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NVS' Q3 Earnings Top Estimates on Strong Key Drug Sales, Revenues Miss
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Key Takeaways
Novartis' Q3 core EPS rose 9% to $2.46, beating estimates by 9.3%, while revenues increased 4%.
Strong Kisqali, Kesimpta and Scemblix sales helped offset generic erosion.
NVS raised its core operating income view, but setbacks for del-desiran and pelacarsen weigh on its pipeline.
Swiss pharma giant Novartis AG (NVS - Free Report) reported third-quarter 2026 core earnings per share (excluding one-time charges) of $2.46, which beat the Zacks Consensus Estimate of $2.25. The figure increased 9% from $2.25 reported a year ago.
The bottom line benefited from the lower weighted average number of shares outstanding.
However, revenues of $14.52 billion missed the Zacks Consensus Estimate of $14.56 billion by 0.2%. The top line rose 4% year over year, both on a reported and constant-currency basis. Strong sales of priority brands, including Kisqali, Kesimpta, Scemblix and Leqvio, helped offset generic competition.
Core operating income increased 11% to $6.04 billion.
Core net income was up 8% to $4.6 billion, driven by higher core operating income, partly offset by higher interest expense.
The stock is up in pre-market trading.
Shares of Novartis have gained 13.8% year to date compared with the industry’s growth of 19.4%.
Image Source: Zacks Investment Research
Detailed Performance of Top NVS Drugs in Q3
All 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) increased 9% to $1.86 billion, driven by growth in hidradenitis suppurativa and spondyloarthritis indications. Sales beat the Zacks Consensus Estimate of $1.78 billion and our model estimate of $1.82 billion.
Kisqali (breast cancer) maintained strong momentum, with sales surging 37% to $1.82 billion. Growth was driven by increasing market share in early breast cancer and continued leadership in metastatic breast cancer. Sales missed the Zacks Consensus Estimate of $1.85 billion and our model estimate of $1.87 billion.
Kesimpta (multiple sclerosis) sales rose 22% to $1.484 billion, reflecting increased demand and broad access globally. Sales beat the Zacks Consensus Estimate of $1.48 billion and our model estimate of $1.47 billion.
Cardiovascular drug Entresto’s sales plunged 38% to $1.17 billion due to generic competition. Nonetheless, sales surpassed the Zacks Consensus Estimate of $1.14 billion and our model estimate of $1.08 billion.
Pluvicto (prostate cancer) generated sales of $674 million, up 20%, driven by strong demand in the metastatic castration-resistant prostate cancer setting. Sales missed the Zacks Consensus Estimate of $693 million and our estimate of $695 million.
Scemblix sales surged 67% to $593 million, driven by broad-based growth across all regions and continued momentum in the early-line setting in chronic myeloid leukemia in the United States, Japan and Germany.
Jakavi (oncology) sales increased 5% to $564 million, while Tafinlar + Mekinist (oncology) sales rose 4% to $570 million. Ilaris sales increased 26% to $591 million.
Cholesterol drug Leqvio generated sales of $506 million, up 63%, driven by growth across all regions and continued uptake in China following reimbursement inclusion. Sales missed the Zacks Consensus Estimate of $511 million and our model estimate of $531.3 million.
Novartis holds global rights to develop, make, and market Leqvio through a deal with Alnylam Pharmaceuticals.
Fabhalta sales climbed 60% to $237 million, reflecting expansion in paroxysmal nocturnal hemoglobinuria and renal indications. Rhapsido (chronic spontaneous urticaria or CSU) generated $101 million, supported by strong launch uptake in the United States.
Zolgensma (spinal muscular atrophy) Group sales rose 35% to $404 million, benefiting from continued launch momentum for Itvisma (intrathecal formulation).
Conversely, Xolair (asthma and allergies) sales declined 25% to $331 million, while Promacta/Revolade sales plunged 61% to $142 million.
Novartis has a collaboration agreement with Roche (RHHBY - Free Report) for Xolair. Novartis and Roche co-promote Xolair in the United States.
Lutathera sales grew 3% year over year to $219 million, driven by strong demand in the United States and Europe. The drug maintained its leadership in the second-line setting and further strengthened its market share in the first-line setting in the United States.
Novartis is involved in patent litigation with two manufacturers whose FDA applications referencing Lutathera have received final approval in the United States. The company has appealed an unfavorable district court ruling on the validity of its patents covering Lutathera, set to expire in 2039, including pediatric exclusivity.
Novartis Raises Operating Income Guidance
Novartis raised its full-year 2026 core operating income guidance, now expecting performance to range from flat to low-single-digit growth at constant currencies, compared with its earlier projection of a low-single-digit decline.
The company maintained its net sales outlook, expecting low-single-digit growth at constant currencies. Strong priority-brand performance and productivity initiatives supported the improved earnings outlook despite generic erosion.
NVS Advances Pipeline With Regulatory Milestones
Earlier this month, the FDA approved Rhapsido for the first treatment for adults with symptomatic dermographism inadequately controlled by H1 antihistamines, expanding its use beyond CSU into chronic inducible urticaria.
Novartis reported positive phase III REMODEL-1 and REMODEL-2 results for remibrutinib in relapsing multiple sclerosis. The treatment significantly reduced annualized relapse rates compared with teriflunomide.
However, Novartis discontinued the late-stage study of remibrutinib in generalized myasthenia gravis following a futility analysis, which indicated the treatment was unlikely to meet its efficacy objectives.
Pluvicto received approvals in the United States and China for an additional prostate cancer setting.
The FDA also granted priority review to del-zota for Duchenne muscular dystrophy amenable to exon 44 skipping.
Novartis completed the EU regulatory submission for pelabresib for the treatment of myelofibrosis, supported by positive results from the phase III MANIFEST-2 study. The trial demonstrated deep and durable disease control, with a safety profile comparable to ruxolitinib alone. The pelabresib treatment arm also recorded fewer deaths and cases of disease progression in numerical terms.
However, del-desiran failed to meet the primary endpoint in the phase III HARBOR study in myotonic dystrophy type 1.
The late-stage HORIZON study of pelacarsen failed to meet its primary endpoint. Novartis licensed the candidate from Ionis Pharmaceuticals (IONS - Free Report) . The study did not show a statistically significant reduction in major cardiovascular events compared with placebo.
Ionis Pharmaceuticals discovered pelacarsen and led its early development. In February 2019, Novartis exercised its option to license the rights to develop and commercialize pelacarsen as a targeted cardiovascular therapy.
Our Take on Novartis' Q3 Performance
Novartis delivered solid third-quarter results, with strong growth across its priority brands helping offset generic competition. The earnings beat and upgraded core operating income guidance highlight the contribution from newer medicines and ongoing productivity efforts.
The company also strengthened its pipeline through the acquisition of Myricx Bio, adding antibody-drug conjugate programs targeting B7-H3 and HER2.
In October, Novartis entered into a strategic licensing and option agreement with Abogen Biosciences to advance RNA-encoded therapeutics. Under the agreement, Novartis secured an exclusive worldwide license to ABO2203, a novel mRNA-encoded CD19xCD3 T-cell engager with the potential to transform the treatment of autoimmune diseases.
However, disappointing late-stage results for del-desiran and pelacarsaen remain setbacks.
Sustaining growth across key brands while navigating generic erosion remains central to Novartis' near-term performance.
View the Zacks #1 Rank List
Image: Bigstock
NVS' Q3 Earnings Top Estimates on Strong Key Drug Sales, Revenues Miss
Key Takeaways
Swiss pharma giant Novartis AG (NVS - Free Report) reported third-quarter 2026 core earnings per share (excluding one-time charges) of $2.46, which beat the Zacks Consensus Estimate of $2.25. The figure increased 9% from $2.25 reported a year ago.
The bottom line benefited from the lower weighted average number of shares outstanding.
However, revenues of $14.52 billion missed the Zacks Consensus Estimate of $14.56 billion by 0.2%. The top line rose 4% year over year, both on a reported and constant-currency basis. Strong sales of priority brands, including Kisqali, Kesimpta, Scemblix and Leqvio, helped offset generic competition.
Core operating income increased 11% to $6.04 billion.
Core net income was up 8% to $4.6 billion, driven by higher core operating income, partly offset by higher interest expense.
The stock is up in pre-market trading.
Shares of Novartis have gained 13.8% year to date compared with the industry’s growth of 19.4%.
Image Source: Zacks Investment Research
Detailed Performance of Top NVS Drugs in Q3
All 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) increased 9% to $1.86 billion, driven by growth in hidradenitis suppurativa and spondyloarthritis indications. Sales beat the Zacks Consensus Estimate of $1.78 billion and our model estimate of $1.82 billion.
Kisqali (breast cancer) maintained strong momentum, with sales surging 37% to $1.82 billion. Growth was driven by increasing market share in early breast cancer and continued leadership in metastatic breast cancer. Sales missed the Zacks Consensus Estimate of $1.85 billion and our model estimate of $1.87 billion.
Kesimpta (multiple sclerosis) sales rose 22% to $1.484 billion, reflecting increased demand and broad access globally. Sales beat the Zacks Consensus Estimate of $1.48 billion and our model estimate of $1.47 billion.
Cardiovascular drug Entresto’s sales plunged 38% to $1.17 billion due to generic competition. Nonetheless, sales surpassed the Zacks Consensus Estimate of $1.14 billion and our model estimate of $1.08 billion.
Pluvicto (prostate cancer) generated sales of $674 million, up 20%, driven by strong demand in the metastatic castration-resistant prostate cancer setting. Sales missed the Zacks Consensus Estimate of $693 million and our estimate of $695 million.
Scemblix sales surged 67% to $593 million, driven by broad-based growth across all regions and continued momentum in the early-line setting in chronic myeloid leukemia in the United States, Japan and Germany.
Jakavi (oncology) sales increased 5% to $564 million, while Tafinlar + Mekinist (oncology) sales rose 4% to $570 million. Ilaris sales increased 26% to $591 million.
Cholesterol drug Leqvio generated sales of $506 million, up 63%, driven by growth across all regions and continued uptake in China following reimbursement inclusion. Sales missed the Zacks Consensus Estimate of $511 million and our model estimate of $531.3 million.
Novartis holds global rights to develop, make, and market Leqvio through a deal with Alnylam Pharmaceuticals.
Fabhalta sales climbed 60% to $237 million, reflecting expansion in paroxysmal nocturnal hemoglobinuria and renal indications. Rhapsido (chronic spontaneous urticaria or CSU) generated $101 million, supported by strong launch uptake in the United States.
Zolgensma (spinal muscular atrophy) Group sales rose 35% to $404 million, benefiting from continued launch momentum for Itvisma (intrathecal formulation).
Conversely, Xolair (asthma and allergies) sales declined 25% to $331 million, while Promacta/Revolade sales plunged 61% to $142 million.
Novartis has a collaboration agreement with Roche (RHHBY - Free Report) for Xolair. Novartis and Roche co-promote Xolair in the United States.
Lutathera sales grew 3% year over year to $219 million, driven by strong demand in the United States and Europe. The drug maintained its leadership in the second-line setting and further strengthened its market share in the first-line setting in the United States.
Novartis is involved in patent litigation with two manufacturers whose FDA applications referencing Lutathera have received final approval in the United States. The company has appealed an unfavorable district court ruling on the validity of its patents covering Lutathera, set to expire in 2039, including pediatric exclusivity.
Novartis Raises Operating Income Guidance
Novartis raised its full-year 2026 core operating income guidance, now expecting performance to range from flat to low-single-digit growth at constant currencies, compared with its earlier projection of a low-single-digit decline.
The company maintained its net sales outlook, expecting low-single-digit growth at constant currencies. Strong priority-brand performance and productivity initiatives supported the improved earnings outlook despite generic erosion.
NVS Advances Pipeline With Regulatory Milestones
Earlier this month, the FDA approved Rhapsido for the first treatment for adults with symptomatic dermographism inadequately controlled by H1 antihistamines, expanding its use beyond CSU into chronic inducible urticaria.
Novartis reported positive phase III REMODEL-1 and REMODEL-2 results for remibrutinib in relapsing multiple sclerosis. The treatment significantly reduced annualized relapse rates compared with teriflunomide.
However, Novartis discontinued the late-stage study of remibrutinib in generalized myasthenia gravis following a futility analysis, which indicated the treatment was unlikely to meet its efficacy objectives.
Pluvicto received approvals in the United States and China for an additional prostate cancer setting.
The FDA also granted priority review to del-zota for Duchenne muscular dystrophy amenable to exon 44 skipping.
Novartis completed the EU regulatory submission for pelabresib for the treatment of myelofibrosis, supported by positive results from the phase III MANIFEST-2 study. The trial demonstrated deep and durable disease control, with a safety profile comparable to ruxolitinib alone. The pelabresib treatment arm also recorded fewer deaths and cases of disease progression in numerical terms.
However, del-desiran failed to meet the primary endpoint in the phase III HARBOR study in myotonic dystrophy type 1.
The late-stage HORIZON study of pelacarsen failed to meet its primary endpoint. Novartis licensed the candidate from Ionis Pharmaceuticals (IONS - Free Report) . The study did not show a statistically significant reduction in major cardiovascular events compared with placebo.
Ionis Pharmaceuticals discovered pelacarsen and led its early development. In February 2019, Novartis exercised its option to license the rights to develop and commercialize pelacarsen as a targeted cardiovascular therapy.
Our Take on Novartis' Q3 Performance
Novartis delivered solid third-quarter results, with strong growth across its priority brands helping offset generic competition. The earnings beat and upgraded core operating income guidance highlight the contribution from newer medicines and ongoing productivity efforts.
The company also strengthened its pipeline through the acquisition of Myricx Bio, adding antibody-drug conjugate programs targeting B7-H3 and HER2.
In October, Novartis entered into a strategic licensing and option agreement with Abogen Biosciences to advance RNA-encoded therapeutics. Under the agreement, Novartis secured an exclusive worldwide license to ABO2203, a novel mRNA-encoded CD19xCD3 T-cell engager with the potential to transform the treatment of autoimmune diseases.
However, disappointing late-stage results for del-desiran and pelacarsaen remain setbacks.
Sustaining growth across key brands while navigating generic erosion remains central to Novartis' near-term performance.
NVS’ Zacks Rank
Novartis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.