Novartis Q3 Profit on Track, Boosted by New Drug Sales

Swiss pharmaceutical company Novartis achieved its profit forecast for the third quarter on Tuesday, as robust growth from newer medications compensated for a significant decline in sales of its leading heart medication, Entresto, which is facing competition from generics in the U.S. market.

These results highlight the rationale behind Novartis's aggressive strategy of deal-making this year, as it pursues acquisitions and licensing agreements totaling up to $30 billion thus far to enhance its drug pipeline in light of established treatments losing patent protection.

The firm, which has revised its outlook upward twice this year, reaffirmed its forecasts for 2025 and indicated that it anticipates net sales to increase by a "high single-digit" percentage and adjusted operating income to grow by a "low-teens" percentage.

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Adjusted operating income, accounting for special items, increased by 6% to $5.46 billion in the quarter, slightly surpassing the consensus estimate of $5.4 billion as reported by analysts. During an earnings call, CEO Vas Narasimhan stated that the company does not foresee any repercussions from U.S. trade tariffs, despite President Donald Trump’s threats to impose taxes on drug manufacturers and his advocacy for reduced drug prices for Americans alongside heightened local investment.

“We expect five different groundbreakings before the end of the year at manufacturing sites in the U.S. So, no impact from tariffs on our guidance for the remainder of this year and next year,” Narasimhan said.