Novartis reported a return to sales growth in the second quarter of 2026, driven by strong performance from key medicines and recent product launches that helped offset the impact of significant patent expirations. The Swiss pharmaceutical company continues to contend with what executives describe as the largest patent cliff in its history.
Last year, several of Novartis's top-selling drugs, including the heart medication Entresto, platelet booster Promacta, and leukemia treatment Tasigna, went off-patent. The entry of lower-cost generic competitors for these products has contributed to a decline in sales and exerted pressure on the company’s profit margins.
Despite these challenges, Novartis achieved second-quarter net sales of $14.41 billion, representing a 1% increase when adjusted for currency fluctuations and surpassing analysts’ expectations, who had projected sales of approximately $13.96 billion. The company reiterated its forecast for low single-digit percentage core operating profit decline for the full year, reflecting the ongoing effects of patent expirations.
To mitigate the revenue shortfall, Novartis has pursued an acquisition-led growth strategy, highlighted by its $12 billion purchase of neuromuscular drug developer Avidity Biosciences—the largest deal in over a decade for the company—along with several smaller acquisitions. Chief Executive Vas Narasimhan emphasized a continued focus on expanding the pipeline through primarily smaller transactions, while remaining open to larger deals.
Novartis is anticipating pivotal trial results in the coming months for an experimental drug from Avidity as well as several other potential new therapies, which it hopes will contribute to medium- and long-term sales growth.
The company also benefited from increased sales of cancer treatments Kisqali and Pluvicto, as well as the multiple sclerosis therapy Kesimpta, which partially offset declines from off-patent drugs. Core operating profit for the quarter held steady at $5.94 billion, exceeding consensus estimates of $5.31 billion, while net profit decreased to $3.26 billion from $4.04 billion in the same period last year.
Following the earnings announcement, Novartis shares rose approximately 2% in European trading. The company maintains its outlook for low single-digit percentage sales growth by the end of 2026, signaling cautious optimism amid ongoing market pressures.