Novartis is crossing its biggest patent chasm in decades—its rerating hinges on whether Kisqali, Pluvicto, Kesimpta and Leqvio can outgrow Entresto’s collapse.
Overview
Novartis has reached a major inflection point, completing its transition from a diversified healthcare group into a streamlined innovative-medicines company after divesting Alcon and spinning off Sandoz. The strategy concentrates capital and R&D on five technology platforms and four therapeutic pillars aimed at high unmet need and pricing power. Financially, FY2025 net sales were $54.5B (+8% YoY), but Q1 2026 was the first quarter to fully reflect the company’s largest patent cliff (Entresto, Tasigna, Promacta), with net sales down 1% (5% cc) to $13.11B even as new launches added +13 pts and generics created a -14 pt headwind. The US remains the profit engine (~43% of FY2025 sales), Europe contributes ~31%, and emerging markets (~26%)—especially China—represent key volume upside, highlighted by Leqvio’s NRDL-driven acceleration. The investment debate centers on whether fast-growing, clinically differentiated priority brands (Kisqali, Pluvicto, Kesimpta, Scemblix, Leqvio) and the Avidity acquisition can bridge the 2026–2027 revenue gap and restore margin trajectory toward ~40% while navigating intensifying competition and US pricing pressure.