Novartis Raises FY Core Operating Income Guidance as Q3 Sales Rise 4%

Novartis reported third-quarter 2026 net sales of USD 14,522 million, up 4% in both US dollar and constant-currency terms from USD 13,909 million in the prior-year period, and raised its full-year core operating income guidance, according to the company’s Q3 2026 media release dated October 27, 2026.

Core operating income rose 11% in USD and 10% in constant currencies to USD 6,036 million, and the core operating income margin reached 41.6% of net sales, an increase of 2.3 percentage points, or 2.0 percentage points in constant currencies. Novartis now expects full-year 2026 core operating income to be in line to grow low single-digit, revised from its previous expectation of a low single-digit decline, while its net sales guidance of low single-digit growth was left unchanged. The guidance is stated barring unforeseen events and is measured against the prior year in constant currencies. The company said that if late-October exchange rates prevail for the remainder of 2026, the foreign exchange impact for the year would be positive 1 percentage point on net sales and positive 1 percentage point on core operating income.

Volume growth contributed 14 percentage points to third-quarter sales, partly offset by 9 percentage points from generic competition. Pricing had a negative impact of 1 percentage point, and currency had no impact.

“Novartis delivered solid sales growth in Q3, as priority brands and launches more than offset generic erosion, demonstrating the replacement power of the business,” Chief Executive Vas Narasimhan said, adding that productivity efforts drove bottom-line performance and allowed the company to upgrade its full-year guidance.

Reported operating income fell 59% in USD, or 61% in constant currencies, to USD 1,843 million, a decline Novartis attributed mainly to higher research and development expenses, including a USD 1.9 billion partial impairment charge on the del-desiran IPR&D asset, and higher other expense, partly offset by higher net sales. Net income declined 70% to USD 1,196 million and earnings per share fell 69% to USD 0.63. Free cash flow was USD 5,111 million, down 18%, on lower net cash flows from operating activities. Core net income rose 8% to USD 4,655 million and core EPS increased 9% to USD 2.46, which the company said benefited from a lower weighted average number of shares outstanding.

In the Phase III HARBOR study, del-desiran did not meet its primary endpoint of video hand opening time versus placebo in patients with myotonic dystrophy type 1. Novartis said evidence of clinical activity was observed in secondary endpoints and exploratory analyses, that it is evaluating the full HARBOR dataset, and that it will engage with health authorities to determine the most appropriate development path; the data will be presented at an upcoming medical congress. “While the del-desiran readout in DM1 was not what we had hoped, we saw evidence of clinical activity in the data and are working through the development path for this medicine,” Narasimhan said.

For the first nine months of 2026, net sales were USD 42,043 million, up 2% in USD and flat in constant currencies, with volume growth of 14 percentage points partly offset by 12 percentage points from generic competition. Operating income fell 23% to USD 10,828 million and net income fell 34% to USD 7,609 million, with EPS of USD 4.01. Core operating income was USD 16,873 million, down 1% in USD and 2% in constant currencies, at a core margin of 40.1% of net sales. Core net income was USD 13,027 million, down 4%, core EPS was USD 6.85, down 1%, and free cash flow was USD 14,002 million, down 12%.

Priority Brands and Pipeline Milestones

Kisqali ranked first among key growth drivers in the quarter at USD 1,821 million, up 37% in constant currencies, with Novartis citing market share growth in early breast cancer and leadership in metastatic breast cancer. Cosentyx sales were USD 1,857 million, up 9% in constant currencies, driven by the hidradenitis suppurativa and spondyloarthritis indications. Kesimpta reached USD 1,484 million, up 22% in constant currencies; Scemblix rose 67% in constant currencies to USD 593 million; and Leqvio grew 63% in constant currencies to USD 506 million, with continued uptake in China following NRDL inclusion. Pluvicto increased 20% in constant currencies to USD 674 million; the Zolgensma Group rose 35% in constant currencies to USD 404 million, reflecting launch momentum from Itvisma; and Fabhalta grew 60% in constant currencies to USD 237 million. Rhapsido recorded USD 101 million in early launch uptake. Entresto sales fell 38% to USD 1,165 million amid generic erosion, and sales of the top 20 brands totaled USD 12,052 million, up 7%.

On the pipeline side, oral remibrutinib met its primary endpoint in the Phase III REMODEL-1 and REMODEL-2 trials in relapsing multiple sclerosis, significantly reducing annualized relapse rate versus teriflunomide with superiority on all key secondary endpoints, including MRI lesion reduction and a clinically meaningful delay in disability progression, Novartis said; the data were presented at the MSToronto2026 congress in October. Separately, the company discontinued the Phase III study of remibrutinib in generalized myasthenia gravis following a futility analysis, which indicated the treatment was unlikely to meet its efficacy objectives; Novartis said no safety concerns were identified and there is no impact on remibrutinib studies in other indications.

Regulatory milestones in the quarter included the October FDA approval of Rhapsido as the first treatment for adults with symptomatic dermographism inadequately controlled by H1 antihistamines, expanding its use beyond chronic spontaneous urticaria into chronic inducible urticaria. The FDA and China’s NMPA approved Pluvicto in combination with an androgen receptor pathway inhibitor for patients with PSMA-positive metastatic androgen pathway modulation-naive or sensitive prostate cancer, and Novartis said Pluvicto is now approved across all stages of PSMA-positive metastatic prostate cancer. Japan’s MHLW approved Fabhalta for IgA nephropathy, making it the first approved treatment for that indication in Japan, and the FDA granted Fabhalta traditional approval in the same indication. The FDA granted del-zota priority review for people with Duchenne muscular dystrophy whose genetic variant may be amenable to exon 44 skipping, the EU regulatory submission for pelabresib in myelofibrosis was completed, and the CHMP adopted a positive opinion recommending approval of Cosentyx in polymyalgia rheumatica.

Novartis also reported that the Phase III HORIZON trial of pelacarsen did not meet its primary endpoint of reducing the risk of cardiovascular events versus placebo in patients with elevated Lp(a) and established cardiovascular disease, despite reducing Lp(a) levels in the study population. A six-year follow-up analysis of the Phase III NATALEE trial showed Kisqali plus endocrine therapy reduced the risk of death by nearly 20% versus endocrine therapy alone in the broadest HR+/HER2- early breast cancer population at high risk of recurrence, with the data presented at ESMO 2026.

Buybacks, Net Debt and Transactions

During the first nine months of 2026, Novartis repurchased 30.9 million shares for USD 4.7 billion on the SIX Swiss Exchange second trading line, including 18.8 million shares for USD 2.8 billion under the up-to USD 10 billion share buyback announced in July 2025, with up to USD 4.9 billion still to be executed. A further 12.1 million shares were repurchased for USD 1.8 billion to mitigate anticipated full-year dilution from employee participation plans, and 2.0 million shares were repurchased from employees for USD 0.3 billion. The total number of shares outstanding decreased by 19.6 million compared with December 31, 2025.

Net debt increased to USD 37.4 billion at September 30, 2026, from USD 21.9 billion at December 31, 2025, as free cash flow of USD 14.0 billion was more than offset by USD 16.7 billion of net cash outflows for M&A, intangible asset transactions and other acquisitions, the USD 9.1 billion annual dividend payment and USD 4.8 billion of cash outflows for treasury share transactions. The company’s long-term credit ratings stand at Aa3 with Moody’s (MCO ) Ratings and AA- with S&P Global Ratings.

Novartis completed the acquisition of Myricx Bio, adding a class of antibody-drug conjugates including two lead assets targeting B7-H3 and HER2; exercised its exclusive option to acquire full global rights to Sironax’s Brain Delivery Module platform, a blood-brain barrier crossing technology; and entered an exclusive global licensing agreement with BoomRay Pharmaceuticals for an undisclosed preclinical radioligand therapy asset. In October, Novartis entered a strategic licensing and option agreement with Abogen Biosciences to advance RNA-encoded therapeutics, including an exclusive worldwide license to ABO2203, an mRNA-encoded CD19xCD3 T-cell engager; the transaction is subject to the completion of customary closing conditions.

The Board of Directors nominated Rajesh Jha for election at the 2027 Annual General Meeting. During a 36-year career at Microsoft, Jha held senior leadership roles across software engineering, productivity platforms and enterprise technologies and served on Microsoft’s Senior Leadership Team from 2016 until his retirement, most recently as Executive Vice President, Experiences + Devices.

Novartis scheduled its Meet Novartis Management 2026 event for November 18-19, 2026 in London, its fourth-quarter and full-year 2026 results for February 3, 2027, and its Annual General Meeting for March 5, 2027.