Novartis Raises Guidance After Q3 Sales

Novartis raised guidance on Oct. 27, 2026, after reporting third-quarter sales growth and expanded core margins, despite booking a multibillion impairment tied to the Avidity-acquired candidate del-desiran that reduced reported profit.

Q3 Sales, Margins, and Guidance

Novartis said in a press release on Oct. 27, 2026, that net sales for the quarter ended Sept. 30, 2026, reached $14.5 billion, up 4.0% year over year in both reported dollars and constant currencies. Core operating income rose 10.0% at constant exchange rates to approximately $6.0 billion, exceeding market consensus. Core operating margin expanded by two percentage points to 41.6% of sales, and core earnings per share increased to $2.46. Free cash flow fell 18.0% year over year to $5.1 billion, leaving first-nine-month free cash flow at about $14.0 billion.

The company raised its full-year 2026 core operating income guidance, shifting from a prior forecast of a low-single-digit decline to a view of broadly unchanged to low-single-digit growth, while maintaining full-year net sales guidance at low-single-digit growth. On the earnings call, Chief Executive Vas Narasimhan said, “We now expect for the full year 2026, core operating income to be in line to growing low single digit.” Novartis also projected core net financial expense of about $1.7 billion and a core tax rate near 16.5%. It forecast second-half net sales growth at a mid-to-high-single-digit rate, with core operating income rising in the high-single-digit to low-double-digit range. The company said fourth-quarter core margin would be lower than the third quarter.

Priority-brand sales drove the quarter’s strength, with Kisqali up 37.0%, Kesimpta 22.0%, Scemblix 67.0%, Leqvio 63.0%, and Cosentyx 9.0%, all in constant currency. Novartis attributed growth to demand for priority medicines, volume gains, and productivity measures. Volume contributed 14 percentage points to sales growth, partly offset by 9 percentage points from generic competition.

Del-Desiran Impairment and Reported Profit

Novartis recorded a $1.9 billion partial impairment related to del-desiran following a late-stage trial setback and a revised development timeline requiring additional clinical work. The company described the charge as a partial impairment tied to the development setback rather than a transaction termination fee.

Reported operating income declined about 61.0% year over year to approximately $1.8 billion, and net income fell to about $1.2 billion from $3.9 billion in the year-earlier quarter. Management attributed the decline mainly to higher research-and-development expenses and the impairment. The contrast between rising core metrics and weaker reported results illustrates how one-time development charges can reduce headline profit while underlying operating performance remains strong.

Overall, Novartis raised its core-income outlook based on priority-brand momentum and productivity gains, even as the del-desiran setback trimmed reported earnings.