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Novartis Faces Profit Drop Amid Generic Drug Competition
4 Feb
Summary
- Novartis expects a low single-digit decline in 2026 operating profit.
- Patent expirations on key drugs like Entresto are impacting revenue.
- The company is relying on cancer drugs Kisqali and Scemblix for growth.
Novartis has projected a worse-than-expected decline in its 2026 operating profit, anticipating a low single-digit percentage decrease. This outlook is attributed to the increasing competition from more affordable generic alternatives to its established medications, notably the heart failure drug Entresto. The pharmaceutical giant is strategically shifting its focus towards cancer therapies such as Kisqali and Scemblix to counteract the impact of patent expiries.
These patent expirations affect blockbuster drugs including Entresto, the allergy treatment Xolair, and the autoimmune disease medication Cosentyx. Despite these headwinds, Novartis forecasts low single-digit gains in overall sales for 2026, excluding currency fluctuations. The company's CEO expressed optimism about achieving mid-term financial goals, emphasizing long-term growth prospects and the expected sales increase this year, even with generic competition.
In the fourth quarter, Novartis reported a 1% rise in adjusted operating profit, driven by strong sales from Kisqali, Kesimpta, and Cosentyx. The adjusted operating profit reached $4.92 billion, aligning with analyst expectations. This performance highlights the company's resilience and its strategic pivot towards newer, high-growth areas within its drug portfolio.
