Novartis Beats on Q4 Earnings, Entresto Generics Pressure Sales

Swiss pharma giant Novartis AG NVS reported fourth-quarter core earnings per share (excluding one-time charges) of $2.03, which beat the Zacks Consensus Estimate of $1.99. The figure was also up from $1.98 reported a year ago.While earnings per share benefited from lower weighted average number of shares outstanding, core net income was down 1% to $3.9 billion.Revenues of $13.3 billion missed the Zacks Consensus Estimate of $13.7 billion. The top line was up 1% from the year-ago reported figure.On a constant currency basis, sales decreased 1%. The metric was adversely impacted by generic competition for key drugs Entresto (United States) and Promacta.Shares of Novartis have gained 42.1% over the past year compared with the industry’s growth of 19%.Image Source: Zacks Investment ResearchDetailed Performance of Top NVS Drugs in Q4All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.Novartis currently focuses on four core therapeutic areas — cardiovascular-renal-metabolic, immunology, neuroscience and oncology.Cosentyx’s sales (psoriasis, spondylitis and arthritis) rose 11% to $1.8 billion. Sales grew across all regions, driven by volume, with continued demand for recent launches (the hidradenitis suppurativa indication and the intravenous formulation in the United States) and steady performance in core indications.Cosentyx’s sales beat the Zacks Consensus Estimate of $1.6 billion and our model estimate of $1.7 billion.Kisqali (breast cancer) maintained its stellar performance, with sales surging 44% to $1.32 billion.  Sales increased across all regions, driven by continued share gains in metastatic breast cancer and a leading position in early breast cancer in terms of prescription growth.While strong volume growth of Kisqali in the United States was partially offset by revenue deduction adjustments, underlying growth globally was 54%.However, Kisqali sales missed both the Zacks Consensus Estimate and our model estimate of $1.5 billion.Cardiovascular drug Entresto’s sales plunged 45% year over year to $1.2 billion due to entry of generics in the United States in the third quarter of 2025.The drug is approved for heart failure globally as well as for hypertension in China and Japan.  The performance in the United States was also adversely impacted by revenue deduction adjustments. Nonetheless, ex-U.S. sales continued to grow.We note that Novartis is in litigation with a generic manufacturer to protect its Entresto IP rights. Entresto’s sales missed the Zacks Consensus Estimate of $1.5 billion and our model estimate of $1.7 billion.Kesimpta (multiple sclerosis) sales increased 27% to $1.2 billion. Sales grew across all regions, driven by increased demand and strong access.The figure marginally missed the Zacks Consensus Estimate of $1.27 billion and our model estimate of $1.26 billion.Pluvicto (prostate cancer) raked in sales of $605 million, surging 70% on strong demand growth in the United States following the approval in pre-taxane metastatic castration-resistant prostate cancer (mCRPC) indication in the first quarter of 2025. Access outside the United States also expanded with pre-taxane setting approved in Japan and China in the fourth quarter of 2025 and broader availability in post-taxane mCRPC.Sales, however, missed the Zacks Consensus Estimate of $610 million and our estimate of $667 million.Jakavi (oncology) sales were up 8% to $555 million.Sales of Tafinlar + Mekinist (oncology) were down 2% to $540 million due to a decline in sales in the United States from competitive pressure.Promacta (oncology) sales plummeted 63% to $226 million following generic entry in the United States in the second quarter of 2025 and in other countries in the third quarter. The performance in the United States was also adversely impacted by revenue deduction adjustments.Ilaris sales amounted to $514 million, representing 22% year-over-year growth, supported by broad-based regional growth led by the United States, Europe and Japan. Strong performance in the Periodic Fever Syndromes and Still’s disease indications contributed to this growth.Xolair (asthma and allergies) sales declined 8% to $384 million. The decline was mainly in Europe due to the launch of a biosimilar in the third quarter of 2025.Novartis has a collaboration agreement with Roche RHHBY for Xolair. Novartis and Roche co-promote Xolair in the United States.Tasigna (leukemia) sales plummeted 58% to $179 million due to generic competition.Scemblix sales skyrocketed 87% to $391 million, driven by continued growth in the chronic myeloid leukemia indication and strong momentum from the recently launched early-line indication in the United States and Japan. Sales, however, missed the Zacks Consensus Estimate of $439 million and our estimate of $415 million.Gene-therapy Zolgensma (spinal muscular atrophy or SMA) sales of $307 million were up 12%, driven by strong demand for the IV formulation in the incident SMA population.Itvisma, the intrathecal formulation, was recently approved in the United States.Cholesterol drug Leqvio sales soared 46% to $335 million, driven by steady demand growth and continued focus on expanding accounts and patient adoption. The figure, however, marginally missed the Zacks Consensus Estimate of $341 million and our estimate of $336 million.Luthathera (cancer) sales totaled $203 million, up 5%. Sales grew mainly in the United States, Europe and Japan due to increased demand and earlier line adoption.Sales of Lucentis nosedived 40% to $133 million due to generic competition.Fabhalta generated sales of $155 million, driven by continued launch execution across all markets in paroxysmal nocturnal hemoglobinuria and the launch progress in primary IgA nephropathy and C3 glomerulopathy indications.Core operating income improved 1% to $4.9 billion as benefits of higher government grant income and lower SG&A expenses were partly offset by higher R&D expenses.NVS’ 2025 ResultsSales in 2025 grew 8% (on a constant currency basis) to $54.53 billion, which surpassed the Zacks Consensus Estimate of $54.5 billion.Core EPS of $8.98 increased 17% (on a constant currency basis) and beat the Zacks Consensus Estimate of $8.84.Novartis 2026 GuidanceNet sales are expected to grow in low single digits on a constant currency basis. Core operating income is anticipated to decline in low single-digits.Pipeline and Other Updates From NVSThe European Commission approved an expanded indication for Scemblix, which is now approved for adult patients with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase (Ph+ CML-CP) in all lines of treatment.Novartis had earlier announced that it will acquire San Diego-based Avidity Biosciences, Inc. RNA for $12 billion to strengthen its late-stage neuroscience pipeline.The proposed acquisition will bolster neuroscience franchise for Novartis with three late-stage programs in myotonic dystrophy type 1 (DM1), a rare progressive neuromuscular disorder with a poor prognosis, facioscapulohumeral muscular dystrophy (FSHD), a rare hereditary disorder causing relentless loss of muscle function and progressive disability; and Duchenne muscular dystrophy (DMD), a severe, early-onset disease marked by progressive muscle damage and reduced life expectancy.As part of the agreement, Avidity will separate its early-stage precision cardiology programs into a new company prior to the closing of the acquisition.The companies expect the merger to be closed in the first half of 2026.On Dec. 19, 2025, Novartis entered into an agreement with the U.S. government to reduce prices for innovative drugs while supporting continued investment in manufacturing and R&D in the country. The impact of this agreement is incorporated into the company’s 2026 outlook and its 2025-2030 sales CAGR outlook of 5-6%, with longer-term implications to be assessed as implementation progresses.Our Take on NVS’ Q4 PerformanceNovartis’ performance in the fourth quarter was affected by generic competition for its blockbuster drug Entresto in the United States. Generic competition for Promacta also pulled down the top line.Novartis AG Price, Consensus and EPS Surprise Novartis AG price-consensus-eps-surprise-chart | Novartis AG Quote2026 is a pivotal year for Novartis as it navigates the largest patent expiry in its history.Novartis is now banking on key growth drivers — Kisqali, Kesimpta, Pluvicto and Scemblix — to support top-line growth.Pipeline progress remains a major upside, with multiple potential multi-blockbusters advancing through FDA approvals and positive phase III data across Rhapsido, Pluvicto, Itvisma and ianalumab.NVS is also focusing on strategic acquisitions to strengthen its pipeline.The proposed RNA acquisition will strengthen its neuroscience franchise with three late-stage programs that address genetic neuromuscular diseases.NVS’ Zacks Rank and Stock to ConsiderNovartis currently carries a Zacks Rank #3 (Hold). A better-ranked large pharma company is Bayer BAYRY, which currently has a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of Bayer have skyrocketed 138.1% in the past year. Estimates for BAYRY’s 2026 earnings per share have increased from $1.38 to $1.51 over the past 60 days. Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novartis AG (NVS): Free Stock Analysis Report Roche Holding AG (RHHBY): Free Stock Analysis Report Bayer Aktiengesellschaft (BAYRY): Free Stock Analysis Report Avidity Biosciences, Inc. (RNA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks