Generic drug competition impact performance! Novartis AG Sponsored ADR pharmaceutical (NVS.US) Q1 sales decline for the first time in two years, core operating profit lower than expected.

Novartis AG Sponsored ADR Pharmaceuticals (NVS.US) announced that its first-quarter profits for 2026 were below analyst expectations, with sales unexpectedly declining, due to significant competition from generic drugs impacting some of its top-selling medications. The financial report shows that Novartis AG Sponsored ADR Pharmaceuticals had a net sales of $13.113 billion in the first quarter, down 1% year-on-year, marking the first year-over-year decline in nearly two years. Core operating profit decreased by 12% year-on-year to $4.897 billion, falling short of analysts' expectations of $5.18 billion. Core earnings per share were $1.99, down 13% year-on-year. Vas Narasimhan, CEO of Novartis AG Sponsored ADR Pharmaceuticals, is facing a critical test as he reshapes the company into a focused innovative prescription drug business. The company is dealing with its most challenging "patent cliff" in history, as it is set to lose exclusivity on its heart disease drug Entresto and other longstanding top-selling medications. The financial report shows that key products facing competition from generics, Entresto, Tasigna (chronic myeloid leukemia drug), and Promacta (treatment for low platelet count), saw sales decline by 42%, 59%, and 66% respectively in the first quarter. The company had previously forecasted in its fourth-quarter 2025 financial report that the patent expiration of these products will have a significant impact on performance in the first half of 2026. However, there have been significant sales growth in other innovative drugs. CDK4/6 inhibitor Kisqali sales increased by 59% year-on-year to $1.516 billion, making it the highest-selling drug for Novartis AG Sponsored ADR Pharmaceuticals in the first quarter. In the U.S., the product maintains a leading position in the metastatic breast cancer market, while internationally, Kisqali has been approved for early breast cancer in over 60 countries. Another star product, B-cell therapy Kesimpta, also showed strong sales growth, with revenue increasing by 29% to $1.164 billion, ranking third. The targeted radioligand therapy Pluvicto for treating specific types of prostate cancer saw sales increase by 73% year-on-year to $642 million. The world's first small interfering RNA drug Leqvio for lowering LDL cholesterol saw sales increase by 76% to $452 million. The STAMP inhibitor Scemblix for treating chronic myeloid leukemia saw sales increase by 82% to $433 million. To drive growth, Vas Narasimhan is pursuing acquisitions. Novartis AG Sponsored ADR Pharmaceuticals recently completed the acquisition of Avidity Biosciences last quarter, with a total deal value of up to $12 billion, marking the company's largest acquisition in over a decade. This acquisition aims to gain a platform technology that delivers drugs directly to muscle cellsa next-generation therapy that analysts believe could lead to many blockbuster drugs. Furthermore, Novartis AG Sponsored ADR Pharmaceuticals has committed to building seven new factories in the U.S. as part of its $23 billion plan to expand its local manufacturing layout, aiming to avoid tariff pressures from the Trump administration. Its home country Switzerland is also in negotiations to finalize a trade agreement, with the pharmaceutical industry being a key point of contention.