On July 17, 2025 Vas Narasimhan, CEO of Novartis, reporting on Q2 2025 results, said (Press release, Novartis, JUL 17, 2025, View Source [SID1234654425]):

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"Novartis delivered another strong quarter, with double-digit sales and core operating income growth. We continue to drive strong performance on our ongoing launches for Kisqali, Pluvicto, and Scemblix, demonstrating the replacement power in our portfolio. We also delivered important pipeline milestones including a third positive Phase III readout for Pluvicto in hormone-sensitive prostate cancer and global filings for OAV101 IT in SMA. Our robust balance sheet and confidence in our mid and long-term growth enable us to initiate an up-to USD 10 billion share buyback as part of our commitment to balanced capital allocation."

Key figures

Q2 2025
Q2 2024
% change
H1 2025
H1 2024
% change

USD m
USD m
USD
cc

USD m
USD m
USD
cc
Net sales
14 054
12 512
12
11

27 287
24 341
12
13
Operating income
4 864
4 014
21
25

9 527
7 387
29
33
Net income
4 024
3 246
24
26

7 633
5 934
29
31
EPS (USD)
2.07
1.60
29
32

3.91
2.91
34
37
Free cash flow
6 333
4 615
37

9 724
6 653
46

Core operating income
5 925
4 953
20
21

11 500
9 490
21
24
Core net income
4 710
4 008
18
19

9 192
7 689
20
22
Core EPS (USD)
2.42
1.97
23
24

4.69
3.77
24
27

1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 40 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.

Strategy

Our focus

Novartis is a "pure-play" innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan.

Our priorities

1.
Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.
2.
Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility.
3.
Strengthen foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.

Financials

Second quarter

Net sales were USD 14.1 billion (+12%, +11% cc), with volume contributing 12 percentage points to growth. Generic competition had a negative impact of 2 percentage points, pricing had a positive impact of 1 percentage point, and currency had a positive impact of 1 percentage point.

Operating income was USD 4.9 billion (+21%, +25% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches and net expense from legal matters.

Net income was USD 4.0 billion (+24%, +26% cc), mainly driven by higher operating income, partly offset by higher net financial expense. EPS was USD 2.07 (+29%, +32% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 5.9 billion (+20%, +21% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches. Core operating income margin was 42.2% of net sales, increasing 2.6 percentage points (3.4 percentage points cc).

Core net income was USD 4.7 billion (+18%, +19% cc), mainly due to higher core operating income, partly offset by higher income taxes and net financial expense. Core EPS was USD 2.42 (+23%, +24% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 6.3 billion (+37% USD), compared with USD 4.6 billion in the prior-year quarter, driven by higher net cash flows from operating activities.

First half

Net sales were USD 27.3 billion (+12%, +13% cc), with volume contributing 14 percentage points to growth. Generic competition had a negative impact of 2 percentage points, pricing had a positive impact of 1 percentage point, benefiting from revenue deduction adjustments mainly in the US, and currency had a negative impact of 1 percentage point.

Operating income was USD 9.5 billion (+29%, +33% cc), mainly driven by higher net sales and contingent consideration adjustments, partly offset by higher investments behind priority brands and launches.

Net income was USD 7.6 billion (+29%, +31% cc), mainly driven by higher operating income, partly offset by higher income taxes and net financial expense. EPS was USD 3.91 (+34%, +37% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 11.5 billion (+21%, +24% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches. Core operating income margin was 42.1% of net sales, increasing 3.1 percentage points (3.7 percentage points cc).

Core net income was USD 9.2 billion (+20%, +22% cc), mainly due to higher core operating income, partly offset by higher income taxes and net financial expense. Core EPS was USD 4.69 (+24%, +27% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 9.7 billion (+46% USD), compared with USD 6.7 billion in the prior-year period, driven by higher net cash flows from operating activities.

Q2 priority brands

Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q2 growth) including:

Kisqali
(USD 1 177 million, +64% cc) sales grew strongly across all regions, including +100% growth in the US with strong momentum from the recently launched early breast cancer indication as well as continued share gains in metastatic breast cancer
Entresto
(USD 2 357 million, +22% cc) sustained robust, demand-led growth globally
Kesimpta
(USD 1 077 million, +33% cc) sales grew across all regions driven by increased demand and strong access
Scemblix
(USD 298 million, +79% cc) sales grew across all regions, demonstrating the continued high unmet need in CML and continued strong momentum from the recently launched early-line indication in the US
Leqvio
(USD 298 million, +61% cc) continued steady growth, with a focus on increasing account and patient adoption, and continuing medical education
Pluvicto
(USD 454 million, +30% cc) showed encouraging demand uptake in the US following the pre-taxane metastatic castration-resistant prostate cancer (mCRPC) approval, as well as continued access expansion ex-US in the post-taxane mCRPC setting
Cosentyx
(USD 1 629 million, +6% cc) sales grew mainly in the US and Europe, driven by recent launches as well as volume growth in core indications
Fabhalta
(USD 120 million) sales grew driven by continued launch execution across all markets in PNH as well as recent launches in IgAN and C3G in the US
Lutathera
(USD 207 million, +17% cc) sales grew mainly in the US, Europe and Japan due to increased demand and earlier-line adoption, particularly in the US and Japan
Zolgensma
(USD 297 million, -17% cc) sales declined reflecting a lower incidence of SMA compared to prior year, while demand remained robust

Net sales of the top 20 brands in the second quarter and first half

Q2 2025
% change
H1 2025
% change

USD m
USD
cc
USD m
USD
cc
Entresto
2 357
24
22
4 618
22
22
Cosentyx
1 629
7
6
3 163
11
11
Kisqali
1 177
64
64
2 133
59
60
Kesimpta
1 077
35
33
1 976
38
38
Tafinlar + Mekinist
573
10
7
1 125
13
13
Promacta/Revolade
502
-8
-9
1 048
-2
-1
Jakavi
524
11
8
1 016
7
8
Xolair
443
4
2
899
9
10
Ilaris
477
30
27
896
24
24
Pluvicto
454
32
30
825
26
26
Tasigna
327
-27
-27
704
-16
-15
Zolgensma
297
-15
-17
624
-3
-3
Sandostatin Group
303
-3
-3
620
-7
-6
Leqvio
298
64
61
555
67
66
Scemblix
298
82
79
536
79
78
Lutathera
207
18
17
400
16
16
Exforge Group
191
7
7
370
0
3
Lucentis
173
-37
-39
362
-39
-38
Diovan Group
154
-4
-4
304
1
3
Galvus Group
123
-18
-17
247
-17
-14
Top 20 brands total
11 584
16
14
22 421
16
17

R&D update – key developments from the second quarter

New approvals
Vanrafia
(atrasentan)
FDA granted accelerated approval for Vanrafia for the reduction of proteinuria in adults with primary IgA nephropathy (IgAN) at risk of rapid disease progression. Vanrafia can be seamlessly added to supportive care in IgAN and used as a foundational therapy.
Coartem
(artemether and lumefantrine)
In July, Swissmedic approved Coartem Baby, the first clinically proven malaria treatment specifically designed for newborns and infants between 2-5 kg. This milestone paves the way for registration in eight African countries through the Marketing Authorization for Global Health Products (MAGHP) procedure.

Regulatory updates
OAV101 IT (onasemnogene abeparvovec)
Regulatory submissions for OAV101 IT in patients with spinal muscular atrophy (SMA) were completed in the US and EU.

Results from ongoing trials and other highlights
Pluvicto
(lutetium Lu177 vipivotide tetraxetan)
At a prespecified interim analysis, the Phase III PSMAddition trial in PSMA+ metastatic hormone-sensitive prostate cancer (mHSPC) met its primary endpoint with a statistically significant and clinically meaningful benefit in radiographic progression-free survival (rPFS) in patients treated with Pluvicto plus standard of care (SoC) versus SoC alone. The study also showed a positive trend in overall survival in favor of the Pluvicto arm. Data will be presented at an upcoming medical meeting and, based on FDA feedback, submitted for regulatory review in H2 2025.
Cosentyx
(secukinumab)
In the Phase III GCAptAIN study, Cosentyx did not demonstrate a statistically significant improvement in sustained remission compared to placebo in adults with newly diagnosed or relapsing giant cell arteritis (GCA). Safety in GCA was consistent with the known safety profile of Cosentyx.
Kisqali
(ribociclib)
A new subgroup analysis of the Phase III NATALEE trial in HR+/HER2- early breast cancer (eBC) showed that patients receiving Kisqali plus endocrine therapy continued to see consistent reductions in risk of recurrence across all efficacy measures, regardless of age and menopausal status, at median follow-up of 44.2 months. Data presented at ASCO (Free ASCO Whitepaper).
Fabhalta
(iptacopan)
In the Phase IIIb APPULSE-PNH study, adult PNH patients with hemoglobin (Hb) levels ≥10g/dL who switched to Fabhalta from anti-C5 therapies experienced clinically meaningful improvements in Hb levels. The vast majority (92.7%) achieved Hb ≥12g/dL, reaching normal or near-normal levels. No patients treated with Fabhalta required transfusions, experienced breakthrough hemolysis or had any major adverse vascular events during the treatment period. Data presented at EHA (Free EHA Whitepaper).
Scemblix (asciminib)
In the Phase IIIb ASC4START trial evaluating the tolerability and efficacy of Scemblix versus nilotinib in adult patients with newly diagnosed Ph+ CML-CP, patients treated with Scemblix had a 55% lower risk of discontinuation due to AEs vs nilotinib, and 12.7% more patients treated with Scemblix achieved major molecular responses by week 12 vs those treated with nilotinib. Data presented at ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper).
Votoplam
The Phase II PIVOT-HD study of votoplam in patients with Stage 2 and Stage 3 Huntington’s disease met its primary endpoint of reduction in blood Huntingtin (HTT) protein levels at Week 12 (p<0.0001), with durable, dose-dependent lowering observed through Month 12. Across all dose levels and disease stages, votoplam showed a favorable safety and tolerability profile, with no treatment-related serious adverse events or neurofilament light chain protein (NfL) spikes. Together with our partner, PTC Therapeutics, we are evaluating the results and plan to engage with the HD community and regulatory authorities to inform next steps.
Remibrutinib
A Phase II study with remibrutinib in food allergy met its primary endpoint with a statistically significant and clinically meaningful benefit. These data support remibrutinib’s potential as a first-in-class oral BTK inhibitor that reduces the risk of severe allergic reactions, including anaphylaxis. Phase III study planning is underway.
Ianalumab
Novartis will not advance investigation of ianalumab in hidradenitis suppurativa following a Phase II proof-of-concept study which did not meet our target criteria despite demonstrating efficacy vs placebo. No new safety signals were observed and all other studies for ianalumab in B-cell driven diseases continue as planned.
Rapcabtagene autoleucel (YTB323)
A Phase I/II study of rapcabtagene autoleucel, a rapidly manufactured CD19 CAR-T therapy using the T-Charge platform, demonstrated the expansion of CAR-T cells, deep B cell depletion, early and sustained improvement in overall disease activity, and a favorable benefit/risk profile in 21 patients with severe refractory SLE up to 12 months after treatment. Data presented at EULAR.

Zigakibart
Updated results from the Phase I/II study for zigakibart in IgAN showed a robust and clinically meaningful reduction in proteinuria of 60.4% from baseline and eGFR stabilization over 100 weeks of treatment. To date, this is the longest duration of treatment reported for an anti-APRIL agent, demonstrating long-term safety and efficacy. Data presented at ERA. The Phase III BEYOND trial is ongoing with anticipated readout in 2026.
Selected transactions
Novartis has completed the acquisition of Regulus Therapeutics, a clinical-stage biopharmaceutical company focused on developing microRNA therapeutics. Regulus’ lead asset, farabursen, is a potential first-in-class oligonucleotide targeting miR-17 for the treatment of autosomal dominant polycystic kidney disease (ADPKD) that recently completed Phase Ib. The acquisition is aligned with the therapeutic area focus of Novartis and leverages its strength and expertise in renal disease.

In July, Novartis entered into an agreement with Sironax, granting Novartis an exclusive option to acquire its Brain Delivery Module (BDM) platform, a differentiated blood-brain-barrier crossing technology designed to enhance the brain delivery of therapeutics of various modalities.

Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority.

During the first half of 2025, Novartis repurchased a total of 48.8 million shares for USD 5.3 billion on the SIX Swiss Exchange second trading line under the USD 15 billion share buyback (announced in July 2023 and completed on July 1, 2025, with a total of 140.9 million shares repurchased over this period). In addition, 1.6 million shares (equity value of USD 0.2 billion) were repurchased from employees. In the same period, 11.2 million shares (equity value of USD 0.6 billion) were delivered to employees related to equity-based compensation plans. Novartis aims to offset the dilutive impact from equity-based compensation plans of employees over the remainder of the year. Consequently, the total number of shares outstanding decreased by 39.2 million versus December 31, 2024. These treasury share transactions resulted in an equity decrease of USD 4.9 billion and a net cash outflow of USD 5.4 billion.

Net debt increased to USD 23.8 billion at June 30, 2025, compared to USD 16.1 billion at December 31, 2024. The increase was mainly due to the free cash flow of USD 9.7 billion being more than offset by the USD 7.8 billion annual dividend payment, cash outflows for treasury share transactions of USD 5.4 billion and net cash outflow for M&A, intangible assets transactions and other acquisitions of USD 3.1 billion.

As of Q2 2025, the long-term credit rating for the company is Aa3 with Moody’s Ratings and AA- with S&P Global Ratings.

2025 outlook

Barring unforeseen events; growth vs. prior year in cc
Net sales
Expected to grow high single-digit
Core operating income
Expected to grow low-teens

Key assumption:
•
We continue to assume Entresto US generic entry in mid-2025 for forecasting purposes, though timing of generic entry is subject to ongoing IP and regulatory litigation

Foreign exchange impact

If mid-July exchange rates prevail for the remainder of 2025, the foreign exchange impact for the year would be positive 1 percentage point on net sales and negative 1 percentage point on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures1

Q2 2025
Q2 2024
% change
H1 2025
H1 2024
% change

USD m
USD m
USD
cc

USD m
USD m
USD
cc
Net sales
14 054
12 512
12
11

27 287
24 341
12
13
Operating income
4 864
4 014
21
25

9 527
7 387
29
33
As a % of sales
34.6
32.1

34.9
30.3

Net income
4 024
3 246
24
26

7 633
5 934
29
31
EPS (USD)
2.07
1.60
29
32

3.91
2.91
34
37
Net cash flows from operating activities
6 664
4 875
37

10 309
7 140
44

Non-IFRS measures

Free cash flow
6 333
4 615
37

9 724
6 653
46

Core operating income
5 925
4 953
20
21

11 500
9 490
21
24
As a % of sales
42.2
39.6

42.1
39.0

Core net income
4 710
4 008
18
19

9 192
7 689
20
22
Core EPS (USD)
2.42
1.97
23
24

4.69
3.77
24
27

1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 40 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.