Novartis closed 2025 with solid full-year growth and expanding margins, even as the company’s fourth-quarter results reflected mounting pressure from U.S. generic competition and revenue adjustments tied to older products.

The company’s quarterly performance highlights the growing tension for large-cap pharma companies that build strong momentum from newer high-growth medicines, offset by the growing weight of an approaching patent cliff.¹

What were Novartis’ earnings and projections?

According to Novartis’s earnings presentation, over the full year the company recorded net sales upwards of $54.5 billion, a 8% increase at constant currencies. This was driven primarily by volume growth and continued strength across a set of priority brands.² Core operating income rose 14% at constant currencies to $21.9 billion, lifting core operating margins to 40.1%, a 210-basis-point improvement year over year.² Core earnings per share increased 17% at constant currencies to $8.98, while free cash flow reached $17.6 billion, up 8% from 2024.²

Novartis’ fourth-quarter performance saw net sales decline 1% at constant currencies to $13.3 billion, a reflection of the accelerating impact of U.S. competition and revenue deduction adjustments, particularly competition from Entresto and Promacta, directly affected sales.¹

The company’s core operating income grew just 1% in the quarter, as net income fell 15%, due to higher income taxes. Free cash flow dropped sharply year over year, driven by lower operating cash inflows in the period.

Looking ahead, management presented a more restrained outlook for 2026, as net sales are expected to grow at a low single-digit rate at constant currencies, while core operating income is projected to decline low single-digit.¹

The guidance incorporates the effects of what Novartis chief executive Vas Narasimhan describes as “the largest patent expiry in its history,” signaling that generic pressure will intensify before pipeline and recently launched products can fully compensate.¹ Novartis’ net debt also rose to $21.9 billion by the end of the year, following capital returns and acquisition-related cash outflows.²

What was Novartis’ portfolio performance amid the patent cliff?

The company’s growth in 2025 concentrated in a group of newer medicines that continued to scale rapidly. Kisqali, Kesimpta, Pluvicto, Scemblix, and Cosentyx all delivered double-digit sales growth for the year, with several posting gains well above 40%.¹ These products increasingly anchor the company’s revenue base as Novartis’ legacy brands face erosion, such as older therapies Entresto, Promacta/Revolade, and Tasigna posting sharp declines in the fourth quarter, highlighting the near-term financial drag from loss of exclusivity.¹

What drugs were approved or submitted for approval?

During 2025, Novartis advanced several key regulatory milestones during the quarter, as FDA approved Itvisma, a gene replacement therapy for a broad population of patients with spinal muscular atrophy, marking a notable expansion beyond pediatric-only treatment.¹

In Europe, the European Commission approved an expanded indication for Scemblix, allowing its use across all lines of treatment in Philadelphia chromosome–positive chronic myeloid leukemia in chronic phase.¹

On the submissions front, Novartis submitted an FDA filing for Pluvicto in PSMA-positive metastatic hormone-sensitive prostate cancer which is supported by its Phase III data. The company also submitted remibrutinib to the FDA for the symptomatic dermographism subtype of chronic inducible urticaria, with additional submissions for other subtypes planned in 2026.¹In parallel, pelabresib generated positive Phase III data in myelofibrosis, with a regulatory filing planned in Europe and further Phase III development underway in the U.S.

Sources

1. Novartis delivered high single-digit sales growth, achieved 40% core margin and further advanced the pipeline in 2025 Novartis February 4, 2026 https://www.novartis.com/news/media-releases/novartis-delivered-high-single-digit-sales-growth-achieved-40-core-margin-and-further-advanced-pipeline-2025
2. Q4 2025 Results Investor Presentation Novartis February 4, 2026 https://www.novartis.com/sites/novartis_com/files/q4-2025-investor-presentation.pdf