Novartis Returns to Growth as Growth Drivers Accelerate, Pipeline Readouts Loom

Novartis' Q2 2026 results marked a turning point: after the Entresto patent expiry, the company returned to sales growth. “The business grew 1% in constant currencies in USD, we had flat core operating income at $5.9 billion.” — 2026-07-21 More telling, Net sales were helped by priority brands that grew 36% in constant currencies—KISQALI up 43%, Kesimpta up 32%, PLUVICTO up 43%, LEQVIO up 59%, and Scemblix up 89%. This broad-based acceleration suggests the portfolio is successfully transitioning beyond the Entresto cliff.

A Data-Rich Second Half

Management framed H2 as a catalyst-heavy period. “We're on track for a busy second half. We already had four readouts in the first half. In the second half, we expect with pelacarsen, remibrutinib, and del-desiran readouts in the coming months, before the end of the year readouts for ianalumab, Rhapsido, and HS.” — 2026-07-21 The market is watching pelacarsen most closely; “we've powered the study for the kind of 13%-15% CVRR benefit, and certainly are hopeful to see that level or higher.” — 2026-07-21 This is a meaningful de-risking of the pipeline, but also a test of management's credibility on Growth drivers beyond the current portfolio.

We're progressing the pipeline. We presented promising launch results for our Actinium PSMA in mCRPC. This medicine is now being studied in the post-Pluvicto setting, in the post-chemo setting, and as well in the first-line mCRPC setting in combination with ARPI.

The company also addressed recent competitive threats, including the potential for generic RLTs. “We do believe that given our extensive network of supply and our ability to deliver on time in full to physicians across the globe, but also across the U.S., we've mitigated impact from a generic launch, even with a lower price being brought into the market.” — 2026-07-21

One-Time Items and Margin Discipline

Mukul Mehta noted that Q2 results were flattered by one-time phasing: “one percentage point impact on top line… primarily inventory-related changes… related to the implementation of our new SAP system.” — 2026-07-21 This is an important nuance—growth was not entirely organic. Still, the company reaffirmed full-year guidance and expects H2 core operating income to grow mid-to-high single digits. As Vas Narasimhan noted,

Q2 is generally a stronger margin quarter when we look at the phasing across the whole year.

Pricing Dynamics and Competitive Pressures

Novartis is also navigating a complex pricing environment. In the current call, Vas addressed the growing importance of disability progression in MS, a key differentiator for remibrutinib. He acknowledged the challenge: “With respect to remibrutinib and MS, I think everything indicates to us that the trial is being conducted and the data that we're seeing that from an ARR standpoint, that we're on track versus what we would have expected in the data set. As you know, with disability progression, we have no way to know.” — 2026-07-21 This is a candid admission of uncertainty ahead of the readout. On pricing, the company also discussed the impact of Tariff exemptions and the broader trade environment, though it sees only limited direct exposure.

Ultimately, Novartis is at a pivotal juncture. The return to growth is encouraging, but the sustainability depends on the H2 pipeline readouts and the ability to maintain margin discipline while investing in launches. The company's focus on Cell therapy and gene therapy platforms (e.g., del-zota and del-brax) signals a long-term shift beyond small molecules, but near-term earnings are still tethered to the success of priority brands. As Vas summarized, “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