Novartis AG (NVS) Q2 FY2026

Business

From the FY2025 Form 20-F, accession 0001114448-26-000004 (Item 4 and Item 5).

Novartis is a "pure-play" innovative medicines company: it discovers, develops, manufactures and sells patented prescription drugs. It sells mainly to drug wholesalers, retailers, private health systems, government agencies, managed care providers, pharmacy benefit managers and government-supported healthcare systems in approximately 120 countries. In 2025 it generated net sales of $54.5 billion and net income of $14.0 billion, with 75,267 full-time-equivalent employees. Revenue comes almost entirely from net sales of branded medicines. Smaller "other revenues" ($2.1 billion in 2025) consist of items such as profit-sharing income, royalties and milestones. Novartis has a single global operating segment and is headquartered in Basel, Switzerland.

Where the money comes from. Net sales are concentrated in the US and Europe:

• United States: $23.3 billion (43% of 2025 net sales)
• Europe: $16.7 billion (31%)
• Asia, Africa and Australasia: $10.8 billion (20%)
• Canada and Latin America: $3.7 billion (6%)

Emerging growth markets accounted for $14.0 billion (26%), including $4.2 billion from China. The company names four priority markets: the US, China, Germany and Japan. Customer concentration is high. A significant portion of sales goes to a small number of wholesalers, retail chains, governments and other purchasing organizations; the three largest customers accounted for approximately 18%, 13% and 7% of 2025 net sales.

Therapeutic areas. The portfolio is organized around four core therapeutic areas plus a declining established-brands book. 2025 net sales:

• Oncology: $16.8 billion (+18%). Kisqali (breast cancer, $4.8 billion), Tafinlar + Mekinist ($2.2 billion), Jakavi ($2.1 billion, ex-US only; Incyte holds US rights), Pluvicto (radioligand therapy for prostate cancer, $2.0 billion), Promacta/Revolade, Scemblix (CML, $1.3 billion), Tasigna, Lutathera and Fabhalta.
• Immunology: $10.3 billion (+11%). Cosentyx (IL-17A inhibitor, $6.7 billion), Ilaris ($1.9 billion), Xolair ($1.7 billion; Novartis co-promotes with Genentech in the US and books only ex-US sales), and Rhapsido (oral BTK inhibitor for chronic spontaneous urticaria, approved in the US in 2025).
• Cardiovascular, renal and metabolic: $9.0 billion (+4%). Entresto (heart failure, $7.7 billion; US generic entry in July 2025), Leqvio (twice-yearly siRNA cholesterol therapy, $1.2 billion, licensed from Alnylam) and Vanrafia (IgA nephropathy).
• Neuroscience: $6.0 billion (+26%). Kesimpta (multiple sclerosis, $4.4 billion), the Zolgensma/Itvisma gene therapies for spinal muscular atrophy ($1.2 billion), and Aimovig (ex-US and ex-Japan).
• Established brands: $12.5 billion (-7%). Older, largely off-patent products, including Sandostatin, Exforge, Diovan, Lucentis (ex-US) and Kymriah, plus contract manufacturing sales.

Technology platforms and R&D. Novartis invests in two established platforms (chemistry and biotherapeutics) and three advanced ones: radioligand therapy, xRNA, and cell and gene therapy. R&D expense was $11.2 billion in 2025 (core: $10.3 billion). The company is organized into Biomedical Research (discovery and early clinical work), Development (confirmatory trials and regulatory filings), Operations (manufacturing, supply, IT and procurement), and two commercial units, US and International. It runs a field force of 17,491 full-time equivalents.

Business development. The company supplements its pipeline with frequent bolt-on acquisitions and licensing. In 2025 it acquired Anthos Therapeutics (abelacimab, atrial fibrillation), Regulus Therapeutics (farabursen, polycystic kidney disease) and Tourmaline Bio (pacibekitug, atherosclerotic cardiovascular disease). It also agreed to acquire Avidity Biosciences, which closed in 2026 (see Current quarter).

Exclusivity runway. The 20-F gives these estimated US/EU expiry years for basic patent or regulatory exclusivity on key products:

• Entresto: US combination patent expired; EU regulatory data protection ends in 2026, with an EU combination patent and SPC running to 2028
• Cosentyx: 2029 (US) / 2030 (EU)
• Kisqali: 2031 / 2032
• Kesimpta: 2031 in the US; EU composition-of-matter patent expired
• Pluvicto: 2034 / 2037
• Leqvio: 2034 / 2035
• Scemblix: 2035 / 2037
• Fabhalta: 2034 / 2039

Promacta/Revolade and Tasigna have lost composition-of-matter protection in both regions.

Risk factors

From the FY2025 Form 20-F, accession 0001114448-26-000004 (Item 3.D). Condensed to the risks with company-specific substance.

• US pricing pressure and the IRA. Novartis accepted a Medicare "maximum fair price" for Entresto effective 2026 under the Inflation Reduction Act. CMS has selected Cosentyx, Kisqali and Xolair for Medicare price negotiation for 2028, and more products may be picked later. In December 2025 Novartis reached a voluntary agreement with the US administration. It commits the company to launch future medicines at comparable prices across high-income countries, to apply to the GENEROUS Medicaid model, and to build direct-to-patient platforms. The company warns that most-favored-nation pricing efforts and similar measures could depress prices and access.
• Loss of exclusivity. Generic Entresto entered the US in July 2025, followed by a substantial US sales decline. Entresto's EU regulatory data protection expires in November 2026, and the company expects revenues there to decline substantially afterwards unless later-expiring patents are successfully asserted. Other key products face exclusivity expiries in the coming years, and generics may launch "at risk" before litigation ends.
• Commercial execution and competition. Growth depends on a small number of brands (Kisqali, Kesimpta, Cosentyx, Pluvicto, Scemblix, Leqvio) and on new launches beating competitors. Slower uptake, safety signals, supply problems or competing products could hurt revenue.
• R&D productivity. Pipeline candidates fail at high rates, including after large investments. Accelerated approvals depend on confirmatory studies. Recruiting patients for US trials is getting harder, and post-approval regulatory burdens are rising.
• Acquisitions and integration. Novartis relies heavily on external deals (Anthos, Regulus and Tourmaline in 2025; Avidity in 2026). Acquired assets may fail, integration may fall short, and antitrust scrutiny may delay or block deals.
• Goodwill and intangible impairments. The balance sheet carries large acquired intangibles. Novartis recorded $557 million of intangible-asset impairments in 2025 and warns that further significant charges are possible.
• Indebtedness. At December 31, 2025, Novartis had $27.9 billion of non-current and $5.6 billion of current financial debt. Debt service limits flexibility and is sensitive to interest rates. Debt rose further in 2026 to fund the Avidity acquisition (see Current quarter).
• Tariffs and geopolitics. The US administration proposed tariffs on imported pharmaceuticals in 2025. Novartis says it expects three years of relief from such tariffs in recognition of its planned US R&D and manufacturing expansion. Without that relief, tariffs or export controls could disrupt supply and materially affect results.
• Supply chain and product quality. Manufacturing is complex, especially for radioligand, cell and gene, and xRNA therapies. Some inputs, such as radioisotopes and cell lines, come from a single source. Compliance failures could trigger shutdowns, recalls or warning letters.
• Cybersecurity and IT transformation. The company depends on complex and partly outsourced IT systems, has experienced cyberattacks, and is replacing ageing systems in company-wide programs that could disrupt operations and internal controls.
• Legal and regulatory exposure. Novartis faces investigations and litigation over pricing, marketing practices, bribery, product liability, antitrust and intellectual property, and has previously paid major settlements and entered corporate integrity agreements.
• Healthcare agency disruption. Staff and budget cuts or government shutdowns at the FDA, EMA and other agencies could delay reviews and approvals.
• Tax. The OECD 15% global minimum tax applies in Switzerland, which added the income inclusion rule in 2025. The US One Big Beautiful Bill Act changed the treatment of R&D expenses and raised the rate on foreign-derived income (FDDEI) to 14% from 2026. Transfer-pricing disputes could raise the effective tax rate.
• Currency. The US dollar is the reporting currency, but a large share of costs is in other currencies. Swiss franc expenses are significantly higher than Swiss franc revenue, so exchange-rate moves can materially affect reported results.
• Customer concentration. The three largest customers accounted for about 18%, 13% and 7% of 2025 net sales, and 16%, 12% and 6% of trade receivables at year-end, which concentrates credit risk.
• Artificial intelligence. Novartis warns that failing to execute an effective enterprise AI strategy could cost it competitive advantage in discovery and trials. Using AI also brings legal, ethical and data-rights risks.

Management's discussion, fiscal 2025

From the FY2025 Form 20-F, accession 0001114448-26-000004 (Item 5.A and 5.B).

Fiscal 2025 was a year of strong growth driven by volume. The Entresto patent cliff began to bite in the second half.

Sales. Net sales rose 8% (8% cc) to $54.5 billion. Volume contributed 15 percentage points of growth, generic competition subtracted 6 points and pricing 1 point, and currency had no impact. US sales grew 10% to $23.3 billion and rest-of-world sales grew 7% (6% cc) to $31.2 billion. The main growth drivers were Kisqali ($4.8 billion, +58%), Kesimpta ($4.4 billion, +37%), Pluvicto ($2.0 billion, +43%), Scemblix ($1.3 billion, +87%) and Cosentyx ($6.7 billion, +9%). Generic erosion of Promacta, Tasigna and Lucentis offset part of that growth. Entresto declined 1% to $7.7 billion as US generics entered in the third quarter of 2025. Leqvio reached blockbuster status at $1.2 billion (+59%), and Fabhalta nearly quadrupled to $0.5 billion.

Profitability. Operating income rose 21% (+25% cc) to $17.6 billion, a 32.4% margin, up 3.5 points. The company attributes the increase to higher sales and lower impairments, partly offset by investment behind priority brands and launches. The prior year had included a goodwill impairment. R&D expense rose 12% to $11.2 billion as the company invested in recently acquired assets. Core operating income rose 12% (+14% cc) to $21.9 billion, a 40.1% core margin (up 1.4 points). Net income was $14.0 billion (+17%) and basic EPS $7.21 (+22%), which benefited from a lower share count. Core EPS was $8.98 (+15%). The reported tax rate was 14.6%, against 12.5% in 2024.

Cash and capital. Operating cash flow was $19.1 billion (+9%) and free cash flow $17.6 billion (+8%). Novartis returned cash on a large scale. It repurchased 77.6 million shares for $8.9 billion, completing its $15 billion buyback (announced July 2023) in July 2025 and starting a new program of up to $10 billion, and it paid a $7.8 billion dividend. Net debt rose to $21.9 billion from $16.1 billion, and debt/equity rose to 0.72:1 from 0.67:1. In November 2025 the company issued $6.0 billion of US dollar bonds. Year-end liquidity was $11.6 billion, backed by a $6.0 billion committed credit facility maturing in May 2029, which was undrawn. Ratings were Aa3 (Moody's) and AA- (S&P).

Current quarter, Q2 and first half 2026

From the Q2/H1 2026 results on Form 6-K, accession 0001114448-26-000012 (Exhibit 99.1 release; Exhibit 99.2 condensed interim financial report).

Headline. Sales returned to growth in the second quarter, but the Entresto and Promacta generic cliff and higher interest and tax costs pushed reported earnings down sharply. Net sales grew 3% (+1% cc) to $14.4 billion. Operating income fell 2% (-3% cc) to $4.75 billion, a 33.0% margin, down 1.6 points. Net income fell 19% to $3.26 billion and EPS fell 17% to $1.71. Core operating income was flat at $5.94 billion, with the core margin down 1.0 point to 41.2%. Core EPS was $2.41, against $2.42 a year earlier. For the first half, net sales were $27.5 billion (+1%, -2% cc), net income $6.41 billion (-16%) and core EPS $4.39 (-6%).

Sales drivers. In the quarter, volume added 18 percentage points of growth, generic competition subtracted 14 points and pricing 3 points, and currency added 2 points. Regionally:

• US: sales fell 5% to $6.0 billion (41% of the total, down from 44%). Strong growth from Kisqali, Kesimpta, Scemblix, Cosentyx and Pluvicto was more than offset by Entresto and Promacta generics. US Entresto net sales were negative $2 million in the quarter, which the company attributes mainly to a change in revenue deductions. Essentially all of Entresto's $1,181 million (-50%) came from outside the US.
• Europe: sales rose 6% (+4% cc) to $4.4 billion.
• Emerging growth markets: sales rose 10% (+6% cc) to $3.9 billion, including $1.2 billion from China.

Brand performance (Q2 2026). Growth brands are absorbing the generic losses:

• Cosentyx: $1,824 million (+12%), led by the US, including hidradenitis suppurativa and the IV formulation; China declined.
• Kisqali: $1,695 million (+44%), on continued share gains in early breast cancer.
• Kesimpta: $1,424 million (+32%).
• Pluvicto: $651 million (+43%), on demand in the pre-taxane setting.
• Scemblix: $562 million (+89%).
• Leqvio: $480 million (+61%), helped by its January inclusion in China's national reimbursement list.
• Fabhalta: $225 million (+88%).
• Zolgensma Group: $365 million (+23%), driven by the Itvisma launch.
• Rhapsido: $64 million in its early launch.
• Generic and biosimilar erosion: Promacta/Revolade fell 64% to $179 million, Tasigna fell 57% to $142 million and Xolair fell 23% to $342 million on biosimilar pressure.

By therapeutic area, oncology grew 35% to $4.5 billion, immunology 9% to $2.8 billion and neuroscience 29% to $1.9 billion. Cardiovascular, renal and metabolic fell 36% to $1.7 billion and established brands fell 12% to $3.5 billion.

Margins and costs. Gross profit fell 2% to $11.2 billion. The company attributes the decline to a prior-year royalty settlement and unfavorable product mix: royalty income was $27 million, against $318 million that included a $0.3 billion settlement. SG&A fell 6% to $3.2 billion, which the company credits to productivity. R&D rose 4% to $2.8 billion on investment in recently acquired assets. Other expense fell on lower legal costs. Core adjustments rose to $1.2 billion, with higher restructuring and impairments. Intangible impairments were $199 million, against $92 million.

Below the operating line. Interest expense jumped to $462 million from $289 million because of higher financial debt. The quarterly tax rate rose to 23.7% from 11.2%. The company cites the tax effect of an intercompany transaction and changes in uncertain tax positions; excluding those items the rate would have been 17.3%, against 15.5%. The core tax rate was 16.7%. Together these explain why net income fell 19% while operating income fell only 2%.

Cash flow. Q2 operating cash flow was $5.9 billion (-12%) and free cash flow $5.6 billion (-12%), reflecting lower net income adjusted for non-cash items and unfavorable changes in other financial receipts. For the first half, operating cash flow was $9.6 billion (-7%) and free cash flow $8.9 billion (-9%).

Acquisitions in the first half. Novartis made three acquisitions in the half, with related cash outflows totaling $14.4 billion:

• Avidity Biosciences closed on February 27, 2026 at $72.00 per share in cash, about $12.0 billion on a fully diluted basis. Avidity is an RNA-therapeutics company focused on rare neuromuscular diseases (DM1, FSHD and DMD). The preliminary allocation assigned $11.3 billion to identifiable intangible assets, of which about $7.5 billion went to the DM1 in-process R&D asset, and $1.4 billion to goodwill.
• Pikavation Therapeutics (from Synnovation Therapeutics) closed on May 28, 2026: $1.8 billion in cash plus up to $1.2 billion in milestones, for a pan-mutant selective PI3Kα inhibitor program (SNV4818).
• Excellergy closed on June 24, 2026: $0.9 billion in cash plus up to $1.1 billion in milestones, for next-generation anti-IgE therapies.

Financing and balance sheet. Avidity was first funded with an $11.0 billion SOFR-based bridge loan. Novartis repaid it on March 18, 2026 with proceeds of US dollar bonds issued in seven tranches with $11.0 billion of notional, maturing between 2029 and 2056 at coupons from SOFR+0.65% to 5.70%. In the second quarter it added euro bonds maturing in 2032, 2035 and 2041, which raised $2.0 billion. Bond issuance brought in $12.9 billion of cash in the half. At June 30, 2026, net debt was $39.4 billion, up from $21.9 billion at year-end, and debt/equity was 1.12:1, up from 0.72:1. Total financial debt was $47.1 billion, liquidity $7.7 billion and equity $41.9 billion, down $4.6 billion. Ratings remained Aa3 and AA-. Undiscounted R&D milestone commitments totaled $19.7 billion.

Shareholder returns. Novartis paid its annual dividend of $9.1 billion in the first quarter. In the first half it repurchased 18.2 million shares for $2.8 billion. Of these, 13.8 million shares ($2.1 billion) were bought under the up-to-$10 billion program announced in July 2025, which has up to $5.6 billion left to execute.

Pipeline and regulatory (Q2). Novartis says it has about 100 projects in clinical development. Second-quarter milestones:

• Approvals: Rhapsido for chronic spontaneous urticaria in the EU and Japan; Itvisma in the EU for SMA patients two years and older; Cosentyx for juvenile ankylosing spondylitis in the US.
• Submissions: a BLA for del-zota (from Avidity), seeking accelerated approval in Duchenne muscular dystrophy patients amenable to exon 44 skipping; traditional-approval submissions for Vanrafia in IgAN in the US and EU. Submissions for Cosentyx in polymyalgia rheumatica and ianalumab in Sjögren's disease were made in the first quarter.
• Kisqali: six-year NATALEE follow-up showed clinically meaningful overall survival in early breast cancer. The FDA granted pediatric exclusivity, adding six months to all of its Orange Book-listed patents.
• Other data: Rhapsido met its Phase III primary endpoint in chronic inducible urticaria, and del-brax met its Phase I/II biomarker endpoints in FSHD. Ianalumab's Phase III VAYHIA study in warm autoimmune hemolytic anemia did not meet its primary endpoint.

Legal developments (as of July 20, 2026).

• Lutathera: in June 2026 the US District Court for Delaware ruled against the validity of Novartis patents covering Lutathera, which run to 2039 with pediatric exclusivity. Novartis has appealed. No manufacturer has final US approval, but a launch before the appeal is decided would be at risk.
• IRA challenge: the US Supreme Court declined in May 2026 to hear Novartis's constitutional challenge to the IRA drug-price negotiation program, ending that litigation.
• Gilenya: a district court denied Novartis's motion to dismiss the S.D.N.Y. qui tam case over Gilenya marketing practices in March 2026, and the case moved to discovery.
• Greece: the Court of Appeal upheld the annulment of the SDOE fine in June 2026. The Greek State's civil claim of about $225 million, rejected at first instance in May 2025, is under appeal, and a separate suit by the National Social Security Fund of Greece over the same facts is being contested.

Outlook. Novartis reaffirmed its full-year 2026 guidance in constant currencies: net sales growing by a low single-digit percentage and core operating income declining by a low single-digit percentage. If mid-July exchange rates held, currency would add about 1 percentage point to both. Management said it remained on track for its mid-term outlook.

Subsequent events

From Note 10 (Commitments) and Note 11 (Events subsequent to the June 30, 2026 balance sheet date) of the condensed interim financial report and the Q2 release, Form 6-K accession 0001114448-26-000012; later items from the Form 6-K press releases named below.

Events disclosed in the interim report:

• Agreement to acquire Myricx Bio (July 5, 2026). Novartis signed a stock purchase agreement to acquire Myricx Bio, a privately held UK biotechnology company. Myricx is developing a new class of antibody-drug conjugates that use N-myristoyltransferase inhibitor (NMTi) payloads; its two lead assets target B7-H3 and HER2. Novartis will pay $1.1 billion at closing plus up to $0.4 billion in milestone payments. Closing is expected in the second half of 2026, subject to customary conditions including regulatory approval. This is the only event Note 11 identifies.
• Fabhalta traditional approval in IgAN (July 2026). The FDA granted traditional approval of Fabhalta as the first complement inhibitor shown to significantly slow kidney-function decline in adults with primary IgA nephropathy at risk of progression.

Later pipeline readouts. Three Phase III readouts in September 2026 bear on the story above. Remibrutinib, the molecule sold as Rhapsido for urticaria, met its primary endpoint in relapsing multiple sclerosis, a potential new indication (Form 6-K accession 0001171843-26-005824). Pelacarsen, the Ionis-licensed Lp(a) drug listed for a 2026 submission, failed its cardiovascular outcomes trial (accession 0001171843-26-005896). Del-desiran failed its HARBOR study in myotonic dystrophy type 1 (accession 0001171843-26-005908). Del-desiran is one of the three antibody-oligonucleotide conjugate programs acquired with Avidity, and about $7.5 billion of the Avidity purchase price was allocated to the DM1 in-process R&D asset. In that release Novartis also said the FDA had granted priority review to del-zota, and it maintained its guidance for a 5–6% five-year sales compound annual growth rate over 2025–2030.

Filings that contain financial statements

• Form 6-K filed July 21, 2026, accession 0001114448-26-000012: second quarter and first half 2026 (periods ended June 30, 2026). Exhibit 99.1 is the Q2 2026 financial report (key figures, results discussion, net debt); Exhibit 99.2 is the condensed interim financial report with the income statement, balance sheet, cash flow statement, statement of changes in equity and notes, including quarterly and half-year comparatives for 2025. This is the primary source for the current period.
• Form 6-K filed April 28, 2026, accession 0001114448-26-000010: first quarter 2026 (period ended March 31, 2026); Exhibit 99.1 financial report and Exhibit 99.2 condensed interim financial statements.
• Form 6-K filed February 4, 2026, accession 0001114448-26-000007: fourth quarter and full year 2025 (year ended December 31, 2025); Exhibit 99.1 financial report and Exhibit 99.2 condensed financial report with statements.
• Form 6-K filed February 4, 2026, accession 0001114448-26-000008: furnishes the Annual Report 2025 (Exhibit 99.1) and the Report on Nonfinancial Matters 2025 (Exhibit 99.2).
• Form 6-K filed October 28, 2025, accession 0001114448-25-000003: third quarter and nine months 2025 (period ended September 30, 2025); Exhibit 99.1 financial report and Exhibit 99.2 condensed financial report with statements.

Second quarter 2026 results (Form 6-K, July 21, 2026, accession 0001114448-26-000012)

• Q2 net sales were $14,408 million, up 3% in US dollars and 1% in constant currencies (Q2 2025: $14,054 million). Operating income was $4,750 million (down 2%), net income $3,257 million (down 19%) and EPS $1.71 (down 17%). Core operating income was $5,940 million (flat) at a 41.2% margin, against 42.2% a year earlier; core EPS was $2.41.
• Free cash flow in Q2 was $5,561 million, down 12%. Net cash from operating activities was $5,882 million.
• First half: net sales $27,521 million (up 1%, down 2% in constant currencies), operating income $8,985 million, net income $6,413 million, core operating income $10,837 million (margin 39.4%), free cash flow $8,891 million.
• Growth came from Kisqali ($1,695 million, up 43% in constant currencies), Kesimpta ($1,424 million, up 32%), Scemblix ($562 million, up 89%), Pluvicto ($651 million, up 43%) and Leqvio ($480 million, up 59%). Entresto fell 51% in constant currencies to $1,181 million. The company cited volume growth of 18 percentage points offset by 14 points from generic competition and 3 points of price erosion.
• Guidance reaffirmed: full-year 2026 net sales expected to grow low single digit and core operating income to decline low single digit, in constant currencies. If mid-July exchange rates hold, currency is expected to add 1 percentage point to both.
• Net debt rose to $39.4 billion at June 30, 2026 from $21.9 billion at December 31, 2025, as free cash flow of $8.9 billion was more than offset by $15.3 billion of net acquisition and intangible asset outflows, the $9.1 billion dividend and $3.1 billion of treasury share transactions. Ratings: Aa3 (Moody's) and AA- (S&P).
• Buyback: in the first half the company repurchased 18.2 million shares for $2.8 billion, including 13.8 million shares ($2.1 billion) under the up-to $10 billion program announced in July 2025, with up to $5.6 billion still to be executed.
• Intangible asset impairment charges were $199 million in Q2 2026 (Q2 2025: $92 million).

M&A

• Avidity Biosciences - closed. Merger agreement signed October 25, 2025 and announced in a Form 6-K dated October 27, 2025 (accession 0001171843-25-006660): $72.00 per share in cash, about $12 billion in total, with Avidity separating its early-stage cardiology programs into a new company before closing. The condensed interim report states the acquisition was completed on February 27, 2026, with Avidity delisted from NASDAQ. Preliminary allocation: identifiable intangibles including IPR&D of $11.3 billion (about $7.5 billion attributable to the DM1 asset), net deferred tax liabilities of $1.9 billion, and goodwill of approximately $1.4 billion (accession 0001114448-26-000012). The Q1 2026 release (accession 0001114448-26-000010) records the completion.
• Financing of Avidity. A $11.0 billion bridge loan entered into in February 2026 was fully repaid on March 18, 2026 from bond proceeds (see capital actions).
• Tourmaline Bio - closed. Tender offer at $48.00 per share in cash expired October 27, 2025; Novartis paid $1.4 billion on October 28, 2025, when a Novartis subsidiary merged into Tourmaline, making it an indirect wholly owned subsidiary; its shares were delisted from NASDAQ. Accounted for as an asset acquisition, with $1.2 billion allocated to an IPR&D asset (pacibekitug, atherosclerotic cardiovascular disease) (accession 0001114448-26-000012, Note 3).
• Pikavation Therapeutics (SNV4818) - closed. Stock purchase agreement March 18, 2026; closed May 28, 2026. Cash consideration $1.8 billion plus up to $1.2 billion in milestones, all allocated to an IPR&D asset (accession 0001114448-26-000012).
• Excellergy (Exl-111) - closed. Agreement March 26, 2026; closed June 24, 2026, earlier than the H2 2026 closing the Q1 release anticipated. Cash consideration $0.9 billion plus up to $1.1 billion in milestones (accessions 0001114448-26-000012; 0001114448-26-000010).
• Myricx Bio - signed, not closed. Stock purchase agreement dated July 5, 2026 for a UK antibody-drug conjugate developer: $1.1 billion payable at closing plus up to $0.4 billion contingent on milestones; closing expected in the second half of 2026 subject to customary conditions (accession 0001114448-26-000012, described as a pending commitment in the subsequent-events note).

Capital actions

• Bond issuance, March 2026. Novartis Capital Corporation issued $11.0 billion of notes under a terms agreement dated March 16, 2026: $500 million floating rate due 2029, $1,250 million 4.100% due 2029, $1,750 million 4.400% due 2031, $2,000 million 4.600% due 2033, $2,250 million 4.900% due 2036, $1,000 million 5.600% due 2046 and $2,250 million 5.700% due 2056 (Form 6-K, accession 0001104659-26-031037). The condensed report also lists euro bonds issued by Novartis Finance S.A. in the first half (EUR 600 million due 2032, EUR 600 million due 2035, EUR 500 million due 2041), bringing first-half bond issuance to $12,849 million; total bonds were $40,542 million at June 30, 2026 (accession 0001114448-26-000012).
• Bond issuance, November 2025. $6.0 billion of notes under a terms agreement dated November 3, 2025: $800 million floating rate due 2028, $700 million 3.900% due 2028, $1,750 million 4.100% due 2030, $925 million 4.300% due 2032, $925 million 4.600% due 2035, $350 million 5.200% due 2045 and $550 million 5.300% due 2055 (Form 6-K, accession 0001104659-25-107058).
• Dividend. The board proposed a dividend of CHF 3.70 per share for 2025, up 5.7% from CHF 3.50 and the 29th consecutive increase, for a vote at the March 6, 2026 annual general meeting; the Q1 2026 release reports the $9.1 billion gross dividend paid in March (Form 6-K, February 4, 2026, accession 0001114448-26-000007; accession 0001114448-26-000010). The same release proposed cancelling 77,602,358 repurchased shares.
• Buyback. Up-to $10 billion program announced July 2025; in 2025 the company repurchased 77.6 million shares for $8.9 billion in total (accession 0001114448-26-000007).

Guidance and outlook

• February 4, 2026 (accession 0001114448-26-000007): FY2025 net sales $54,532 million (up 8%), operating income $17,644 million, net income $13,967 million, core EPS $8.98 and free cash flow $17,596 million. First 2026 guidance: low single-digit net sales growth and low single-digit core operating income decline. The release notes a December 19, 2025 agreement with the US government on lower US drug prices, reflected in the 2026 guidance and the 2025-2030 outlook.
• April 28, 2026 (accession 0001114448-26-000010): Q1 net sales $13,113 million (down 1%, down 5% in constant currencies), core operating income $4,897 million (down 12%), core EPS $1.99, free cash flow $3,330 million; guidance reaffirmed.
• November 20, 2025 (accession 0001171843-25-007445): mid-term outlook rolled forward to a 5-6% constant-currency sales CAGR for 2025-2030 (after raising the 2024-2029 outlook to 6%); peak sales guidance raised for Kisqali and Scemblix.
• September 8, 2026 (accession 0001171843-26-005908): the company stated it maintains the 5-6% five-year sales CAGR guidance.

Clinical and regulatory events

• September 8, 2026: Phase III HARBOR study of del-desiran in myotonic dystrophy type 1 did not meet its primary endpoint (video hand opening time); the company will analyze the full data set and determine a development path. Del-desiran came with the Avidity acquisition (accession 0001171843-26-005908).
• September 4, 2026: Phase III Lp(a)HORIZON outcomes trial of pelacarsen in 8,323 patients did not meet its primary cardiovascular events endpoint despite lowering Lp(a) (accession 0001171843-26-005896).
• September 1, 2026: Phase III REMODEL-1/-2 trials of remibrutinib in relapsing multiple sclerosis met the primary endpoint against teriflunomide; the company plans global regulatory submissions (accession 0001171843-26-005824).
• June 11, 2026: biomarker cohort of the Phase I/II FORTITUDE study of del-brax in FSHD met its primary and key secondary endpoints (accession 0001171843-26-004052).
• Q2 2026 milestones (accession 0001114448-26-000012): European and Japanese approval of Rhapsido in chronic spontaneous urticaria; European approval of Itvisma; FDA pediatric exclusivity for Kisqali adding six months to Orange Book-listed patents; del-zota BLA submitted to the FDA for accelerated approval in Duchenne muscular dystrophy; FDA traditional approval of Fabhalta in IgA nephropathy in July.
• November 24, 2025: FDA approved Itvisma for children two years and older, teens and adults with SMA (accession 0001171843-25-007547).
• September 30, 2025: FDA approved Rhapsido (remibrutinib) for chronic spontaneous urticaria (accession 0001171843-25-006196).

Legal

• June 2026: the US District Court for the District of Delaware issued a negative decision on the validity of Novartis patents covering Lutathera, which expire in 2039 with pediatric exclusivity. Novartis has appealed; no manufacturer has final US approval, and any launch before the appeal is decided may be at risk. Lutathera Q2 2026 net sales were $225 million (accession 0001114448-26-000012).
• May 2026: the US Supreme Court declined to hear Novartis's constitutional challenge to the IRA drug-price negotiation program, ending that litigation (accession 0001114448-26-000012, Note 7).

Upcoming dates stated by the company

Third quarter and nine-month 2026 results on October 27, 2026; Meet Novartis Management on November 18-19, 2026; fourth quarter and full-year 2026 results on February 3, 2027 (accession 0001114448-26-000012).

About this file

NVS annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

NVS quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source form, Q2 2026. 6-K (interim financial report, Exhibit 99.2)
• Source form, Q2 2025. 6-K (interim financial report, Exhibit 99.2), prior-year comparative column

NVS year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source form, H1 2026. 6-K (interim financial report, Exhibit 99.2)
• Source form, H1 2025. 6-K (interim financial report, Exhibit 99.2), prior-year comparative column

NVS trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Derivation. H1 2026 plus FY2025 less H1 2025, each as printed in the interim financial report (accession 0001114448-26-000012) and the FY2025 20-F (accession 0001114448-26-000004)

Adjustments

Notes

• Novartis AG files as a foreign private issuer: its annual report is a Form 20-F and its quarterly results are furnished on Form 6-K. Annual figures come from the FY2025 20-F (accession 0001114448-26-000004); quarterly, first-half and June 30 balance sheet figures come from the condensed interim consolidated financial statements for the period ended June 30, 2026, Exhibit 99.2 to the 6-K filed July 21, 2026 (accession 0001114448-26-000012). The interim statements are unaudited.
• Novartis reports under IFRS Accounting Standards in US dollars, so no currency conversion was applied. Each American Depositary Share represents one ordinary share (20-F cover page), so every per-share figure here is also the per-ADS figure.
• Novartis operates as a single global innovative medicines segment. Its income statement shows net sales to third parties and other revenues separately and does not print a total revenue line; total_revenues_derived is the sum of the two, which is the base from which the statement's gross profit is struck.
• Expense and cash outflow lines (cost of goods sold, operating expenses, interest expense, income taxes, capital expenditure, purchases of intangible assets, acquisitions, dividends and treasury share purchases) are shown as positive amounts. Net subtotals that can take either sign (other financial income and expense, net income attributable to non-controlling interests, investing and financing cash flows) keep the sign the filing prints.
• capex is purchases of property, plant and equipment only. Free cash flow follows Novartis's own definition (net cash flows from operating activities less purchases of property, plant and equipment); it is a non-IFRS measure. The company prints it for Q2 2026, Q2 2025, H1 2026, H1 2025, FY2025 and FY2024; the FY2023 figure is computed here on the same definition from continuing operations (14,220 less 1,060, in USD millions). Purchases of intangible assets and acquisitions are not deducted.
• FY2023 includes the Sandoz business, distributed to Novartis shareholders on October 3, 2023, as discontinued operations. For FY2023, net_income and diluted_eps are the totals including the USD 5.86 billion gain on the Sandoz distribution; the continuing-operations figures are given separately. operating_cash_flow, investing_cash_flow and financing_cash_flow are continuing-operations figures in every year (in FY2024 and FY2025 there were no discontinued operations, so they equal the totals); the FY2023 totals including discontinued operations are given separately.
• total_financial_debts and net_debt are taken from Novartis's own net debt tables: financial debts include current derivative financial instruments, and net debt is total financial debts less cash and cash equivalents and marketable securities, time deposits and derivative financial instruments. Lease liabilities are not included. Net debt is shown as a positive amount.
• The June 30, 2025 balance sheet is not presented in the interim report. Only the items the report prints for that date are given for Q2 2025: the components of net debt and the number of shares outstanding.
• Q1 2026 is not presented as a separate column in the interim report and is not included here. The first-half figures are in year_to_date. The trailing-twelve-month figures are computed as H1 2026 plus FY2025 less H1 2025.
• In the first half of 2026 Novartis completed the acquisition of Avidity Biosciences for approximately USD 12.0 billion in cash (closed February 27, 2026), shown in acquisitions_of_businesses (USD 11,704 million in H1 2026). It also acquired Pikavation Therapeutics (closed May 28, 2026) and Excellergy (closed June 24, 2026); these were accounted for as asset acquisitions, shown in acquisitions_applying_optional_concentration_test (USD 2,720 million in Q2 2026). The acquisitions were funded with cash and new debt: non-current financial debts rose to USD 37.5 billion and net debt to USD 39.4 billion at June 30, 2026, from USD 21.9 billion at December 31, 2025.
• Q2 2025 dividends_paid (USD 2,485 million) and Q2 2026 dividends_paid (USD 2,871 million) are Swiss withholding tax payments made in April on the annual dividend paid in the first quarter, as the interim report explains.
• Blank cells on the FY2025 20-F cash flow statement (acquisitions applying the optional concentration test in FY2024 and FY2023) are recorded as zero.
• Net sales by region are by location of customer, as Novartis discloses them. 'Established markets' are the US, Canada, Western Europe, Japan, Australia and New Zealand; 'emerging growth markets' are all other markets.

Uncertainties

• The interim financial statements for the period ended June 30, 2026 are unaudited, and the Avidity purchase price allocation is preliminary. Goodwill, intangible assets and deferred taxes at June 30, 2026 may change when it is finalized.
• The FY2023 free cash flow is computed here from continuing operations on Novartis's current definition. It is not printed in the FY2025 20-F.

Company details

Fiscal period

Source filings