Novartis Earnings Hit by Generic Competition — Update

By Adam Whittaker and Dominic Chopping

Novartis reported a drop in earnings as generic competition for its top-selling heart drug Entresto hit sales in the first months of the year.

The drug made up around 14% of total group sales last year but has faced pressure as generic versions of the drug hit the market after the expiry of its U.S. patent. Sales of the drug fell 42% in the first quarter to $1.31 billion, ahead of further patent expirations in Europe later this year.

With increasing competition from generics also hitting its cancer drug Tasigna and blood-clotting medicine Promacta, the Swiss drugmaker has turned to dealmaking to fill its pipeline and offset patent expirations.

It recently agreed to buy Excellergy for up to $2 billion to bulk up its immunology portfolio and has agreed to buy a breast-cancer drug candidate from Synnovation Therapeutics for up to $3 billion.

Earlier this year, it completed the $12 billion acquisition of neuromuscular drug developer Avidity Biosciences after several smaller transactions in areas including cardiovascular and renal diseases.

Novartis Chief Executive Vas Narasimhan said that despite U.S. generics hitting its results, the continued development of the company's drugs pipeline and the recent acquisitions are providing momentum.

"We remain on track to deliver our full-year guidance and look forward to multiple readouts in the second half that could raise our mid- to long-term growth outlook," he said.

The company expects sales this year to grow by a low-single-digit percentage, while core operating income--one of its preferred earnings metrics, which strips out exceptional items--is expected to decline by a low-single-digit.

In November, the drugmaker rolled forward its midterm sales target to the 2025-30 period, projecting its top line will grow at an annual pace of 5% to 6% when excluding currency movements.

Its first-quarter core operating profit fell by 14% on year to $4.9 billion when measured in constant currencies, as sales fell 5% to $13.11 billion.

Analysts polled by Visible Alpha had forecast core operating profit of $5.1 billion on sales of $13.34 billion.

Write to Adam Whittaker at adam.whittaker@wsj.com and Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 28, 2026 05:05 ET (09:05 GMT)