Novartis Returns to Growth: Strong Drivers, Busy H2 Pipeline

Q2 2026 sees 1% CC sales growth, growth drivers up 36% CC, as Novartis reaffirms guidance and primes multiple near-term catalysts.

NOVN.SW · Earnings Call · 2026-07-21

Back to Growth

After a challenging first quarter burdened by Entresto generic erosion, Novartis swung back to positive territory in Q2 2026. “The business grew 1% in constant currencies in USD, we had flat core operating income at $5.9 billion.” — 2026-07-21 Crucially, the company's growth engines are accelerating: priority brands grew 36% CC, with KISQALI up 43%, PLUVICTO up 43%, LEQVIO up 59%, and Scemblix up an impressive 89%. This momentum allowed management to reiterate full-year guidance, which now points to low single-digit sales growth and a low single-digit decline in core operating income. As Vas Narasimhan noted, “Our growth drivers continued a strong trajectory in quarter two. They were up 36% in constant currencies.” — 2026-07-21

Launch Readiness and Commercial Execution

The call underscored commercial readiness as a central theme, with several products at pivotal inflection points. Rhapsido (remibrutinib) is ramping in chronic spontaneous urticaria with over 4,000 prescribers, and the company is managing a disciplined access strategy across PBMs—a clear illustration of balancing customer success with long-term pricing power. Similarly, ianalumab is on track for a Q3 FDA approval in Sjögren's, and management highlighted its approval process is proceeding without an advisory committee. The updated KISQALI data—six-year OS benefit in early breast cancer—solidifies its $10B peak sales ambition, while PLUVICTO's expected HSPC approval later this year expands the eligible pool by 75%. These are not speculative pipelines; they are near-term commercial launches.

Pipeline Catalysts and Regulatory Progress

The second half of 2026 is packed with high-stakes readouts. Pelacarsen, the Lp(a) inhibitor, is expected to report HORIZON trial results—management confirmed it is powered for a 13-15% MACE reduction. Remibrutinib's two phase III MS studies are also on track, and del-brax (FSHD) is advancing with potential for accelerated filing.

In closing, we delivered our first half performance at the upper end of guidance, with Q2 returning to sales growth. We remain on track to deliver our full-year guidance.
2026-07-21

This confidence is supported by a strong earnings growth trajectory across the portfolio and a disciplined capital allocation that has already returned $9.1B in dividends and $2.1B in buybacks year-to-date.

Financial Discipline and Outlook

Financial discipline remains a priority. Core operating margin was 41.2% in Q2, with productivity gains offsetting Avidity-related dilution. The company reaffirmed its shareholder-friendly framework, and while gross margin will see pressure from portfolio mix, SG&A efficiency is expected to compensate. Management's guidance embeds a low-single-digit sales growth and low-single-digit decline in core operating income, with H2 core operating income growth of mid-to-high single digits. As the pipeline matures, the company is well-positioned to deliver on its mid-term growth ambitions. The prior quarter's commentary on remibrutinib's profile remains consistent: “We're very confident in overall remi's safety and assuming 2 positive Phase III trials this summer, the potential for this to be a very significant medicine.” — Vasant Narasimhan, Chief Executive Officer · 2026-02-04 And for ianalumab, the focus is on patient-centric outcomes: “I think important for these patients as well is to feel like they don't need the same level of steroids that they typically are using.” — Vasant Narasimhan, Chief Executive Officer · 2025-10-28 This is a company executing on its plan, with a busy second half that could define its next phase of growth.