Novartis Q1 2026 Results Show Brands Up, U.S. Generics Hit
Novartis Q1 2026 Results show priority-brand gains offset by U.S. generic erosion that trimmed core operating income and prompted a premarket share dip.
KEY TAKEAWAYS
- Net sales were $13.1 billion; volume gains were offset by U.S. generic erosion.
- Core operating income fell to $4.9 billion and core margin narrowed to 37.3%.
- The company reaffirmed FY 2026 guidance while repurchasing $1.6 billion of shares.
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Novartis AG reported on April 28 that priority-brand growth in the first quarter of 2026 was offset by U.S. generic competition, which pressured core operating profit and led the company to reaffirm its full-year guidance.
Quarterly Results and Drivers
Novartis posted net sales of $13.1 billion for Q1 2026, down 1% reported and 5% at constant currencies. Volume contributed 13 percentage points, while U.S. generic competition subtracted 14 points and pricing reduced sales by 4 points, including a 1-point deduction from U.S. revenue, the company said in a press release.
Core operating income fell 12% reported and 14% at constant currencies to $4.9 billion. The core operating margin narrowed 4.8 percentage points reported to 37.3%, reflecting a lower sales base and increased research and development (R&D) spending, according to the SEC filing.
On a GAAP basis, operating income was $4.2 billion and net income totaled $3.2 billion. Reported earnings per share were $1.65, down from a year earlier. The investor presentation listed core earnings per share of $1.99, below the prior-year level.
Priority brands drove growth: Kisqali rose 55%, Pluvicto 70%, Kesimpta 26%, Scemblix 79%, and Leqvio 69% at constant currencies. Entresto declined 46% amid U.S. generic pressure, the company said. CEO Vas Narasimhan said, "Novartis delivered a strong start to 2026 across our priority brands and launches, while US generic erosion weighed on results in Q1 as expected."
U.S. sales totaled $5.0 billion, down 13%, while ex-U.S. revenue rose 8% reported and 1% at constant currencies.
Guidance, Pipeline, and Returns
Novartis reaffirmed its full-year 2026 guidance, expecting net sales to grow low single digits at constant currencies and core operating income to decline low single digits at constant currencies. The outlook assumes no unforeseen major events.
The company highlighted several regulatory and clinical milestones and completed the acquisition of Avidity, adding three late-stage neuromuscular medicines to its portfolio. Remibrutinib received a positive CHMP opinion for chronic spontaneous urticaria, showed positive Phase III results in chronic inducible urticaria, and reported Phase II data in food allergy. Ianalumab gained FDA Breakthrough Therapy designation and priority review for Sjögren’s disease. Cosentyx won FDA approval for pediatric hidradenitis suppurativa, with submissions advanced for palmoplantar pustulosis. Fabhalta posted positive Phase III eGFR results in IgA nephropathy and is under FDA priority review.
Free cash flow was $3.3 billion, roughly flat with the prior year. Novartis repurchased 10.4 million shares for $1.6 billion on the SIX Swiss Exchange, according to the Q1 materials.
