Novartis AG (SIX:NOVN) said on Wednesday that it expects low single-digit sales growth for 2026 and a similar reduction in core operating income, reflecting the impact of the company's largest-ever patent expiry and intensifying generic rivalry.
For the full year 2025 the Basel-based pharmaceutical group reported net sales of $54.53 billion, an 8% increase in constant currencies from $50.32 billion a year earlier. Core operating income rose 14% in constant currencies to $21.89 billion, widening the core operating margin to 40.1% from 38.7%.
Chief executive Vas Narasimhan commented on the outlook and the impending patent challenge, stating: "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."
On a quarterly basis, fourth-quarter net sales increased 1% to $13.34 billion but fell 1% in constant currencies. The company attributed the constant-currency decline to generic erosion and revenue deduction adjustments in the U.S. Fourth-quarter core operating income reached $4.93 billion, a 1% increase in both reported and constant-currency terms.
Novartis highlighted five priority brands as central to its growth strategy. Annual sales for those products in 2025 were:
- Kisqali - $4.78 billion, up 57% in constant currencies; fourth-quarter sales were $1.32 billion.
- Kesimpta - $4.43 billion, up 36%.
- Pluvicto - $1.99 billion, up 42%.
- Scemblix - $1.29 billion, up 85%.
- Cosentyx - $6.67 billion, up 8%.
At the same time, older products faced steep generic-driven declines. The heart failure medicine Entresto saw fourth-quarter sales fall 45% in constant currencies to $1.25 billion and ended the year down 2% to $7.75 billion. The blood disorder treatment Promacta dropped 63% in the fourth quarter to $226 million and fell 27% for the year to $1.64 billion.
Regulatory progress during the quarter included U.S. Food and Drug Administration approval of the gene therapy Itvisma for spinal muscular atrophy and FDA acceptance of a submission for Pluvicto in metastatic hormone-sensitive prostate cancer. The European Commission approved Scemblix for chronic myeloid leukemia patients across all treatment lines.
On the profitability front, full-year net income rose 17% to $13.97 billion from $11.94 billion. Core earnings per share increased 17% in constant currencies to $8.98 from $7.81. Free cash flow grew 8% to $17.60 billion.
During 2025 the company repurchased 77.60 million shares for $8.90 billion. Net debt climbed to $21.90 billion from $16.10 billion at the end of 2024, with the increase driven by share buybacks, dividend payments totaling $7.80 billion and $5.20 billion of merger and acquisition activity.
The board has proposed a dividend of 3.70 Swiss francs per share, up 5.7% from 3.50 francs. Novartis said its December agreement with the U.S. government to lower drug prices is reflected in its 2026 guidance and in its five-year compound annual growth rate target of 5% to 6% for 2025-2030.
Separately, the company highlighted a research and market-analysis service that evaluates equities using artificial intelligence and multiple financial metrics, noting that the tool assesses stocks including NOVN alongside thousands of other companies, and citing prior model examples and specific return figures. The firm also noted that the same model identifies opportunities across sectors and can indicate whether NOVN appears in current strategies.
Implications
Novartis' outlook underscores the tension between strong growth from newer specialty medicines and the pressure from generics on older, high-revenue products. The company is maintaining shareholder returns through buybacks and a higher dividend while accepting a higher net debt position to support those actions and M&A activity.