Phase III data for pelabresib in myelofibrosis and submissions for remibrutinib in chronic inducible urticaria.

• Expanded EU approval for Scemblix in a broader chronic myeloid leukemia patient population.

These pipeline achievements support Novartis’ long-term growth strategy, strengthening positions in high-impact therapeutic areas.

CEO Commentary — Vas Narasimhan

Novartis CEO Vas Narasimhan said,

“Novartis delivered strong performance in 2025, with high single-digit sales growth and core margin expansion despite significant US generic entries. Growth drivers Kisqali, Kesimpta, Pluvicto, Scemblix and Cosentyx continued their strong trajectory. We advanced several potential multi-blockbusters in our pipeline, with FDA approvals and positive Phase III readouts across multiple programs. We also strengthened our pipeline through strategic deals, including the proposed acquisition of Avidity Biosciences, and in 2026 we expect to grow through the largest patent expiry in Novartis history, underscoring the strength of our business.”

Narasimhan’s remarks highlight both resilience in 2025 and strategic focus on sustaining growth amid upcoming patent expirations.

Outlook for 2026

Looking ahead, Novartis provided 2026 guidance with expectations of low single-digit net sales growth and a low single-digit decline in core operating income at constant currency, acknowledging the impact of generic competition and patent expiries on key products.

Additional industry commentary also notes anticipation of a drop in operating profit in 2026 tied to patent expirations for several key drugs, including heart failure and autoimmune therapies, although the company remains focused on mid-term growth drivers and portfolio reinvigoration.

Novartis’ 2025 financial results demonstrate solid sales growth, strong profitability, and cash generation, anchored by high-value brands and pipeline advancements. While near-term headwinds from generic competition and upcoming patent expiries pose challenges for 2026, the company’s strategic investments in innovation and targeted therapies position it well for sustained long-term growth under CEO Vas Narasimhan’s leadership.

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