Novartis AG 6-K, filed Apr 28, 2026
Novartis AG (NVS)
6-K
2026-04-28
For: 2026-03-31
View Original
Added on
April 28, 2026
About this 6-K
Novartis AG filed this 6-K on April 28, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated
April 28, 2026
(Commission File No. 1-15024)
Novartis AG
(Name of Registrant)
Lichtstrasse 35
4056 Basel
Switzerland
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
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Form 20-F: x
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Form 40-F: o
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Incorporation by Reference:
This Report on Form 6-K (only with respect to (i) information under “R&D update - key developments from the first quarter” in Exhibit 99.1 hereto, and (ii) Exhibit 99.2 hereto to this Report on Form 6-K) shall be deemed to be incorporated by reference into the registration statements on Form S-8 (File Nos. 333-171739, 333-198706, 333-250207, 333-258081 and 333-293197) and to be a part thereof from the date on which this report is filed to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Novartis AG
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Date:
April 28, 2026
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By:
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/s/ PAUL PENEPENT
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Name:
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Paul Penepent
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Title:
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Head Financial Reporting and Accounting
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Novartis International AG CH-4002 Basel Switzerland
https://www.novartis.com https://x.com/novartisnews |
FINANCIAL RESULTS | FINANZERGEBNISSE
Novartis delivered strong growth in priority brands and launches in Q1; FY 2026 guidance reaffirmed
Ad hoc announcement pursuant to Art. 53 LR
First quarter
| · | Net sales declined -5% (cc1, -1% USD), as growth drivers were more than offset by US generic erosion |
| o | Continued strong performance from priority brands including Kisqali (+55% cc), Pluvicto (+70% cc), Kesimpta (+26% cc), Scemblix (+79% cc) and Leqvio (+69% cc) |
| · | Core operating income1 down -14% (cc, -12% USD), due to lower net sales and higher R&D investment |
| o | Core operating income margin1 was 37.3% |
| · | Operating income declined -11% (cc, -9% USD); net income down -13% (cc, -13% USD) |
| · | Core EPS1 declined -15% (cc, -13% USD) to USD 1.99 |
| · | Free cash flow1 was USD 3.3 billion, broadly in line with the prior-year quarter |
| · | Q1 selected innovation milestones: |
| o | Remibrutinib positive CHMP opinion for CSU, positive Phase III readout in CIndU and Phase II data in food allergy |
| o | Ianalumab FDA Breakthrough Therapy designation and priority review in SjD |
| o | Cosentyx FDA approval for pediatric HS patients, regulatory submissions for PMR |
| o | Fabhalta positive Phase III eGFR results in IgAN, FDA priority review for traditional approval |
| o | Completed acquisition of Avidity, adding three late-stage medicines addressing neuromuscular disease |
| · | Full year 2026 guidance2 reaffirmed |
| o | Net sales expected to grow low single-digit and core operating income expected to decline low single-digit |
Basel, April 28, 2026 – Commenting on Q1 2026 results, Vas Narasimhan, CEO of Novartis, 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. We continued to advance our pipeline, with compelling Phase III results for remibrutinib in chronic inducible urticaria and Phase II data in food allergy, reinforcing the medicine’s pipeline-in-a-pill potential. We also completed the acquisition of Avidity and announced early-stage deals to support our breast cancer and allergic disease franchises. With the momentum we are seeing across the business, we remain on track to deliver our full year guidance and look forward to multiple readouts in the second half that could raise our mid- to long-term growth outlook.”
| Key figures | ||||
| Q1 2026 | Q1 2025 | % change | ||
| USD m3 | USD m3 | USD | cc | |
| Net sales | 13 113 | 13 233 | -1 | -5 |
| Operating income | 4 235 | 4 663 | -9 | -11 |
| Net income | 3 156 | 3 609 | -13 | -13 |
| EPS (USD) | 1.65 | 1.83 | -10 | -11 |
| Free cash flow | 3 330 | 3 391 | -2 | |
| Core operating income | 4 897 | 5 575 | -12 | -14 |
| Core net income | 3 794 | 4 482 | -15 | -17 |
| Core EPS (USD) | 1.99 | 2.28 | -13 | -15 |
1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 32 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 6. 3. USD millions unless indicated otherwise.
Strategy
Our focus
Novartis is a “pure-play” innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan.
Our priorities
| 1. | Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas. |
| 2. | Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility. |
| 3. | Strengthen foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society. |
Financials
First quarter
Net sales were USD 13.1 billion (-1%, -5% cc), with volume contributing 13 percentage points to growth, more than offset by 14 percentage points of generic competition. Pricing had a negative impact of 4 percentage points, including net 1 percentage point from revenue deduction adjustments in the US, and currency had a positive impact of 4 percentage points.
Operating income was USD 4.2 billion (-9%, -11% cc), declining due to lower net sales and higher R&D investments, partly offset by higher divestment gains.
Net income was USD 3.2 billion (-13%, -13% cc), mainly due to lower operating income. EPS was USD 1.65 (-10%, -11% cc), due to lower net income, partly offset by the benefit of the lower weighted average number of shares outstanding.
Core operating income was USD 4.9 billion (-12%, -14% cc), declining due to lower net sales and higher R&D investments. Core operating income margin was 37.3% of net sales, decreasing 4.8 percentage points (4.1 percentage points in cc).
Core net income was USD 3.8 billion (-15%, -17% cc), mainly due to lower core operating income. Core EPS was USD 1.99 (-13%, -15% cc), due to lower core net income, partly offset by the benefit of the lower weighted average number of shares outstanding.
Free cash flow amounted to USD 3.3 billion, broadly in line with the prior-year quarter.
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Q1 priority brands
Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q1 growth) including:
| Kisqali | (USD 1 516 million, +55% cc) sales grew strongly across all regions, with continued momentum in the early breast cancer indication as well as leadership in metastatic breast cancer. |
| Pluvicto | (USD 642 million, +70% cc) sales showed continued strong demand in the pre-taxane metastatic castration-resistant prostate cancer (mCRPC) setting in the US, as well as access expansion ex-US. |
| Kesimpta | (USD 1 164 million, +26% cc) sales grew across all regions, driven by increased demand and strong access. |
| Leqvio | (USD 452 million, +69% cc) accelerated growth ex-US, driven by strong uptake in China following NRDL-listing. |
| Scemblix | (USD 433 million, +79% cc) sales grew across all regions, with continued strong momentum from the early-line indication in the US, Japan and Germany. |
| Fabhalta | (USD 169 million, +103% cc) sales more than doubled in Q1, reflecting continued expansion in PNH and renal indications. |
| Rhapsido | (USD 37 million) continued to show strong early uptake in the US, supported by a free drug program to facilitate patient access and increasing coverage. |
| Cosentyx | (USD 1 566 million, -2% cc) sales were broadly stable. US sales declined, as demand growth was offset by positive revenue deduction adjustments in the prior-year quarter. Ex-US, sales continued to grow. Underlying sales growth globally was +2% cc. |
| Zolgensma Group | (USD 302 million, -12% cc) sales declined, reflecting a lower incidence of SMA, despite continued strong share in the incident population, as well as treatment phasing. |
Net sales of the top 20 brands in the first quarter
| Q1 2026 | % change | ||
| USD m | USD | cc | |
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Cosentyx - excluding revenue deduction adjustments* |
1 566
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2 5 |
-2 2 |
| Kisqali | 1 516 | 59 | 55 |
| Entresto | 1 305 | -42 | -46 |
| Kesimpta | 1 164 | 29 | 26 |
| Pluvicto | 642 | 73 | 70 |
| Jakavi | 557 | 13 | 5 |
| Tafinlar + Mekinist | 493 | -11 | -14 |
| Ilaris | 475 | 13 | 10 |
| Leqvio | 452 | 76 | 69 |
| Scemblix | 433 | 82 | 79 |
| Xolair | 388 | -15 | -20 |
| Zolgensma Group | 302 | -8 | -12 |
| 3 |
| Sandostatin Group | 287 | -9 | -12 |
| Lutathera | 211 | 9 | 7 |
| Exforge Group | 203 | 13 | 7 |
| Promacta/Revolade | 184 | -66 | -68 |
| Fabhalta | 169 | 109 | 103 |
| Tasigna | 155 | -59 | -61 |
| Diovan Group | 150 | 0 | -4 |
| Myfortic | 111 | 12 | 9 |
| Top 20 brands total | 10 763 | 1 | -3 |
*Q1 sales growth impacted by US revenue deduction adjustments in the current and prior year.
R&D update – key developments from the first quarter
New approvals
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Cosentyx (secukinumab) |
FDA approved Cosentyx for the treatment of moderate to severe hidradenitis suppurativa (HS) in pediatric patients aged 12 years and older, making it the only IL-17A inhibitor approved for this population. |
Regulatory updates
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Rhapsido (remibrutinib) |
EMA’s CHMP adopted a positive opinion recommending marketing authorization for remibrutinib as an oral treatment for chronic spontaneous urticaria (CSU) in adults with an inadequate response to H1-antihistamine therapy. |
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Ianalumab (VAY736) |
FDA granted Breakthrough Therapy designation and priority review to ianalumab for the treatment of Sjögren’s disease, following the first global Phase III trials to demonstrate a statistically significant reduction in disease activity.
Regulatory submissions were completed for ianalumab in the US, Europe, China and Japan. |
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Cosentyx (secukinumab) |
Regulatory submissions were completed for Cosentyx in polymyalgia rheumatica (PMR) in the US, Europe and Japan. |
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Pluvicto (lutetium Lu177 vipivotide tetraxetan) |
Novartis withdrew its EMA type II variation application for Pluvicto to treat adult patients with PSMA+ mCRPC pre-chemotherapy, following CHMP feedback that they would not support the application. The withdrawal is not related to the quality, efficacy or safety of Pluvicto and does not impact ongoing clinical trials, approved indications or pending regulatory submissions inside or outside the EU.
Importantly, the PSMAfore study, which supported the application, was the basis for the successful approval of Pluvicto in the pre-chemotherapy setting in the US, Japan and China. Pluvicto’s value in this population is also reflected in evidence-based recommendations from leading professional guidelines, including ESMO, EAU, ASCO and NCCN Guidelines. |
Results from ongoing trials and other highlights
| Remibrutinib |
Positive topline results from the pivotal Phase III RemIND trial showed oral remibrutinib met its primary endpoint in chronic inducible urticaria (CIndU), achieving statistically significant and clinically meaningful complete response rates versus placebo at Week 12 across the three most prevalent CIndU types: symptomatic |
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dermographism, cold urticaria and cholinergic urticaria. Remibrutinib was well tolerated and demonstrated a favorable safety profile, with no liver safety concerns reported. Based on these results, an sNDA for the treatment of symptomatic dermographism has been submitted to the FDA. Full data will be presented at an upcoming medical congress and submitted to health authorities globally.
In a Phase II study in adults with IgE-mediated peanut allergy, remibrutinib demonstrated superior efficacy versus placebo, with dose-dependent effects and a rapid onset of action, and was well tolerated. Data were presented at the AAAAI Annual Meeting. A Phase III program in food allergy is on track to start in H2 2026. | |
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Fabhalta (iptacopan) |
In the Phase III APPLAUSE-IgAN study, final two-year results published in The New England Journal of Medicine showed that Fabhalta slowed kidney function decline by 49.3% versus placebo and reduced the risk of composite kidney failure events in adult patients with IgA nephropathy (IgAN). The safety profile was consistent with previous findings. Fabhalta was granted priority review by FDA for traditional approval. |
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Vanrafia (atrasentan) |
Final results from the Phase III ALIGN study showed a slowing in kidney function decline in IgAN patients treated with Vanrafia, with a positive difference in eGFR change from baseline vs. placebo at Week 136 (4 weeks after the end of study treatment, p = 0.057) and at Week 132 (at the end of treatment, nominal p = 0.039). Safety was consistent with previous findings. Novartis plans to submit these data for traditional approval in H1 2026. |
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Pluvicto (lutetium Lu177 vipivotide tetraxetan) |
Real-world analyses from the Novartis PRECISION platform showed that Pluvicto achieved a median progression-free survival (PFS) of 13.5 months in men with PSMA+ mCRPC who were taxane-naïve and had received at least one androgen receptor pathway inhibitor (ARPI). Longer median PFS was observed when Pluvicto was initiated after one prior ARPI compared with use after multiple ARPIs. Data were presented at the ASCO-GU Symposium. |
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Cosentyx (secukinumab) |
In a matched adjusted indirect comparison analysis of efficacy and safety from Phase III trials in HS, including SUNSHINE and SUNRISE, Cosentyx showed greater flare prevention and a lower risk of Candida infections compared with bimekizumab through Week 48, while maintaining similar HiSCR50 responses. Data were presented at AAD. |
| Del-zota | One-year data from the Phase I/II EXPLORE44 and EXPLORE44-OLE studies evaluating del-zota in individuals with Duchenne muscular dystrophy amenable to exon 44 skipping (DMD44) showed sustained reductions in serum creatine kinase levels, significant increases in dystrophin, and improvements in multiple functional measures. Safety profile observed to date is consistent with earlier findings. Data were presented at MDA. |
| Del-desiran | Final results from the Phase I/II MARINA study of del-desiran in adults with myotonic dystrophy type 1 (DM1), published in The New England Journal of Medicine, showed effective delivery to muscle and a reduction in DMPK mRNA, and improvements across multiple functional measures. Safety profile observed to date is consistent with earlier findings. Del-desiran is currently being evaluated in the Phase III HARBOR study in DM1, with readout anticipated in H2 2026. |
Selected transactions |
Novartis successfully completed the acquisition of Avidity Biosciences, strengthening its late-stage neuroscience pipeline and advancing its xRNA strategy.
Novartis entered into an agreement with Synnovation Therapeutics to acquire SNV4818, a pan-mutant selective PI3Kα inhibitor currently in Phase I/II for patients with HR+/HER2- breast cancer and other advanced solid tumors. The program aligns |
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with Novartis’ strategy in breast cancer, and fits naturally alongside CDK inhibitors as well as endocrine (hormonal) therapies as part of a potential combination regimen. The transaction is expected to close in H1 2026, subject to customary closing conditions.
Novartis entered into an agreement to acquire Excellergy, including Exl-111, a half-life extended, high-affinity anti-IgE antibody in Phase I, with a differentiated mechanism designed to dissociate receptor-bound IgE and drive faster and deeper FcεRIα downregulation. This acquisition builds on deep Novartis expertise in IgE biology and allergic disease, with the potential to offer earlier symptom relief, stronger disease control and more convenient dosing. The transaction is expected to close in H2 2026, subject to customary closing conditions. |
Capital structure and net debt
Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority.
In Q1 2026, Novartis repurchased a total of 10.4 million shares for USD 1.6 billion on the SIX Swiss Exchange second trading line under the up-to USD 10 billion share buyback announced in July 2025 (with up to USD 6.1 billion still to be executed). In addition, 2.0 million shares (equity value of USD 0.3 billion) were repurchased from employees. In the same period, 12.3 million shares (equity value of USD 0.3 billion) were delivered to employees related to equity-based compensation plans. Novartis aims to offset the 2026 dilution related to equity-based compensation plans of employees over the remainder of the year, in addition to the share repurchases under the up-to USD 10 billion share buyback. Consequently, the total number of shares outstanding decreased by 0.1 million versus December 31, 2025. These treasury share transactions resulted in an equity decrease of USD 1.6 billion and a cash outflow of USD 1.9 billion.
Net debt increased to USD 38.1 billion at March 31, 2026, compared to USD 21.9 billion at December 31, 2025. The increase was mainly due to the free cash flow of USD 3.3 billion being more than offset by the net cash outflow for M&A and intangible asset transactions of USD 12.5 billion, the USD 6.2 billion annual net dividend payment in March (which is the gross dividend of USD 9.1 billion reduced by the USD 2.9 billion Swiss withholding tax paid in April 2026, according to its due date), and cash outflows for treasury share transactions of USD 1.9 billion.
As of Q1 2026, the long-term credit rating for the company is Aa3 with Moody’s Ratings and AA- with S&P Global Ratings.
2026 outlook
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Barring unforeseen events; growth vs. prior year in cc | |
| Net sales | Expected to grow low single-digit |
| Core operating income | Expected to decline low single-digit |
Foreign exchange impact
If late-April exchange rates prevail for the remainder of 2026, the foreign exchange impact for the year would be positive 2 percentage points on net sales and positive 1 percentage point on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.
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Key figures1
| Q1 2026 | Q1 2025 | % change | ||
| USD m2 | USD m2 | USD | cc | |
| Net sales | 13 113 | 13 233 | -1 | -5 |
| Operating income | 4 235 | 4 663 | -9 | -11 |
| As a % of sales | 32.3 | 35.2 | ||
| Net income | 3 156 | 3 609 | -13 | -13 |
| EPS (USD) | 1.65 | 1.83 | -10 | -11 |
| Net cash flows from operating activities | 3 676 | 3 645 | 1 | |
| Non-IFRS measures | ||||
| Free cash flow | 3 330 | 3 391 | -2 | |
| Core operating income | 4 897 | 5 575 | -12 | -14 |
| As a % of sales | 37.3 | 42.1 | ||
| Core net income | 3 794 | 4 482 | -15 | -17 |
| Core EPS (USD) | 1.99 | 2.28 | -13 | -15 |
1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 32 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. USD millions unless indicated otherwise.
Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below:
https://ml-eu.globenewswire.com/resource/download/7a686324-051d-4316-adeb-1161ff818fc8/
Disclaimer
This communication contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as “expected,” “anticipated,” “can,” “will,” “continue,” “ongoing,” “growth,” “launch,” “expanded,” “deliver,” “accelerate,” “guidance,” “outlook,” “priority,” “potential,” “momentum,” “on track,” “look forward,” or similar expressions, or by express or implied discussions regarding: potential new products, potential new indications for existing products, potential product launches or potential future revenues from any such products; or results of ongoing clinical trials; potential future, pending or announced transactions; potential future sales or earnings; strategy, plans, expectations or intentions, including discussions regarding our continued investment into new R&D capabilities and manufacturing; our capital structure. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that the investigational or approved products described in this communication will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Nor can there be any guarantee that such products will be commercially successful in the future. Neither can there be any guarantee that the expected benefits or synergies from the transactions described in this communication will be achieved in the expected timeframe, or at all. In particular, our expectations could be affected by, among other things, uncertainties concerning: global healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; the success of key products, commercial priorities and strategy; the research and development of new products, including clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products; our ability to realize the strategic benefits, operational efficiencies or opportunities expected from our external business opportunities; the development or adoption of new technologies, including artificial intelligence, and new business models; the implementation of our new IT projects and systems; potential significant breaches of information security or disruptions of our information technology systems; actual or potential legal proceedings, including regulatory actions or delays or government regulation related to the products and pipeline products described in this communication; safety, quality, data integrity, or manufacturing issues; our performance on and ability to comply with environmental, social and governance measures and requirements; major macroeconomic and geo- and socio-political developments, including the impact of any potential tariffs on our products or the impact of war
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in certain parts of the world; future global exchange rates; future demand for our products; and other risks and factors referred to in Novartis AG’s most recently filed Form 20-F and in subsequent reports filed with, or furnished to, the US Securities and Exchange Commission. Novartis is providing the information in this communication as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.
All product names appearing in italics are trademarks owned by or licensed to Novartis.
About Novartis
Novartis is an innovative medicines company. Every day, we work to reimagine medicine to improve and extend people’s lives so that patients, healthcare professionals and societies are empowered in the face of serious disease. Our medicines reach more than 300 million people worldwide.
Reimagine medicine with us: Visit us at https://www.novartis.com and connect with us on LinkedIn, Facebook, X/Twitter and Instagram.
Novartis will conduct a conference call with investors to discuss this news release today at 14:00 Central European time and 8:00 Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Novartis website. A replay will be available after the live webcast by visiting https://www.novartis.com/investors/event-calendar.
Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below. Additional information is provided on our business and pipeline of selected compounds in late-stage development. A copy of today's earnings call presentation can be found at https://www.novartis.com/investors/event-calendar.
Important dates
| July 21, 2026 | Second quarter & half year 2026 results | |
| October 27, 2026 | Third quarter & nine months 2026 results | |
| November 18-19, 2026 | Meet Novartis Management 2026 (London, UK) |
# # #
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Novartis Media Relations E-mail: media.relations@novartis.com
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Novartis Investor Relations Central investor relations line: +41 61 324 7944 E-mail: investor.relations@novartis.com
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Novartis First Quarter 2026 Condensed Interim Financial Report – Supplementary Data
INDEX
Page
OPERATING PERFORMANCE REVIEW
3
CASH FLOW AND BALANCE SHEET
9
INNOVATION REVIEW
12
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statements
14
Consolidated statements of comprehensive income
15
Consolidated balance sheets
16
Consolidated statements of changes in equity
17
Consolidated statements of cash flows
18
Notes to condensed interim consolidated financial statements
19
SUPPLEMENTARY INFORMATION
32
CORE RESULTS - Reconciliation from IFRS® Accounting Standards results to non-IFRS measure core results
34
NON-IFRS MEASURE FREE CASH FLOW
36
ADDITIONAL INFORMATION
Net debt
37
Share information
37
Effects of currency fluctuations
38
DISCLAIMER
39
2
Operating performance review
Key figures
First quarter
|
(USD millions unless indicated otherwise) |
Q1 2026
USD m |
Q1 2025
USD m |
% change
USD |
% change
cc 1 |
|||||
|
Net sales to third parties
|
13 113
|
13 233
|
-1
|
-5
|
|||||
|
Other revenues
|
411
|
387
|
6
|
5
|
|||||
|
Cost of goods sold
|
-3 459
|
-3 227
|
-7
|
-1
|
|||||
|
Gross profit
|
10 065
|
10 393
|
-3
|
-7
|
|||||
|
Selling, general and administration
|
-3 140
|
-3 058
|
-3
|
2
|
|||||
|
Research and development
|
-2 740
|
-2 366
|
-16
|
-9
|
|||||
|
Other income
|
478
|
226
|
112
|
94
|
|||||
|
Other expense
|
-428
|
-532
|
20
|
26
|
|||||
|
Operating income
|
4 235
|
4 663
|
-9
|
-11
|
|||||
|
% of net sales
|
32.3
|
35.2
|
|
|
|||||
|
Loss from associated companies
|
-3
|
-3
|
0
|
-2
|
|||||
|
Interest expense
|
-343
|
-270
|
-27
|
-27
|
|||||
|
Other financial income and expense
|
-50
|
17
|
nm
|
nm
|
|||||
|
Income before taxes
|
3 839
|
4 407
|
-13
|
-14
|
|||||
|
Income taxes
|
-683
|
-798
|
14
|
15
|
|||||
|
Net income
|
3 156
|
3 609
|
-13
|
-13
|
|||||
|
Basic earnings per share (USD)
|
1.65
|
1.83
|
-10
|
-11
|
|||||
|
Net cash flows from operating activities
|
3 676
|
3 645
|
1
|
|
|||||
|
|
|
|
|
||||||
|
Non-IFRS measures 1
|
|
|
|
|
|||||
|
Free cash flow
|
3 330
|
3 391
|
-2
|
|
|||||
|
Core operating income
|
4 897
|
5 575
|
-12
|
-14
|
|||||
|
% of net sales
|
37.3
|
42.1
|
|
|
|||||
|
Core net income
|
3 794
|
4 482
|
-15
|
-17
|
|||||
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Core basic earnings per share (USD)
|
1.99
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2.28
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-13
|
-15
|
|||||
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1 Constant currencies (cc), core results and free cash flow are non-IFRS measures. An
explanation of non-IFRS measures can be found on page 32. Unless otherwise noted,
all growth rates in this release refer to same period in prior-year.
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nm = not meaningful
|
|||||||||
3
Strategy
Our focus
Novartis is a “pure-play” innovative medicines company. We have a clear focus on four
core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and
oncology), with multiple significant in-market and pipeline assets in each of these
areas, that address high disease burden and have substantial growth potential. In
addition to two established technology platforms (chemistry and biotherapeutics),
three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing
scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan.
Our priorities
1. Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence,
with a rich pipeline across our core therapeutic areas.
2. Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis
remains disciplined and shareholder-focused in our approach to capital allocation,
with substantial cash generation and a strong capital structure supporting continued
flexibility.
3. Strengthen foundations: Unleashing the power of our people, scaling data science and technology and continuing
to build trust with society.
Financials
Net sales
Net sales were USD 13.1 billion (-1%, -5% cc), with volume contributing 13 percentage
points to growth, more than offset by 14 percentage points of generic competition.
Pricing had a negative impact of 4 percentage points, including net 1 percentage point
from revenue deduction adjustments in the US, and currency had a positive impact of
4 percentage points. By region, sales in the US were USD 5.0 billion (-13%) and sales
in the rest of the world were USD 8.2 billion (+8%, +1% cc).
Generic competition negatively impacted sales performance for Entresto (USD 1.3 billion, -42%, -46% cc), Promacta (USD 184 million, -66%, -68% cc) and Tasigna (USD 155 million, -59%, -61% cc), partly offset by continued strong growth from Kisqali (USD 1.5 billion, +59%, +55% cc), Pluvicto (USD 642 million, +73%, +70% cc), Kesimpta (USD 1.2 billion, +29%, +26% cc), Scemblix (USD 433 million, +82%, +79% cc) and Leqvio (USD 452 million, +76%, +69% cc).
In the US (USD 5.0 billion, -13%), the sales decline was due to generic competition,
mainly Entresto, Promacta and Tasigna, partly offset by strong growth from Kisqali, Pluvicto, Kesimpta and Scemblix. In Europe (USD 4.2 billion, +7%, -3% cc), sales increased in USD but declined in
cc, mainly due to generic competition, including Promacta and Xolair, offset by strong performance from Kisqali and Kesimpta. Sales in emerging growth markets were USD 3.9 billion (+8%, +3% cc), including USD
1.3 billion of sales from China (+13%, +8% cc).
Operating income
Gross profit was USD 10.1 billion (-3%, -7% cc), declining broadly in line with net
sales.
SG&A expenses were USD 3.1 billion (-3%, +2% cc)1, increasing in USD but decreasing in cc, mainly driven by marketing and sales productivity.
R&D expenses were USD 2.7 billion (-16%, -9% cc), mainly due to investments in recently
acquired assets.
Other income was USD 0.5 billion (+112%, +94% cc), increasing mainly driven by higher
divestment gains.
Other expense was USD 0.4 billion (+20%, +26% cc), decreasing mainly due to lower
restructuring costs and lower negative impact from revaluation of financial assets.
1 For ease of understanding, Novartis uses a sign convention for its growth rates such
that a reduction in operating expenses or losses compared with the prior year is shown
as a positive growth.
4
Operating income was USD 4.2 billion (-9%, -11% cc), declining due to lower net sales
and higher R&D investments, partly offset by higher divestment gains. Operating income
margin was 32.3% of net sales, decreasing 2.9 percentage points (2.1 percentage points
in cc).
Core adjustments were USD 0.7 billion, mainly due to amortization, compared with USD
0.9 billion in the prior-year quarter. Core adjustments decreased mainly due to higher
divestments gains.
Core gross profit was USD 10.8 billion (-3%, -6% cc), declining broadly in line with
net sales.
Core SG&A expenses were USD 3.1 billion (-3%, +2% cc), increasing in USD but decreasing
in cc, mainly driven by marketing and sales productivity.
Core R&D expenses were USD 2.7 billion (-17%, -11% cc), mainly due to investments
in recently acquired assets.
Core other income was USD 0.1 billion (+43%, +11% cc) and core other expense was USD
0.2 billion (+32%, +40% cc).
Core operating income was USD 4.9 billion (-12%, -14% cc), declining due to lower
net sales and higher R&D investments. Core operating income margin was 37.3% of net
sales, decreasing 4.8 percentage points (4.1 percentage points in cc).
Interest expense and other financial income and expense
Interest expense amounted to USD 343 million compared with USD 270 million in the
prior-year quarter, mainly due to the increase in financial debt.
Other financial income and expense amounted to an expense of USD 50 million compared
with an income of USD 17 million in the prior-year quarter, mainly due to higher monetary
losses from hyperinflation accounting.
Core interest expense amounted to USD 343 million compared with USD 270 million in
the prior-year quarter.
Core other financial income and expense amounted to an income of USD 4 million, broadly
in line with the prior-year quarter.
Income taxes
The tax rate in the first quarter was 17.8% compared to 18.1% in the prior-year quarter.
The prior-year tax rate was negatively impacted by the effect of remeasuring deferred
tax balances following a tax rate change in Switzerland, which was effective from
January 1, 2026, and prior-year items. Excluding these impacts, the prior-year tax
rate would have been 16.7%. The increase from the prior-year quarter was mainly the
result of a change in profit mix.
The core tax rate (core taxes as a percentage of core income before tax) was 16.7%
compared to 16.2% in the prior-year quarter. The increase from the prior year was
mainly the result of a change in profit mix.
Net income, EPS, cash flows from operating activities and free cash flow
Net income was USD 3.2 billion (-13%, -13% cc), mainly due to lower operating income.
EPS was USD 1.65 (-10%, -11% cc), due to lower net income, partly offset by the benefit
of the lower weighted average number of shares outstanding.
Core net income was USD 3.8 billion (-15%, -17% cc), mainly due to lower core operating
income. Core EPS was USD 1.99 (-13%, -15% cc), due to lower core net income, partly
offset by the benefit of the lower weighted average number of shares outstanding.
Net cash flows from operating activities amounted to USD 3.7 billion, in line with
the prior-year quarter, as lower net income, adjusted for non-cash items and other
adjustments, and higher income taxes paid were offset by favorable changes in working
capital.
Free cash flow amounted to USD 3.3 billion, broadly in line with the prior-year quarter.
5
Product commentary (relating to Q1 performance)
Cardiovascular, RENAL and METABOLIC
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc
|
||||||
|
Cardiovascular, renal and metabolic
|
|
|
|
|
|||||
|
Entresto
|
1 305
|
2 261
|
-42
|
-46
|
|||||
|
Leqvio
|
452
|
257
|
76
|
69
|
|||||
|
Vanrafia
|
16
|
|
nm
|
nm
|
|||||
|
Total cardiovascular, renal and metabolic
|
1 773
|
2 518
|
-30
|
-33
|
|||||
|
nm = not meaningful
|
|||||||||
Entresto (USD 1 305 million, -42%, -46% cc) sales declined due to generic competition in the
US. Entresto continued to grow ex-US, where the product is approved for heart failure globally
as well as hypertension in China and Japan.
Leqvio (USD 452 million, +76%, +69% cc) sales grew across all regions, with an acceleration
ex-US driven by China, following inclusion in the National Reimbursement Drug List
(NRDL) in January. Leqvio is registered in 108 countries worldwide and commercially available in 89 countries.
Novartis obtained global rights to develop, manufacture and commercialize Leqvio under a license and collaboration agreement with Alnylam Pharmaceuticals. Novartis
is in US ANDA litigation with a generic manufacturer.
Vanrafia (USD 16 million) sales reflect continued launch execution following 2025 approvals
in the US and China, as the first and only selective endothelin A (ETA) receptor antagonist
for proteinuria reduction in primary IgA nephropathy (IgAN).
Immunology
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc
|
||||||
|
Immunology
|
|
|
|
|
|||||
|
Cosentyx
|
1 566
|
1 534
|
2
|
-2
|
|||||
|
- excluding revenue deduction adjustments 1
|
|
|
5
|
2
|
|||||
|
Ilaris
|
475
|
419
|
13
|
10
|
|||||
|
Xolair 2
|
388
|
456
|
-15
|
-20
|
|||||
|
Rhapsido
|
37
|
|
nm
|
nm
|
|||||
|
Total immunology
|
2 466
|
2 409
|
2
|
-1
|
|||||
|
1 Q1 sales growth impacted by US revenue deduction adjustments in the current and prior
year.
|
|||||||||
|
2 Net sales to third parties reflect Xolair sales for all indications.
|
|||||||||
|
nm = not meaningful
|
|||||||||
Cosentyx (USD 1 566 million, +2%, -2% cc) sales were broadly stable. US sales declined, as
demand growth was offset by positive revenue deduction adjustments in the prior-year
quarter. Ex-US, sales grew in Europe and most emerging markets, partially offset by
a decline in China. Underlying sales growth globally was +2% cc.
Ilaris (USD 475 million, +13%, +10% cc) sales grew across most regions, with continued momentum
in the Periodic Fever Syndromes and Still’s disease indications.
Xolair (USD 388 million, -15%, -20% cc) sales declined in Europe and some emerging markets,
mainly driven by the launch of a biosimilar in 2025. Novartis co-promotes Xolair with Genentech in the US and shares a portion of revenue as operating income but
does not record any US sales.
Rhapsido (USD 37 million) continued to show strong early uptake in the US, supported by a free
drug program to facilitate patient access and increasing coverage. Rhapsido also launched in China following Q4 approval in CSU.
6
Neuroscience
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc
|
||||||
|
Neuroscience
|
|
|
|
|
|||||
|
Kesimpta
|
1 164
|
899
|
29
|
26
|
|||||
|
Zolgensma Group
|
302
|
327
|
-8
|
-12
|
|||||
|
Aimovig
|
95
|
76
|
25
|
14
|
|||||
|
Total neuroscience
|
1 561
|
1 302
|
20
|
16
|
|||||
Kesimpta (USD 1 164 million, +29%, +26% cc) sales grew across all regions, driven by increased
demand and strong access, as a high efficacy B-cell therapy with at-home self-administration
for a broad population of RMS patients. Kesimpta is now approved in 94 countries with more than 200,000 patients treated since launch.
Zolgensma Group (USD 302 million, -8%, -12% cc) sales declined, reflecting a lower incidence of SMA,
despite continued strong share in the incident population, as well as treatment phasing.
The intrathecal formulation is now approved in the US, UAE, Qatar and Japan, with
first patients treated in the UAE and US.
Aimovig (USD 95 million, +25%, +14% cc) sales grew driven by increased demand for migraine
prevention. Novartis commercializes Aimovig ex-US and ex-Japan, while Amgen retains all rights in the US and Japan.
ONCOLOGY
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc
|
||||||
|
Oncology
|
|
|
|
|
|||||
|
Kisqali
|
1 516
|
956
|
59
|
55
|
|||||
|
Pluvicto
|
642
|
371
|
73
|
70
|
|||||
|
Jakavi
|
557
|
492
|
13
|
5
|
|||||
|
Tafinlar + Mekinist 1
|
493
|
552
|
-11
|
-14
|
|||||
|
Scemblix
|
433
|
238
|
82
|
79
|
|||||
|
Lutathera
|
211
|
193
|
9
|
7
|
|||||
|
Fabhalta 2
|
169
|
81
|
109
|
103
|
|||||
|
Total oncology
|
4 021
|
2 883
|
39
|
35
|
|||||
|
1 Majority of sales for Mekinist and Tafinlar are combination, but both
can be used as monotherapy.
|
|||||||||
|
2 Net sales to third parties reflect Fabhalta sales for all indications.
|
|||||||||
Kisqali (USD 1 516 million, +59%, +55% cc) sales grew strongly across all regions, with continued
momentum in the early breast cancer indication as well as leadership in metastatic
breast cancer. Kisqali performance reflects its consistent overall survival benefit across all Phase III
mBC trials, its NCCN Category 1 Preferred status, and its highest ESMO clinical benefit
ratings in mBC and eBC.
Pluvicto (USD 642 million, +73%, +70% cc) sales showed continued strong demand in the pre-taxane
metastatic castration-resistant prostate cancer (mCRPC) setting in the US. Access
ex-US continued to expand, with the post-taxane mCRPC setting now approved in 51 countries
and the pre-taxane setting approved in 9 countries.
Jakavi (USD 557 million, +13%, +5% cc) sales grew across most regions and indications. Incyte
retains all rights to ruxolitinib (Jakafi®) in the US.
Tafinlar + Mekinist (USD 493 million, -11%, -14% cc) sales declined in the US due to competitive pressure
and ex-US mainly due to shipment phasing. Novartis is in US ANDA litigations with
a generic manufacturer.
Scemblix (USD 433 million, +82%, +79% cc) sales grew across all regions, with continued momentum
in the early line setting, where 64 markets have secured approvals, including EU in
Q4 2025.
Lutathera (USD 211 million, +9%, +7% cc) sales grew mainly in the US and Europe due to increased
demand, with continued 2L leadership. Novartis is in patent litigation with manufacturers
having FDA applications referencing Lutathera.
Fabhalta (USD 169 million, +109%, +103% cc) sales more than doubled in Q1, reflecting continued
expansion in PNH and renal indications.
7
Established BRANDS
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc
|
||||||
|
Established brands
|
|
|
|
|
|||||
|
Sandostatin Group
|
287
|
317
|
-9
|
-12
|
|||||
|
Exforge Group
|
203
|
179
|
13
|
7
|
|||||
|
Promacta/Revolade
|
184
|
546
|
-66
|
-68
|
|||||
|
Tasigna
|
155
|
377
|
-59
|
-61
|
|||||
|
Diovan Group
|
150
|
150
|
0
|
-4
|
|||||
|
Myfortic
|
111
|
99
|
12
|
9
|
|||||
|
Lucentis
|
104
|
189
|
-45
|
-50
|
|||||
|
Piqray/Vijoice
|
81
|
100
|
-19
|
-20
|
|||||
|
Kymriah
|
81
|
100
|
-19
|
-22
|
|||||
|
Contract manufacturing
|
352
|
343
|
3
|
-5
|
|||||
|
Other
|
1 584
|
1 721
|
-8
|
-13
|
|||||
|
Total established brands
|
3 292
|
4 121
|
-20
|
-24
|
|||||
Sandostatin Group (USD 287 million, -9%, -12% cc) sales declined due to generic competition.
Exforge Group (USD 203 million, +13%, +7% cc) sales grew, driven by China.
Promacta/Revolade (USD 184 million, -66%, -68% cc) sales continued to decline globally due to generic
competition.
Tasigna (USD 155 million, -59%, -61% cc) sales continued to decline globally due to generic
competition.
Diovan Group (USD 150 million, 0%, -4% cc) sales declined in most regions except Europe.
Myfortic (USD 111 million, +12%, +9% cc) sales grew, driven by China and other emerging markets.
Lucentis (USD 104 million, –45%, –50% cc) sales declined, mainly due to increased competition. Novartis only commercializes
Lucentis in markets ex-US.
Piqray/Vijoice (USD 81 million, -19%, -20% cc) sales declined, driven by increased competition for
Piqray.
Kymriah (USD 81 million, –19%, –22% cc) sales declined globally, mainly due to continued competitive pressure.
8
Cash Flow and Balance Sheet
Cash flow
First quarter
Net cash flows from operating activities amounted to USD 3.7 billion, in line with
the prior-year quarter, as lower net income, adjusted for non-cash items and other
adjustments, and higher income taxes paid were offset by favorable changes in working
capital.
Net cash outflows used in investing activities amounted to USD 11.7 billion, compared
with USD 0.3 billion net cash inflows in the prior-year quarter.
In the current-year quarter, net cash outflows for investing activities were mainly
driven by USD 12.0 billion paid for the acquisition of Avidity Biosciences, Inc. (net
of cash acquired of USD 11 million). In addition, cash outflows for purchases of intangible
assets amounted to USD 0.5 billion and purchases of property, plant and equipment
amounted to USD 0.3 billion. These cash outflows were partly offset by proceeds of
USD 1.1 billion from time deposits and from the sale of marketable securities, mainly
acquired through the Avidity Biosciences, Inc. acquisition.
In the prior-year quarter, net cash inflows from investing activities were mainly
driven by the net proceeds of USD 1.8 billion from marketable securities and time
deposits, mainly due to the maturity of time deposits. These cash inflows were partly
offset by cash outflows of USD 1.2 billion for purchases of intangible assets and
by USD 0.3 billion for purchases of property, plant and equipment.
Net cash inflows from financing activities amounted to USD 3.6 billion, compared with
USD 8.5 billion net cash outflows in the prior-year quarter.
In the current-year quarter, net cash inflows from financing activities were mainly
driven by cash inflows of USD 10.9 billion from the issuance of US dollar denominated
bonds with a notional amount of USD 11.0 billion, which were used to repay a bridge
loan of USD 11.0 billion entered into in February 2026 to fund the Avidity Biosciences,
Inc. acquisition. In addition, changes in current financial debts resulted in net cash inflows of USD
0.7 billion. These inflows were partly offset by USD 6.2 billion for the annual net
dividend payment (which is the gross dividend of USD 9.1 billion reduced by the USD
2.9 billion Swiss withholding tax paid in April 2026, according to its due date) and
USD 1.9 billion for treasury share transactions.
In the prior-year quarter, net cash outflows used in financing activities were mainly
driven by USD 5.3 billion for the annual net dividend payment (which is the gross
dividend of USD 7.8 billion reduced by the USD 2.5 billion Swiss withholding tax paid
in April 2025 according to its due date), the USD 2.7 billion payments for treasury
share transactions, and the USD 1.0 billion repayment of a US dollar denominated bond
at maturity. These cash outflows were partly offset by the net increase in current
financial debts of USD 0.6 billion.
Free cash flow amounted to USD 3.3 billion, broadly in line with the prior-year quarter.
9
Balance sheet
Assets
Total non-current assets of USD 91.9 billion increased by USD 11.4 billion compared with December 31, 2025.
Intangible assets other than goodwill increased by USD 10.8 billion, mainly due to
the Avidity Biosciences, Inc. acquisition and additions, partially offset by amortization.
Goodwill increased by USD 1.3 billion mainly due to the acquisition of Avidity Biosciences,
Inc.
Other non-current assets decreased by USD 0.3 billion, mainly due to the decrease
in prepaid post-employment benefit plans.
Property, plant and equipment, right-of-use assets, deferred tax assets, investments
in associated companies, and financial assets were broadly in line with December 31,
2025.
Total current assets of USD 26.6 billion decreased by USD 3.9 billion compared with December 31, 2025.
Cash and cash equivalents decreased by USD 4.6 billion compared with December 31, 2025.
Net cash inflows from operating activities of USD 3.7 billion, net proceeds of USD
11.6 billion from financial debts and net proceeds of USD 1.1 billion from the sale
of marketable securities and time deposits, were more than offset by cash outflows
mainly relating to the acquisition of Avidity Biosciences, Inc. of USD 12.0 billion,
the annual net dividend payment of USD 6.2 billion (which is the gross dividend of
USD 9.1 billion reduced by the USD 2.9 billion Swiss withholding tax paid in April 2026,
according to its due date), the purchase of treasury shares of USD 1.9 billion, as
well as other net cash outflows from investing and financing activities, and currency
effects of USD 0.9 billion.
Trade receivables increased by USD 0.4 billion and other current assets increased
by USD 0.3 billion. Inventories, marketable securities, time deposits and derivative
financial instruments, and income tax receivables were broadly in line with December
31, 2025.
Liabilities
Total non-current liabilities of USD 48.2 billion increased by USD 11.1 billion compared with December 31, 2025.
Non-current financial debts increased by USD 9.5 billion, mainly due to the issuance
of US dollar denominated bonds with a notional amount of USD 11.0 billion, partly
offset by the reclassification from non-current to current financial debts of a US
dollar denominated bond with a notional amount of USD 1.3 billion maturing in February
2027.
Deferred tax liabilities increased by USD 1.7 billion mainly due to the acquisition
of Avidity Biosciences, Inc.
Provisions and other non-current liabilities and non-current lease liabilities were
broadly in line with December 31, 2025.
Total current liabilities of USD 31.4 billion increased by USD 4.1 billion compared with December 31, 2025.
Current financial debts and derivative financial instruments increased by USD 2.0
billion compared with December 31, 2025, mainly due to the reclassification from non-current
to current financial debts of a US dollar denominated bond with a notional amount
of USD 1.3 billion maturing in February 2027, and the issuance of commercial paper
notes of USD 0.7 billion, mainly under the US commercial paper program.
Provisions and other current liabilities increased by USD 2.4 billion, mainly driven
by USD 2.9 billion of Swiss withholding tax on the annual dividend to Novartis AG
shareholders, which was paid in April 2026 according to its due date, and by an increase
of USD 0.5 billion in provisions for revenue deductions, partially offset by a decrease
of USD 0.8 billion in accruals for compensation and benefits.
Trade payables, current income tax liabilities and current lease liabilities were
broadly in line with December 31, 2025.
10
Equity
The Company’s equity decreased by USD 7.6 billion to USD 38.9 billion compared with
December 31, 2025. This decrease was mainly driven by the net income of USD 3.2 billion,
more than offset by the annual gross dividend to Novartis AG shareholders of USD 9.1
billion, and the purchase of treasury shares of USD 1.9 billion.
Net debt and debt/equity ratio
The Company’s liquidity amounted to USD 7.0 billion as at March 31, 2026, compared
with USD 11.6 billion as at December 31, 2025. Total non-current and current financial
debts, including derivatives, amounted to USD 45.1 billion as at March 31, 2026, compared
with USD 33.5 billion as at December 31, 2025.
The debt/equity ratio increased to 1.16:1 as at March 31, 2026, compared with 0.72:1
as at December 31, 2025. The net debt increased to USD 38.1 billion as at March 31,
2026, compared with USD 21.9 billion as at December 31, 2025.
11
Innovation Review
Novartis continues to focus its R&D portfolio prioritizing high value medicines with
transformative potential for patients. We now focus on ~100 projects in clinical development.
Selected innovative medicines approvals in Q1
|
Product |
Active ingredient/
Descriptor |
Indication |
Region |
|||||
|
Cosentyx
|
secukinumab
|
Hidradenitis suppurativa, pediatrics
aged 12+ |
US
|
|||||
|
Leqvio
|
inclisiran
|
Hypercholesterolaemia, pediatrics
|
US
|
|||||
|
Zolgensma
|
OAV101
|
Spinal muscular atrophy (IT formulation)
|
JP
|
|||||
Selected innovative medicines projects awaiting regulatory decisions
|
|
Completed submissions
|
|
|||||||||
|
Product
|
Indication
|
US
|
EU
|
Japan
|
News update
|
||||||
|
Cosentyx
|
Polymyalgia rheumatica
|
Q1 2026
|
Q1 2026
|
Q1 2026
|
– US, EU & JP submissions
|
||||||
|
Hidradenitis suppurativa,
pediatrics aged 12+ |
Approved
|
Q1 2026
|
|
– US approval
– EU submission |
|||||||
|
Fabhalta
|
IgA nephropathy
|
|
|
Q1 2026
|
– JP submission
– Final two-year results from PhIII APPLAUSE-IgAN study published in NEJM – FDA granted priority review for traditional approval |
||||||
|
VAY736
(ianalumab) |
Sjögren’s disease
|
Q1 2026
|
Q1 2026
|
Q1 2026
|
– US, EU, JP & CN submissions
– FDA Breakthrough Therapy designation – FDA Priority Review designation – Japan Orphan Drug designation |
||||||
|
Leqvio
|
Hypercholesterolaemia, pediatrics
|
Approved
|
Q3 2025
|
|
– US approval
|
||||||
|
OAV101
|
Spinal muscular atrophy (IT
formulation) |
Approved
|
Q2 2025
|
Approved
|
– JP approval
|
||||||
|
Pluvicto
|
Metastatic castration-resistant
prostate cancer pre-taxane |
Approved
|
Withdrawn
|
Approved
|
– Withdrew EU type II variation application
following CHMP feedback on trial design (not related to product quality, efficacy or safety) |
||||||
|
Metastatic hormone sensitive
prostate cancer |
Q4 2025
|
|
Q4 2025
|
|
|||||||
|
Rhapsido
(remibrutinib) |
Chronic spontaneous urticaria
|
Approved
|
Q1 2025
|
Q2 2025
|
– Received positive EMA CHMP opinion
|
||||||
|
Chronic inducible urticaria
|
Q4 2025
|
|
|
– US submission for symptomatic
dermograpahism subtype in Q4 2025 – Primary endpoint met for cold and cholinergic urticaria subtypes (RemIND) |
|||||||
Selected innovative medicines pipeline projects
|
Compound/
product |
Potential indication/
Disease area |
First planned
submissions |
Current
Phase |
News update |
|||||
|
225Ac-PSMA-617
|
post Lu metastatic castration-resistant
prostate cancer |
2028
|
3
|
|
|||||
|
Metastatic castration-resistant prostate
cancer 1L |
≥2029
|
3
|
|
||||||
|
Aimovig
|
Migraine, pediatrics
|
2028
|
3
|
|
|||||
|
DAK539
(pelabresib) |
Myelofibrosis
|
2026
|
3
|
|
|||||
|
DII235
|
CVRR-Lp(a)
|
≥2029
|
2
|
|
|||||
|
DWH213
(del-brax) |
Facioscapulohumeral muscular dystrophy
|
2028
|
3
|
– Avidity acquisition completed
|
|||||
|
EWF980
(del-desiran) |
Myotonic dystrophy type 1
|
2027
|
3
|
– Avidity acquisition completed
– PhI/II MARINA study results published in NEJM |
|||||
|
FUB523
(zigakibart) |
IgA nephropathy
|
2027
|
3
|
|
|||||
|
GHZ339
|
Atopic dermatitis
|
≥2029
|
2
|
|
|||||
12
|
Compound/
product |
Potential indication/
Disease area |
First planned
submissions |
Current
Phase |
News update |
|||||
|
GIA632
|
Atopic dermatitis
|
≥2029
|
2
|
|
|||||
|
Vitiligo
|
≥2029
|
2
|
– PhII achieved FPFV
|
||||||
|
JSB462
|
Prostate cancer
|
≥2029
|
2
|
|
|||||
|
KAE609
|
Malaria, uncomplicated
|
≥2029
|
2
|
||||||
|
(cipargamin)
|
Malaria, severe
|
≥2029
|
2
|
|
|||||
|
Kesimpta
|
Multiple sclerosis
new dosing regimen |
2027
|
3
|
|
|||||
|
KLU156
(ganaplacide + lumefantrine) |
Malaria, uncomplicated
|
2026
|
3
|
|
|||||
|
KPE179
(del-zota) |
Duchenne muscular dystrophy
|
2026
|
2
|
– Avidity acquisition completed
– One-year data from PhI/II studies presented at MDA |
|||||
|
Leqvio
|
Secondary prevention of cardiovascular
events in patients with elevated LDL-C |
2027
|
3
|
|
|||||
|
Primary prevention CVRR
|
≥2029
|
3
|
|
||||||
|
LNP023
|
Myasthenia gravis
|
2027
|
3
|
|
|||||
|
(iptacopan)
|
IC-MPGN
|
≥2029
|
3
|
|
|||||
|
Atypical haemolytic uraemic syndrome
|
≥2029
|
3
|
|
||||||
|
LOU064
(remibrutinib) |
Food allergy
|
≥2029
|
2
|
– PhII data presented at AAAAI Annual Meeting
|
|||||
|
Hidradenitis suppurativa
|
2027
|
3
|
– Accelerated submission timing from 2028
|
||||||
|
Multiple sclerosis, relapsing
|
2027
|
3
|
|
||||||
|
Multiple sclerosis, secondary progressive
|
≥2029
|
3
|
|
||||||
|
Myasthenia gravis
|
2028
|
3
|
|
||||||
|
LTP001
|
Pulmonary arterial hypertension
|
≥2029
|
2
|
|
|||||
|
Lutathera
|
GEP-NETs
|
2028
|
3
|
|
|||||
|
177Lu-NeoB
|
Multiple solid tumors
|
≥2029
|
2
|
|
|||||
|
LXE408
|
Visceral leishmaniasis
|
≥2029
|
2
|
|
|||||
|
MAA868
(abelacimab) |
Atrial fibrillation
|
2028
|
3
|
|
|||||
|
PAC001
(pacibekitug) |
ASCVD
|
≥2029
|
2
|
|
|||||
|
Pluvicto
|
Oligometastatic prostate cancer
|
≥2029
|
3
|
|
|||||
|
QCZ484
|
Hypertension
|
≥2029
|
2
|
|
|||||
|
TQJ230
(pelacarsen) |
Secondary prevention of cardiovascular
events in patients with elevated levels of lipoprotein(a) |
2026
|
3
|
|
|||||
|
VAY736
(ianalumab) |
Lupus nephritis
|
2028
|
3
|
|
|||||
|
Systemic lupus erythematosus
|
2028
|
3
|
|
||||||
|
Systemic sclerosis
|
2028
|
2
|
|
||||||
|
1L immune thrombocytopenia
|
2027
|
3
|
|
||||||
|
2L immune thrombocytopenia
|
2027
|
3
|
|
||||||
|
Warm autoimmune hemolytic anemia
|
2027
|
3
|
– PhIII trial (VAYHIA) did not meet primary
endpoint in April – While not statistically significant, ianalumab showed numerical improvements vs placebo – Safety profile of ianalumab was consistent with prior clinical studies |
||||||
|
VHB937
|
Alzheimer's disease
|
≥2029
|
2
|
|
|||||
|
Amyotrophic lateral sclerosis
|
≥2029
|
2
|
|
||||||
|
Vijoice
|
Lymphatic malformations
|
≥2029
|
3
|
|
|||||
|
Votoplam
|
Huntington's disease
|
≥2029
|
3
|
– PhIII trial (INVEST-HD) achieved FPFV
|
|||||
|
YTB323
|
Active refractory lupus nephritis
|
2028
|
2
|
|
|||||
|
Active refractory systemic lupus erythematosus
|
2028
|
2
|
|
||||||
|
1L high-risk large B-cell lymphoma
|
≥2029
|
2
|
|
||||||
|
Systemic sclerosis
|
≥2029
|
2
|
|
||||||
|
Myositis
|
≥2029
|
2
|
– EMA Priority Medicines (PRIME) designation
in April |
||||||
|
ANCA associated vasculitis
|
≥2029
|
2
|
|
||||||
13
Condensed Interim Consolidated Financial Statements
Consolidated income statements
First quarter (unaudited)
|
(USD millions unless indicated otherwise)
|
Note
|
Q1 2026
|
Q1 2025
|
||||
|
Net sales to third parties
|
9
|
13 113
|
13 233
|
||||
|
Other revenues
|
9
|
411
|
387
|
||||
|
Cost of goods sold
|
|
-3 459
|
-3 227
|
||||
|
Gross profit
|
|
10 065
|
10 393
|
||||
|
Selling, general and administration
|
|
-3 140
|
-3 058
|
||||
|
Research and development
|
|
-2 740
|
-2 366
|
||||
|
Other income
|
|
478
|
226
|
||||
|
Other expense
|
|
-428
|
-532
|
||||
|
Operating income
|
|
4 235
|
4 663
|
||||
|
Loss from associated companies
|
|
-3
|
-3
|
||||
|
Interest expense
|
|
-343
|
-270
|
||||
|
Other financial income and expense
|
|
-50
|
17
|
||||
|
Income before taxes
|
|
3 839
|
4 407
|
||||
|
Income taxes
|
|
-683
|
-798
|
||||
|
Net income
|
|
3 156
|
3 609
|
||||
|
Attributable to:
|
|
|
|
||||
|
Shareholders of Novartis AG
|
|
3 156
|
3 606
|
||||
|
Non-controlling interests
|
|
0
|
3
|
||||
|
|
|
|
|||||
|
Weighted average number of shares outstanding – Basic (million)
|
|
1 909
|
1 968
|
||||
|
Basic earnings per share (USD) 1
|
|
1.65
|
1.83
|
||||
|
|
|
|
|||||
|
Weighted average number of shares outstanding – Diluted (million)
|
|
1 916
|
1 979
|
||||
|
Diluted earnings per share (USD) 1
|
|
1.65
|
1.82
|
||||
|
1 Earnings per share (EPS) is calculated on the amount of net income attributable to
shareholders of Novartis AG.
|
|||||||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||||
14
Consolidated statements of comprehensive income
First quarter (unaudited)
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Net income
|
3 156
|
3 609
|
|||
|
|
|
||||
|
Other comprehensive income
|
|
|
|||
|
Items that are or may be recycled into the consolidated income statement
|
|
|
|||
|
Cash flow hedge, net of taxes
|
22
|
1
|
|||
|
Net investment hedge, net of taxes
|
68
|
-60
|
|||
|
Currency translation effects, net of taxes
|
-129
|
720
|
|||
|
Total of items that are or may be recycled
|
-39
|
661
|
|||
|
|
|
||||
|
Items that will never be recycled into the consolidated income statement
|
|
|
|||
|
Actuarial (losses)/gains from defined benefit plans, net of taxes
|
-252
|
436
|
|||
|
Fair value adjustments on equity securities, net of taxes
|
129
|
-56
|
|||
|
Total of items that will never be recycled
|
-123
|
380
|
|||
|
|
|
||||
|
Total other comprehensive income
|
-162
|
1 041
|
|||
|
|
|
||||
|
Total comprehensive income
|
2 994
|
4 650
|
|||
|
Total comprehensive income for the period attributable to:
|
|
|
|||
|
Shareholders of Novartis AG
|
2 998
|
4 646
|
|||
|
Non-controlling interests
|
-4
|
4
|
|||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||
15
Consolidated balance sheets
|
(USD millions) |
Mar 31,
2026 (unaudited) |
Dec 31,
2025 (audited) |
|||
|
Assets
|
|
|
|||
|
Non-current assets
|
|
|
|||
|
Property, plant and equipment
|
10 654
|
10 782
|
|||
|
Right-of-use assets
|
1 584
|
1 570
|
|||
|
Goodwill
|
26 819
|
25 567
|
|||
|
Intangible assets other than goodwill
|
40 209
|
29 411
|
|||
|
Investments in associated companies
|
100
|
98
|
|||
|
Deferred tax assets
|
5 247
|
5 438
|
|||
|
Financial assets
|
2 331
|
2 348
|
|||
|
Other non-current assets
|
4 981
|
5 275
|
|||
|
Total non-current assets
|
91 925
|
80 489
|
|||
|
Current assets
|
|
|
|||
|
Inventories
|
6 286
|
6 269
|
|||
|
Trade receivables
|
9 386
|
8 937
|
|||
|
Income tax receivables
|
216
|
205
|
|||
|
Marketable securities, time deposits and derivative financial instruments
|
100
|
155
|
|||
|
Cash and cash equivalents
|
6 877
|
11 435
|
|||
|
Other current assets
|
3 742
|
3 459
|
|||
|
Total current assets
|
26 607
|
30 460
|
|||
|
Total assets
|
118 532
|
110 949
|
|||
|
|
|
||||
|
Equity and liabilities
|
|
|
|||
|
Equity
|
|
|
|||
|
Share capital
|
736
|
766
|
|||
|
Treasury shares
|
-47
|
-50
|
|||
|
Reserves
|
37 823
|
45 414
|
|||
|
Equity attributable to Novartis AG shareholders
|
38 512
|
46 130
|
|||
|
Non-controlling interests
|
415
|
419
|
|||
|
Total equity
|
38 927
|
46 549
|
|||
|
Liabilities
|
|
|
|||
|
Non-current liabilities
|
|
|
|||
|
Financial debts
|
37 447
|
27 935
|
|||
|
Lease liabilities
|
1 663
|
1 657
|
|||
|
Deferred tax liabilities
|
5 104
|
3 397
|
|||
|
Provisions and other non-current liabilities
|
4 017
|
4 133
|
|||
|
Total non-current liabilities
|
48 231
|
37 122
|
|||
|
Current liabilities
|
|
|
|||
|
Trade payables
|
4 322
|
4 456
|
|||
|
Financial debts and derivative financial instruments
|
7 617
|
5 602
|
|||
|
Lease liabilities
|
271
|
263
|
|||
|
Current income tax liabilities
|
1 807
|
1 969
|
|||
|
Provisions and other current liabilities
|
17 357
|
14 988
|
|||
|
Total current liabilities
|
31 374
|
27 278
|
|||
|
Total liabilities
|
79 605
|
64 400
|
|||
|
Total equity and liabilities
|
118 532
|
110 949
|
|||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||
16
Consolidated statements of changes in equity
First quarter (unaudited)
|
|
|
|
Reserves
|
|
|
|
|||||||||||
|
(USD millions) |
Note |
Share capital |
Treasury shares |
Retained earnings |
Total value adjustments |
Equity
attributable to Novartis AG shareholders |
Non- controlling interests |
Total equity |
|||||||||
|
Total equity at January 1, 2026
|
|
766
|
-50
|
44 720
|
694
|
46 130
|
419
|
46 549
|
|||||||||
|
Net income
|
|
|
|
3 156
|
|
3 156
|
0
|
3 156
|
|||||||||
|
Other comprehensive income
|
|
|
|
|
-158
|
-158
|
-4
|
-162
|
|||||||||
|
Total comprehensive income
|
|
|
|
3 156
|
-158
|
2 998
|
-4
|
2 994
|
|||||||||
|
Dividends
|
4.1
|
|
|
-9 068
|
|
-9 068
|
|
-9 068
|
|||||||||
|
Purchase of treasury shares
|
|
|
-5
|
-1 884
|
|
-1 889
|
|
-1 889
|
|||||||||
|
Reduction of share capital
|
|
-30
|
30
|
|
|
|
|
|
|||||||||
|
Equity-based compensation plans
|
|
|
4
|
293
|
|
297
|
|
297
|
|||||||||
|
Taxes on treasury share transactions
|
|
|
|
-21
|
|
-21
|
|
-21
|
|||||||||
|
Value adjustments related to financial assets sold and divestments
|
|
|
|
-35
|
35
|
|
|
|
|||||||||
|
Other movements
|
4.3
|
|
-26
|
91
|
|
65
|
|
65
|
|||||||||
|
Total of other equity movements
|
|
-30
|
3
|
-10 624
|
35
|
-10 616
|
|
-10 616
|
|||||||||
|
Total equity at March 31, 2026
|
|
736
|
-47
|
37 252
|
571
|
38 512
|
415
|
38 927
|
|||||||||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||||||||||||||
|
|
|
|
Reserves
|
|
|
|
|||||||||||
|
(USD millions) |
Note |
Share capital |
Treasury shares |
Retained earnings |
Total value adjustments |
Equity
attributable to Novartis AG shareholders |
Non- controlling interests |
Total equity |
|||||||||
|
Total equity at January 1, 2025
|
|
793
|
-53
|
46 561
|
-3 255
|
44 046
|
80
|
44 126
|
|||||||||
|
Net income
|
|
|
|
3 606
|
|
3 606
|
3
|
3 609
|
|||||||||
|
Other comprehensive income
|
|
|
|
|
1 040
|
1 040
|
1
|
1 041
|
|||||||||
|
Total comprehensive income
|
|
|
|
3 606
|
1 040
|
4 646
|
4
|
4 650
|
|||||||||
|
Dividends
|
4.1
|
|
|
-7 818
|
|
-7 818
|
|
-7 818
|
|||||||||
|
Purchase of treasury shares
|
|
|
-14
|
-2 778
|
|
-2 792
|
|
-2 792
|
|||||||||
|
Reduction of share capital
|
|
-27
|
42
|
-15
|
|
|
|
|
|||||||||
|
Equity-based compensation plans
|
|
|
6
|
267
|
|
273
|
|
273
|
|||||||||
|
Taxes on treasury share transactions
|
|
|
|
-31
|
|
-31
|
|
-31
|
|||||||||
|
Changes in non-controlling interests
|
|
|
|
1
|
|
1
|
-1
|
|
|||||||||
|
Value adjustments related to financial assets sold and divestments
|
|
|
|
2
|
-2
|
|
|
|
|||||||||
|
Other movements
|
4.3
|
|
|
44
|
|
44
|
|
44
|
|||||||||
|
Total of other equity movements
|
|
-27
|
34
|
-10 328
|
-2
|
-10 323
|
-1
|
-10 324
|
|||||||||
|
Total equity at March 31, 2025
|
|
766
|
-19
|
39 839
|
-2 217
|
38 369
|
83
|
38 452
|
|||||||||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||||||||||||||
17
Consolidated statements of cash flows
First quarter (unaudited)
|
(USD millions)
|
Note
|
Q1 2026
|
Q1 2025
|
||||
|
Net income
|
|
3 156
|
3 609
|
||||
|
Adjustments to reconcile net income to net cash flows from operating activities
|
|
|
|
||||
|
Reversal of non-cash items and other adjustments
|
6.1
|
2 491
|
2 712
|
||||
|
Interest received
|
|
83
|
122
|
||||
|
Interest paid
|
|
-201
|
-232
|
||||
|
Other financial payments
|
|
-12
|
-21
|
||||
|
Income taxes paid
|
|
-787
|
-540
|
||||
|
Net cash flows from operating activities before working capital and provision changes
|
|
4 730
|
5 650
|
||||
|
Payments out of provisions and other net cash movements in non-current liabilities
|
|
-267
|
-237
|
||||
|
Changes in working capital and other operating cash flow items
|
6.2
|
-787
|
-1 768
|
||||
|
Net cash flows from operating activities
|
|
3 676
|
3 645
|
||||
|
Purchases of property, plant and equipment
|
|
-346
|
-254
|
||||
|
Proceeds from sale of property, plant and equipment
|
|
5
|
10
|
||||
|
Purchases of intangible assets
|
|
-461
|
-1 240
|
||||
|
Purchases of financial assets
|
|
-24
|
-18
|
||||
|
Proceeds from sale of financial assets
|
|
37
|
25
|
||||
|
Acquisitions of businesses
|
6.3
|
-12 041
|
|
||||
|
Divestments of businesses, net
|
6.4
|
-2
|
-4
|
||||
|
Investments in time deposits and marketable securities
|
|
-30
|
-37
|
||||
|
Proceeds from time deposits and from sale of marketable securities
|
|
1 129
|
1 851
|
||||
|
Other investing cash flows, net
|
|
-3
|
-3
|
||||
|
Net cash flows (used in)/from investing activities
|
|
-11 736
|
330
|
||||
|
Dividends paid to shareholders of Novartis AG
|
4.1
|
-6 197
|
-5 333
|
||||
|
Purchases of treasury shares
|
|
-1 875
|
-2 716
|
||||
|
Proceeds from exercised options and other treasury share transactions, net
|
|
|
1
|
||||
|
Proceeds from non-current financial debts
|
10
|
10 918
|
|
||||
|
Repayments of the current portion of non-current financial debts
|
|
-19
|
-1 010
|
||||
|
Change in current financial debts
|
10
|
747
|
556
|
||||
|
Payments of lease liabilities
|
|
-73
|
-69
|
||||
|
Other financing cash flows, net
|
|
78
|
23
|
||||
|
Net cash flows from/(used in) financing activities
|
|
3 579
|
-8 548
|
||||
|
Net change in cash and cash equivalents before effect of exchange rate changes
|
|
-4 481
|
-4 573
|
||||
|
Effect of exchange rate changes on cash and cash equivalents
|
|
-77
|
180
|
||||
|
Net change in cash and cash equivalents
|
|
-4 558
|
-4 393
|
||||
|
Cash and cash equivalents at January 1
|
|
11 435
|
11 459
|
||||
|
Cash and cash equivalents at March 31
|
|
6 877
|
7 066
|
||||
|
The accompanying Notes form an integral part of the condensed interim consolidated
financial statements
|
|||||||
18
Notes to the Condensed Interim Consolidated Financial Statements for the three month period ended March 31, 2026 (unaudited)
1. Basis of preparation
The consolidated financial statements of the Company are prepared in accordance with
International Financial Reporting Standards (IFRS®) Accounting Standards as issued by the International Accounting Standards Board.
They are prepared in accordance with the historical cost convention, except for items
that are required to be accounted for at fair value.
These Condensed Interim Consolidated Financial Statements for the three month period
ended March 31, 2026, were prepared in accordance with International Accounting Standards
(IAS®) Standards 34 Interim Financial Reporting and accounting policies set out in
the 2025 Annual Report published on February 4, 2026.
2. Accounting policies
The Company’s accounting policies are set out in Note 1 to the Consolidated Financial
Statements in the 2025 Annual Report and conform with IFRS Accounting Standards as
issued by the International Accounting Standards Board.
The preparation of financial statements requires management to make certain estimates
and assumptions, either at the balance sheet date or during the period, which affect
the reported amounts of revenues, expenses, assets, liabilities, and contingent amounts.
Estimates are based on historical experience and other assumptions that are considered
reasonable under the given circumstances and are regularly monitored. Actual outcomes
and results could differ from those estimates and assumptions. Revisions to estimates
are recognized in the period in which the estimate is revised.
As disclosed in the 2025 Annual Report, goodwill, and the intangible assets not yet
available for use (in-process research and development (IPR&D)) are evaluated for
impairment annually, or when facts and circumstances warrant. The intangible assets
available for use (currently marketed products and other intangible assets) are evaluated
for potential impairment whenever facts and circumstances indicate that their carrying
value may not be recoverable. The amount of goodwill and intangible assets other than
goodwill on the Company’s consolidated balance sheet has risen significantly in recent
years, primarily from acquisitions. Impairment testing may lead to potentially significant
impairment charges in the future that could have a materially adverse impact on the
Company’s results of operations and financial condition.
The Company’s activities are not subject to significant seasonal fluctuations.
Status of adoption of significant new or amended IFRS standards or interpretations
No new IFRS Accounting Standards were adopted by the Company in 2026. There were no
new IFRS Accounting Standards amendments or interpretations that became effective
in 2026 and 2025, that had a material impact on the Company’s consolidated financial
statements.
In 2024, the following new IFRS Accounting Standard, which is not yet effective, was
issued by the International Accounting Standards Board:
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements was issued by the International
Accounting Standards Board in April 2024. IFRS 18 will become effective on January
1, 2027, and is required to be applied retrospectively to comparative periods presented,
with early adoption permitted. Upon adoption, IFRS 18 replaces International Accounting
Standards (IAS®) Standards 1 – Presentation of Financial Statements.
IFRS 18 sets out new requirements focused on improving financial reporting by:
• requiring additional defined structure to the statement of profit or loss (i.e. consolidated
statement of income), to reduce diversity in the reporting, by requiring five categories
(operating, investing, financing, income taxes and discontinued operations) and defined
subtotals and totals (operating income, income before financing, income taxes and
net income),
• requiring disclosures in the notes to the financial statements about management-defined
performance measures (i.e. certain non-IFRS measures), and
19
• adding new principles for aggregation and disaggregation of information in the primary
financial statements and notes.
IFRS 18 will not affect the recognition or measurement of items in the financial statements,
but it might change what an entity reports as its “operating profit or loss”, due
to the classification of certain income and expense items between the five categories
of the consolidated income statement. It might also change what an entity reports
as operating activities, investing activities and financing activities within the
statement of cash flows, due to the change in classification of certain cash flow
items between these three categories of the cash flows statement.
The Company’s preliminary assessment of IFRS 18 impacts indicates that certain income
and expense amounts are expected to be reclassified within the consolidated income
statement. For example, portions of foreign currency results and monetary losses from
hyperinflation accounting will move from non-operating to operating income and expense.
These expected presentation changes will not affect reported net income. The consolidated
statement of cash flows presentation will change. It will start with operating income
instead of net income, and certain cash flows are expected to be reclassified among
the operating, investing, and financing activities categories. For example, dividends
received and interest received are expected to be reclassified from operating activities
to investing activities, while interest paid is expected to be reclassified from operating
activities to financing activities. These presentation changes will not affect the
net change in cash and cash equivalents reported for the period.
Novartis is currently finalizing its assessment of the impact of adopting IFRS 18,
which will be effective January 1, 2027.
Based on the Company’s assessment, there were no other IFRS Accounting Standards,
amendments or interpretations not yet effective in 2026 that would have been expected
to have a material impact on the Company’s consolidated financial statements.
3. Significant acquisitions of businesses
The following are the significant acquisitions of businesses where the Company applied
the business combination acquisition method of accounting.
Significant transaction in 2026
Acquisition of Avidity Biosciences, Inc.
On October 25, 2025, Novartis entered into an agreement and plan of merger to acquire
Avidity Biosciences, Inc. (“Avidity”), a U.S-based, publicly traded biotechnology
company specializing in RNA therapeutics, with a focus on rare neuromuscular genetic
disorders such as myotonic dystrophy type 1 (DM1), facioscapulohumeral muscular dystrophy
(FSHD), and Duchenne muscular dystrophy (DMD).
Pursuant to the merger agreement, on February 27, 2026, following the satisfaction
of the closing conditions, Novartis, through an indirect wholly owned subsidiary,
acquired all outstanding shares of Avidity’s common stock for USD 72.00 per share
in cash. The total consideration amounted to approximately USD 12.0 billion in cash
on a fully diluted basis. The acquiring subsidiary merged with and into Avidity, resulting
in Avidity becoming an indirect wholly owned subsidiary of Novartis. Avidity shares
admitted to trading on NASDAQ were subsequently delisted. The acquisition was financed
through a combination of available cash, and third-party debt financing.
The fair value of the total purchase consideration was approximately USD 12.0 billion.
The preliminary purchase price allocation resulted in net identifiable assets of approximately
USD 10.6 billion. These comprised identifiable intangible assets, including IPR&D,
of USD 11.3 billion (of which approximately USD 7.5 billion is attributable to the
DM1 IPR&D intangible asset), marketable securities of USD 1.1 billion, cash and cash
equivalents of USD 11 million, other net assets of USD 0.1 billion, and net deferred
tax liabilities of USD 1.9 billion. Goodwill arising from the acquisition amounted
to approximately USD 1.4 billion.
The purchase price allocation is preliminary as the detailed valuation of certain
acquired assets and liabilities, including identifiable intangible assets and deferred
tax balances, has not yet been completed. The finalization of the purchase price allocation
may result in changes to the amounts recognized for net identifiable assets and goodwill
in subsequent reporting periods.
The results of operations from the date of acquisition were not material.
Significant transaction in 2025
In 2025, there were no acquisitions of businesses where the Company applied the business
combination acquisition method of accounting.
Fair value of assets and liabilities acquired through business combinations
The following table presents the fair value of the assets and liabilities acquired
through business
20
combinations and the total purchase consideration for the first quarter of 2026. In
2025, there were no business combinations.
|
(USD billions) |
Mar 31,
2026 |
||
|
In-process research and development
|
11.3
|
||
|
Deferred tax assets
|
0.6
|
||
|
Other non-current assets
|
0.2
|
||
|
Marketable securities
|
1.1
|
||
|
Other current assets 1
|
0.1
|
||
|
Deferred tax liabilities
|
-2.5
|
||
|
Other non-current liabilities
|
-0.1
|
||
|
Other current liabilities
|
-0.1
|
||
|
Net identifiable assets acquired
|
10.6
|
||
|
Goodwill
|
1.4
|
||
|
Total purchase consideration for business combinations
|
12.0
|
||
|
1 Includes cash and cash equivalents of USD 11 million
|
|||
The business combination in the first quarter of 2026 was Avidity. The goodwill arising
out of the Avidity business combination is not tax deductible. It is primarily attributable
to the deferred tax effects arising from the recognition of identifiable intangible
assets for which no corresponding tax basis exists, expected synergies and the value
of the acquired assembled workforce.
The following are the significant acquisitions where Novartis elected to apply the
optional concentration test, resulting in the transaction being accounted for as assets
separately acquired rather than as a business combination within the meaning of IFRS
Accounting Standards.
Significant transaction in 2026
There were no acquisitions in the first quarter of 2026, where the Company elected
to apply the optional concentration test to account for the acquisitions as assets
separately acquired.
Significant transaction in 2025
Acquisition of Tourmaline Bio, Inc.
On September 8, 2025, Novartis entered into an agreement and plan of merger to acquire
Tourmaline Bio, Inc. (“Tourmaline”), a US-based, publicly traded clinical-stage biopharmaceutical
company focused on developing a treatment option for atherosclerotic cardiovascular
disease.
Pursuant to the merger agreement, on September 29, 2025, Novartis, through an indirect,
wholly owned subsidiary, commenced a tender offer (the “Offer”) to acquire all of
the outstanding shares of common stock of Tourmaline in exchange for USD 48.00 in
cash per share. The tender offer expired at one minute past 11:59 p.m., New York City
time on October 27, 2025 with a payment on October 28, 2025 in the amount of USD 1.4
billion for the tendered outstanding shares to the Tourmaline shareholders. On October
28, 2025, the acquiring subsidiary merged with and into Tourmaline, resulting in Tourmaline
becoming an indirect wholly owned subsidiary of Novartis. Tourmaline shares admitted
to trading on NASDAQ were subsequently delisted.
The cash purchase price consisted of cash consideration of USD 1.4 billion. The optional
concentration test was applied as it indicated that substantially all of the fair
value of the gross assets acquired was concentrated in an identifiable IPR&D intangible
asset.
The cash purchase price was allocated to an IPR&D intangible asset of USD 1.2 billion,
and other net assets including cash and cash equivalents of USD 0.2 billion.
Option agreement to acquire a private clinical-stage biotech company
On September 16, 2025, Novartis entered into an agreement granting it an option to
acquire all outstanding shares of a private clinical-stage biotech company (the “Biotech
company”). The option is subject to pre-defined terms and is exercisable at Novartis
sole discretion. Management concluded that the terms of the option agreement conferred
substantive control over the Biotech company, in accordance with the principles of
IFRS Accounting Standards. Consequently, the Biotech company was consolidated into
Novartis consolidated financial statements effective from September 2025.
If Novartis decides to exercise the option to acquire, it would make a payment to
the Biotech company’s shareholders, with potential additional payments, which they
are eligible to receive upon achievement of specified milestones. The optional concentration
test was applied as it indicated that substantially all of the fair value of the gross
assets at the consolidation date was concentrated in an identifiable IPR&D intangible
asset.
The purchase price as at the option agreement date was USD 0.4 billion. The amount
was allocated to the net assets at the consolidation date, including USD 0.4 billion
IPR&D intangible assets and USD 18 million in cash and cash equivalents. A non-controlling
interest of USD 0.4 billion was recognized in equity. Subsequent milestone-related
payments will be recognized as additions to the intangible asset when the specified
milestones are achieved.
Acquisition of Regulus Therapeutics Inc.
On April 29, 2025, Novartis entered into an agreement and plan of merger to acquire
Regulus Therapeutics Inc. (“Regulus”), a US-based, publicly traded clinical-stage
biopharmaceutical company focused on developing microRNA therapeutics. Regulus lead
development phase asset, farabursen, is a potential first-in-class, next-generation
oligonucleotide targeting miR-17 for the treatment of autosomal dominant polycystic
kidney disease (ADPKD).
Pursuant to the merger agreement, on May 27, 2025, Novartis, through an indirect,
wholly owned subsidiary, commenced a tender offer (the “Offer”)
21
to acquire all of the outstanding shares of common stock of Regulus in exchange for
(i) USD 7.00 in cash per Share, plus (ii) one contingent value right (each, a “CVR”) per Share,
representing the right to receive one contingent payment of USD 7.00 in cash, upon the achievement of a specified regulatory milestone. The tender offer
expired at one minute past 11:59 p.m., New York City time on June 24, 2025 with a
payment of USD 0.7 billion for the outstanding shares to the Regulus shareholders for their tendered
shares and the issuance of 1 CVR per share. Additionally, the liability related to the Regulus employee share
plans amounted to USD 0.1 billion and was paid on July 11, 2025, with the issuance of 1 CVR per share. On June 25, 2025, the acquiring subsidiary merged with and into Regulus,
resulting in Regulus becoming an indirect wholly owned subsidiary of Novartis. Regulus
shares admitted to trading on NASDAQ were subsequently delisted.
The purchase price consisted of cash consideration of USD 0.8 billion and CVRs of up to USD 0.9 billion, which Regulus shareholders are eligible to receive upon the achievement
of a specified regulatory milestone. The optional concentration test was applied as
it indicated that substantially all of the fair value of the gross assets acquired
was concentrated in an identifiable IPR&D intangible asset.
The cash purchase price was allocated to an IPR&D intangible asset of USD 0.8 billion, and other net assets including cash and cash equivalents of USD 23 million. Subsequent payments for the potential CVRs upon achievement of the specified
regulatory milestone will be recognized as additions to the intangible asset if the
specified regulatory milestone is achieved.
Acquisition of Anthos Therapeutics, Inc.
On February 10, 2025, Novartis entered into an agreement and plan of merger to acquire
all of the outstanding shares of common stock of Anthos Therapeutics, Inc. (“Anthos”),
a US-based, privately held clinical stage biopharmaceutical company with abelacimab,
a late-stage medicine in development for the prevention of stroke and systematic embolism
in patients with atrial fibrillation. The transaction closed on April 3, 2025.
The purchase price consisted of cash consideration of USD 0.9 billion and potential additional milestones of up to USD 2.1 billion, which Anthos shareholders are eligible to receive upon the achievement of
specified milestones. The optional concentration test was applied as it indicated
that substantially all of the fair value of the gross assets acquired was concentrated
in an identifiable IPR&D intangible asset.
The cash purchase price was allocated to an IPR&D intangible asset of USD 0.9 billion, and other net assets including cash and cash equivalents of USD 47 million. Subsequent payments for the potential additional milestones will be recognized
as additions to the intangible asset when the specified milestones have been achieved.
Identifiable net assets acquired through acquisitions applying the optional concentration
test
In the first quarter of 2026, there were no assets acquired through acquisitions applying
the optional concentration test. The following table presents the identifiable net
assets acquired through acquisitions applying the optional concentration test for
the year ended December 31, 2025:
|
(USD billions) |
Dec 31,
2025 |
||
|
In-process research and development
|
3.2
|
||
|
Deferred tax assets 1
|
0.2
|
||
|
Cash and cash equivalents
|
0.3
|
||
|
Other current and non-current assets
|
0.1
|
||
|
Current and non-current liabilities
|
-0.2
|
||
|
Identifiable net assets acquired through acquisitions applying the optional concentration test
|
3.6
|
||
|
1 Deferred tax assets are attributable to tax loss and tax credit carryforwards.
|
|||
For significant pending transactions, see Note 10. Other interim disclosures — Commitments — Other commitments.
22
4. Summary of equity attributable to Novartis AG shareholders
|
|
Number of outstanding shares (in millions)
|
Equity attributable to Novartis AG shareholders
|
|||||||||
|
Note |
2026 |
2025 |
Q1 2026
USD millions |
Q1 2025
USD millions |
|||||||
|
Balance at beginning of year
|
|
1 908.2
|
1 975.1
|
46 130
|
44 046
|
||||||
|
Shares acquired to be canceled
|
|
-10.4
|
-24.8
|
-1 600
|
-2 639
|
||||||
|
Other share purchases
|
|
-2.0
|
-1.5
|
-289
|
-153
|
||||||
|
Equity-based compensation plans
|
|
12.2
|
10.4
|
297
|
273
|
||||||
|
Taxes on treasury share transactions
|
|
|
|
-21
|
-31
|
||||||
|
Dividends
|
4.1
|
|
|
-9 068
|
-7 818
|
||||||
|
Net income of the period attributable to shareholders of Novartis AG
|
|
|
|
3 156
|
3 606
|
||||||
|
Other comprehensive income attributable to shareholders of Novartis AG
|
|
|
|
-158
|
1 040
|
||||||
|
Changes in non-controlling interests
|
|
|
|
|
1
|
||||||
|
Other movements
|
4.3
|
0.1
|
0.1
|
65
|
44
|
||||||
|
Balance at March 31
|
|
1 908.1
|
1 959.3
|
38 512
|
38 369
|
|
|||||
4.1. The annual gross dividend to shareholders of Novartis AG amounted to USD 9.1 billion (2025: USD 7.8 billion). The net dividend payment to Novartis AG shareholders paid in March 2026
amounted to USD 6.2 billion (2025: USD 5.3 billion paid in March 2025). The USD 2.9
billion Swiss withholding tax on the gross dividend was paid at its due date in April
2026 (2025: USD 2.5 billion paid at its due date in April 2025).
4.2. In July 2023, Novartis entered into an irrevocable, non-discretionary arrangement
with a bank to repurchase Novartis shares on the second trading line under its up-to
USD 15.0 billion share buyback. In June 2024, Novartis amended the arrangement to include
the repurchase of an additional 8.7 million Novartis shares on the second trading
line to mitigate the impact of share deliveries under the equity-based compensation
plans for employees. These additional repurchases of 8.7 million shares concluded
in October 2024. In June 2025, Novartis amended the arrangement to include the repurchase
of an additional 10.7 million Novartis shares on the second trading line to mitigate
the impact of share deliveries under the equity-based compensation plans for employees.
These additional repurchases of 10.7 million shares concluded in August 2025.
The repurchases under the USD 15.0 billion share buyback that commenced in July 2023
concluded in July 2025.
In July 2025, Novartis amended and restated its arrangement to repurchase Novartis
shares on the second trading line under its new up-to USD 10.0 billion share buyback.
In March 2026, Novartis replaced its July 2025 arrangement with a new irrevocable,
non-discretionary arrangement with a bank to continue repurchasing Novartis shares
on the second trading line under its up-to USD 10.0 billion share buyback.
Novartis is able to cancel this arrangement at any time but may be subject to a 90
day waiting period. As of March 31, 2026, and December 31, 2025, these waiting period
conditions were not applicable and as a result, there was no requirement to record
a liability under this arrangement as of March 31, 2026, and December 31, 2025.
4.3. Other movements include mainly the impact of the application of IAS Standards
29 “Financial Reporting in Hyperinflationary Economies,” for subsidiaries in hyperinflationary
economies.
23
5. Financial instruments
The following table illustrates the three hierarchical levels for valuing financial
instruments at fair value as of March 31, 2026, and December 31, 2025. For additional information on the hierarchies and other matters, please
refer to the Consolidated Financial Statements in the 2025 Annual Report, published
on February 4, 2026.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||
|
(USD millions) |
Mar 31,
2026 |
Dec 31,
2025 |
Mar 31,
2026 |
Dec 31,
2025 |
Mar 31,
2026 |
Dec 31,
2025 |
Mar 31,
2026 |
Dec 31,
2025 |
|||||||||
|
Financial assets
|
|
|
|
|
|
|
|
|
|||||||||
|
Cash and cash equivalents - debt securities
|
10
|
|
|
|
|
|
10
|
|
|||||||||
|
Derivative financial instruments
|
|
|
85
|
57
|
|
|
85
|
57
|
|||||||||
|
Current contingent consideration receivables
|
|
|
|
|
124
|
101
|
124
|
101
|
|||||||||
|
Current debt and equity securities
|
7
|
15
|
1
|
|
12
|
12
|
20
|
27
|
|||||||||
|
Total current financial assets at fair value
|
17
|
15
|
86
|
57
|
136
|
113
|
239
|
185
|
|||||||||
|
Non-current debt and equity securities
|
408
|
255
|
6
|
7
|
517
|
529
|
931
|
791
|
|||||||||
|
Fund investments
|
19
|
19
|
|
|
210
|
183
|
229
|
202
|
|||||||||
|
Non-current contingent consideration receivables
|
|
|
|
|
775
|
758
|
775
|
758
|
|||||||||
|
Associated companies at fair value through profit or loss
|
|
|
|
|
90
|
88
|
90
|
88
|
|||||||||
|
Total non-current financial assets at fair value
|
427
|
274
|
6
|
7
|
1 592
|
1 558
|
2 025
|
1 839
|
|||||||||
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|||||||||
|
Current contingent consideration liabilities
|
|
|
|
|
-146
|
-215
|
-146
|
-215
|
|||||||||
|
Derivative financial instruments
|
|
|
-145
|
-81
|
|
|
-145
|
-81
|
|||||||||
|
Total current financial liabilities at fair value
|
|
|
-145
|
-81
|
-146
|
-215
|
-291
|
-296
|
|||||||||
|
Non-current contingent consideration liabilities
|
|
|
|
|
-441
|
-452
|
-441
|
-452
|
|||||||||
In the first quarter of 2026, there was one transfer of equity securities from Level
3 to Level 1 for USD 8 million due to Initial Public Offering of the invested company.
The carrying amount of non-current debt and equity securities, fund investments and non-current contingent
consideration receivables totalling USD 1.9 billion at March 31, 2026 (USD 1.8 billion at December 31, 2025) is included in the line “Financial assets” of the consolidated balance sheets. The carrying amount of current
contingent consideration liabilities of USD 0.1 billion at March 31, 2026 (USD 0.2 billion at December 31, 2025) is included in the line “Provisions and other current
liabilities” of the consolidated balance sheets. The carrying amount of non-current
contingent consideration liabilities of USD 0.4 billion at March 31, 2026 (USD 0.5 billion at December 31, 2025) is included in the line “Provisions and other non-current
liabilities” of the consolidated balance sheets.
The fair value of straight bonds and floating rate bonds amounted to USD 37.3 billion at March 31, 2026 (USD 26.6 billion at December 31, 2025) compared with the carrying amount of USD 38.7 billion at March 31, 2026 (USD 27.9 billion at December 31, 2025). For all other financial assets and liabilities, the
carrying amount is a reasonable approximation of the fair value.
The Company’s exposure to financial risks has not changed significantly during the
period and there have been no major changes to the risk management department or in
any risk management policies.
24
6. Details to the consolidated statements of cash flows
6.1. Non-cash items and other adjustments
The following table shows the reversal of non-cash items and other adjustments in
the consolidated statements of cash flows.
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Depreciation, amortization and impairments on:
|
|
|
|||
|
Property, plant and equipment
|
298
|
217
|
|||
|
Right-of-use assets
|
73
|
65
|
|||
|
Intangible assets
|
857
|
872
|
|||
|
Financial assets 1
|
-20
|
41
|
|||
|
Change in provisions and other non-current liabilities
|
70
|
182
|
|||
|
(Gains)/losses on disposal on property, plant and equipment; intangible assets; other
non-current assets; and other adjustments on financial assets and other non-current assets, net
|
-159
|
22
|
|||
|
Equity-settled compensation plans
|
303
|
262
|
|||
|
Loss from associated companies
|
3
|
3
|
|||
|
Income taxes
|
683
|
798
|
|||
|
Net financial expense
|
393
|
253
|
|||
|
Other
|
-10
|
-3
|
|||
|
Total
|
2 491
|
2 712
|
|||
|
1 Includes fair value changes
|
|||||
6.2. Cash flows from changes in working capital and other operating cash flow items included
in the net cash flows from operating activities
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
(Increase)/decrease in inventories
|
-95
|
55
|
|||
|
Increase in trade receivables
|
-504
|
-1 043
|
|||
|
Decrease in trade payables
|
-53
|
-172
|
|||
|
Change in other current and non-current assets
|
346
|
-424
|
|||
|
Change in provisions and other current liabilities
|
-481
|
-184
|
|||
|
Total
|
-787
|
-1 768
|
|||
6.3. Cash flows related to acquisitions of businesses
The following table is a summary of the cash flow impact of acquisitions of businesses:
|
(USD millions)
|
Note
|
Q1 2026
|
Q1 2025
|
||||
|
Total purchase consideration for business combinations
|
3
|
-12 031
|
0
|
||||
|
Acquired cash and cash equivalents
|
|
11
|
|
||||
|
Contingent consideration payables, net
|
|
-21
|
|
||||
|
Acquisitions of businesses
|
|
-12 041
|
0
|
||||
Note 3 provides disclosure of the fair value of assets and liabilities acquired through
business combinations. All considerations paid for acquisitions were in cash.
6.4. Cash flows related to divestments of businesses
Cash flows related to divestments of businesses were not material. All considerations
received from divestments were in cash.
25
7. Legal proceedings update
A number of Novartis companies are, and will likely continue to be, subject to various
legal proceedings, including litigations, arbitrations and governmental investigations,
that arise from time to time. Legal proceedings are inherently unpredictable. As a
result, the Company may become subject to substantial liabilities that may not be
covered by insurance and may in the future incur judgments or enter into settlements
of claims that could have a material adverse effect on its results of operations or
cash flow. Note 20 to the Consolidated Financial Statements in our 2025 Annual Report
and 2025 Form 20-F contains a summary as of the date of these reports of significant
legal proceedings to which Novartis or its subsidiaries were a party. The following
is a summary as of April 27, 2026, of significant developments in those proceedings,
as well as any new significant proceedings commenced since the date of the 2025 Annual
Report and 2025 Form 20-F.
Investigations and related litigations
Southern District of New York (S.D.N.Y.) Gilenya marketing practices investigation and litigation
In 2013, Novartis Pharmaceuticals Corporation (NPC) received a civil investigative
demand from the United States Attorney’s Office for the S.D.N.Y. requesting the production
of documents and information relating to marketing practices for Gilenya, including the remuneration of healthcare providers in connection therewith. In 2017,
the S.D.N.Y. and New York State declined to intervene in claims raised by an individual
relator in a qui tam complaint. In 2022, NPC’s motion to dismiss this complaint was
granted. In December 2024, the appeals court affirmed in part but remanded in part,
sending the case back to the district court for further proceedings. In March 2026,
the district court denied Novartis motion to dismiss and the case proceeded to discovery.
The claims are being vigorously contested.
In addition to the matters described above, there have been other non-material developments
in the other legal matters described in Note 20 to the Consolidated Financial Statements
contained in our 2025 Annual Report and 2025 Form 20-F.
Novartis believes that its total provisions for investigations, product liability,
arbitration and other legal matters are adequate based upon currently available information.
However, given the inherent difficulties in estimating liabilities, there can be no
assurance that additional liabilities and costs will not be incurred beyond the amounts
provided.
8. Operating segment
Novartis operates as a single global operating segment innovative medicines company
that is engaged in the research, development, manufacturing, distribution, marketing
and sale of a broad range of innovative pharmaceuticals medicines, with a focus on
the core therapeutic areas: cardiovascular, renal and metabolic; immunology; neuroscience;
oncology; and established brands. The Company’s research, development, manufacturing
and supply of products and functional activities are managed globally on a vertically
integrated basis. Commercial efforts that coordinate marketing, sales and distribution
of these products are organized by geographic region, therapeutic area and established
brands.
The Executive Committee of Novartis (ECN), chaired by the CEO, is the governance body
responsible for allocating resources and assessing the business performance of the
operating segment of the Company on a global basis and is the chief operating decision-maker
(CODM) for the Company.
The determination of a single operating segment is consistent with the financial information
regularly reviewed by the CODM for purposes of assessing performance and allocating
resources.
See Note 9 for revenues and geographic information disclosures.
26
9. Revenues and geographic information
Net sales to third parties
Net sales to third parties by region1
First quarter
|
Q1 2026
USD m |
Q1 2025
USD m |
% change
USD |
% change
cc 2 |
Q1 2026
% of total |
Q1 2025
% of total |
||||||||
|
US
|
4 959
|
5 712
|
-13
|
-13
|
38
|
43
|
|||||||
|
Europe
|
4 186
|
3 905
|
7
|
-3
|
32
|
30
|
|||||||
|
Asia/Africa/Australasia
|
3 020
|
2 772
|
9
|
6
|
23
|
21
|
|||||||
|
Canada and Latin America
|
948
|
844
|
12
|
6
|
7
|
6
|
|||||||
|
Total
|
13 113
|
13 233
|
-1
|
-5
|
100
|
100
|
|||||||
|
Of which in established markets
|
9 262
|
9 669
|
-4
|
-8
|
71
|
73
|
|||||||
|
Of which in emerging growth markets
|
3 851
|
3 564
|
8
|
3
|
29
|
27
|
|||||||
|
|
|
|
|
|
|
||||||||
|
1 Net sales to third parties by location of customer. Emerging growth markets comprise
all markets other than the established markets of the US, Canada, Western Europe,
Japan, Australia and New Zealand. Novartis definition of Western Europe includes Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg,
Malta, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United
Kingdom.
|
|||||||||||||
|
2 Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures
used by Novartis can be found starting on page 32.
|
|||||||||||||
27
Net sales to third parties by core therapeutic area and established brands
First quarter
|
Q1 2026
|
Q1 2025
|
% change
|
% change
|
||||||
|
USD m
|
USD m
|
USD
|
cc 1
|
||||||
|
Cardiovascular, renal and metabolic
|
|
|
|
|
|||||
|
Entresto
|
1 305
|
2 261
|
-42
|
-46
|
|||||
|
Leqvio
|
452
|
257
|
76
|
69
|
|||||
|
Vanrafia
|
16
|
|
nm
|
nm
|
|||||
|
Total cardiovascular, renal and metabolic
|
1 773
|
2 518
|
-30
|
-33
|
|||||
|
|
|
|
|
||||||
|
Immunology
|
|
|
|
|
|||||
|
Cosentyx
|
1 566
|
1 534
|
2
|
-2
|
|||||
|
Ilaris
|
475
|
419
|
13
|
10
|
|||||
|
Xolair 2
|
388
|
456
|
-15
|
-20
|
|||||
|
Rhapsido
|
37
|
|
nm
|
nm
|
|||||
|
Total immunology
|
2 466
|
2 409
|
2
|
-1
|
|||||
|
|
|
|
|
||||||
|
Neuroscience
|
|
|
|
|
|||||
|
Kesimpta
|
1 164
|
899
|
29
|
26
|
|||||
|
Zolgensma Group
|
302
|
327
|
-8
|
-12
|
|||||
|
Aimovig
|
95
|
76
|
25
|
14
|
|||||
|
Total neuroscience
|
1 561
|
1 302
|
20
|
16
|
|||||
|
|
|
|
|
||||||
|
Oncology
|
|
|
|
|
|||||
|
Kisqali
|
1 516
|
956
|
59
|
55
|
|||||
|
Pluvicto
|
642
|
371
|
73
|
70
|
|||||
|
Jakavi
|
557
|
492
|
13
|
5
|
|||||
|
Tafinlar + Mekinist
|
493
|
552
|
-11
|
-14
|
|||||
|
Scemblix
|
433
|
238
|
82
|
79
|
|||||
|
Lutathera
|
211
|
193
|
9
|
7
|
|||||
|
Fabhalta 3
|
169
|
81
|
109
|
103
|
|||||
|
Total oncology 4
|
4 021
|
2 883
|
39
|
35
|
|||||
|
|
|
|
|
||||||
|
Established brands
|
|
|
|
|
|||||
|
Sandostatin Group
|
287
|
317
|
-9
|
-12
|
|||||
|
Exforge Group
|
203
|
179
|
13
|
7
|
|||||
|
Promacta/Revolade 4
|
184
|
546
|
-66
|
-68
|
|||||
|
Tasigna 4
|
155
|
377
|
-59
|
-61
|
|||||
|
Diovan Group
|
150
|
150
|
0
|
-4
|
|||||
|
Myfortic 4
|
111
|
99
|
12
|
9
|
|||||
|
Lucentis
|
104
|
189
|
-45
|
-50
|
|||||
|
Piqray/Vijoice 4
|
81
|
100
|
-19
|
-20
|
|||||
|
Kymriah
|
81
|
100
|
-19
|
-22
|
|||||
|
Contract manufacturing
|
352
|
343
|
3
|
-5
|
|||||
|
Other 4
|
1 584
|
1 721
|
-8
|
-13
|
|||||
|
Total established brands 4
|
3 292
|
4 121
|
-20
|
-24
|
|||||
|
|
|
|
|
||||||
|
Total net sales to third parties
|
13 113
|
13 233
|
-1
|
-5
|
|||||
|
1 Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures
used by Novartis can be found starting on page 32.
|
|||||||||
|
2 Net sales to third parties reflect Xolair sales for all indications.
|
|||||||||
|
3 Net sales to third parties reflect Fabhalta sales for all indications.
|
|||||||||
|
4 Reclassified to conform with 2026 presentation of brands by therapeutic area and established
brands.
|
|||||||||
|
|
|||||||||
|
nm = not meaningful
|
|||||||||
28
Net sales to third parties1 of the top 20 brands in 2026
First quarter
|
|
|
US
|
Rest of world
|
Total
|
||||||||||||||||||
|
Brands
|
Brand classification by therapeutic area or established brands
|
Key indications
|
USD m
|
% change USD/cc 2
|
USD m
|
% change USD
|
% change cc 2
|
USD m
|
% change USD
|
% change cc 2
|
||||||||||||
|
Cosentyx
|
Immunology
|
Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA), hidradenitis suppurativa (HS)
|
770
|
-6
|
796
|
11
|
3
|
1 566
|
2
|
-2
|
||||||||||||
|
Kisqali
|
Oncology
|
HR+/HER2- metastatic breast cancer and early breast cancer
|
925
|
58
|
591
|
60
|
50
|
1 516
|
59
|
55
|
||||||||||||
|
Entresto
|
Cardiovascular, renal and metabolic
|
Chronic heart failure, hypertension
|
72
|
-94
|
1 233
|
13
|
6
|
1 305
|
-42
|
-46
|
||||||||||||
|
Kesimpta
|
Neuroscience
|
Relapsing forms of multiple sclerosis (MS)
|
724
|
23
|
440
|
41
|
31
|
1 164
|
29
|
26
|
||||||||||||
|
Pluvicto
|
Oncology
|
PSMA-positive mCRPC patients post-ARPI, pre- and post-Taxane
|
506
|
76
|
136
|
62
|
48
|
642
|
73
|
70
|
||||||||||||
|
Jakavi
|
Oncology
|
Myelofibrosis (MF), polycythemia vera (PV), graft-versus-host disease (GvHD)
|
|
|
557
|
13
|
5
|
557
|
13
|
5
|
||||||||||||
|
Tafinlar + Mekinist
|
Oncology
|
BRAF V600+ metastatic and adjuvant melanoma, advanced non-small cell lung cancer (NSCLC), tumor agnostic with BRAF mutation indication, pediatric low grade glioma (pLGG)
|
170
|
-18
|
323
|
-6
|
-12
|
493
|
-11
|
-14
|
||||||||||||
|
Ilaris
|
Immunology
|
Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD, gout)
|
246
|
13
|
229
|
14
|
7
|
475
|
13
|
10
|
||||||||||||
|
Leqvio
|
Cardiovascular, renal and metabolic
|
Atherosclerotic cardiovascular disease (ASCVD)
|
166
|
31
|
286
|
120
|
106
|
452
|
76
|
69
|
||||||||||||
|
Scemblix
|
Oncology
|
Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML) in chronic phase (CP); Ph+ CML in CP with the T315I mutation
|
286
|
86
|
147
|
75
|
68
|
433
|
82
|
79
|
||||||||||||
|
Xolair 3
|
Immunology
|
Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps, food allergy (FA)
|
|
|
388
|
-15
|
-20
|
388
|
-15
|
-20
|
||||||||||||
|
Zolgensma Group
|
Neuroscience
|
Spinal muscular atrophy (SMA)
|
117
|
-9
|
185
|
-7
|
-14
|
302
|
-8
|
-12
|
||||||||||||
|
Sandostatin Group
|
Established brands
|
Carcinoid tumors, acromegaly
|
162
|
-18
|
125
|
4
|
-2
|
287
|
-9
|
-12
|
||||||||||||
|
Lutathera
|
Oncology
|
GEP-NETs gastroenteropancreatic neuroendocrine tumors
|
151
|
9
|
60
|
11
|
5
|
211
|
9
|
7
|
||||||||||||
|
Exforge Group
|
Established brands
|
Hypertension
|
2
|
0
|
201
|
14
|
7
|
203
|
13
|
7
|
||||||||||||
|
Promacta/Revolade
|
Established brands
|
Immune thrombocytopenia (ITP), severe aplastic anemia (SAA)
|
25
|
-91
|
159
|
-38
|
-42
|
184
|
-66
|
-68
|
||||||||||||
|
Fabhalta 4
|
Oncology
|
Paroxysmal Nocturnal Hemoglobinuria (PNH), IgA Nephropathy (IgAN), Adult C3 Glomerulopathy (C3G)
|
99
|
90
|
70
|
141
|
127
|
169
|
109
|
103
|
||||||||||||
|
Tasigna
|
Established brands
|
Chronic myeloid leukemia (CML)
|
28
|
-86
|
127
|
-29
|
-34
|
155
|
-59
|
-61
|
||||||||||||
|
Diovan Group
|
Established brands
|
Hypertension
|
10
|
-23
|
140
|
2
|
-3
|
150
|
0
|
-4
|
||||||||||||
|
Myfortic
|
Established brands
|
Prophylaxis of acute organ rejection in kidney transplantation
|
4
|
-20
|
107
|
14
|
11
|
111
|
12
|
9
|
||||||||||||
|
Top 20 brands total
|
4 463
|
-14
|
6 300
|
14
|
7
|
10 763
|
1
|
-3
|
||||||||||||||
|
Rest of portfolio
|
496
|
-8
|
1 854
|
-7
|
-14
|
2 350
|
-7
|
-12
|
||||||||||||||
|
Net sales to third parties
|
4 959
|
-13
|
8 154
|
8
|
1
|
13 113
|
-1
|
-5
|
||||||||||||||
|
|
||||||||||||||||||||||
|
1 Net sales to third parties by location of customer
|
||||||||||||||||||||||
|
2 Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures
used by Novartis can be found starting on page 32.
|
||||||||||||||||||||||
|
3 Net sales to third parties reflect Xolair sales for all indications.
|
||||||||||||||||||||||
|
4 Net sales to third parties reflect Fabhalta sales for all indications.
|
||||||||||||||||||||||
29
Other revenues
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Profit sharing income
|
332
|
257
|
|||
|
Royalty income
|
26
|
8
|
|||
|
Milestone income
|
13
|
54
|
|||
|
Other 1
|
40
|
68
|
|||
|
Total other revenues
|
411
|
387
|
|||
|
|
|||||
|
1 Other includes revenue from activities such as manufacturing or other services rendered,
to the extent such revenue is not recorded under net sales to third parties.
|
|||||
10. Other interim disclosures
Property, plant and equipment, right-of-use assets and intangible assets
The following table shows additional disclosures related to property, plant and equipment,
right-of-use assets and intangible assets:
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Property, plant and equipment impairment charges
|
-39
|
-2
|
|||
|
Property, plant and equipment depreciation charge
|
-259
|
-215
|
|||
|
Right-of-use assets depreciation charge
|
-73
|
-65
|
|||
|
Intangible assets impairment charges
|
|
-2
|
|||
|
Intangible assets amortization charge
|
-857
|
-870
|
|||
|
|
|||||
In the first quarter of 2026 and 2025, there were no impairment charges on right-of-use assets and no reversals of impairment charges
on property, plant and equipment, right-of-use assets and intangible assets.
The following table shows the additions to property, plant and equipment, right-of-use
assets and intangible assets other than goodwill, excluding the impacts of the first
quarter 2026 business combination, which is disclosed in Note 3:
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Additions to property, plant and equipment
|
275
|
210
|
|||
|
Additions to right-of-use assets
|
49
|
56
|
|||
|
Additions to intangible assets other than goodwill
|
444
|
1 179
|
|||
Financial debts
The acquisition of Avidity Biosciences, Inc., completed on February 27, 2026, was
initially financed through a USD 11.0 billion bridge loan with an interest rate based
on compounded Secured Overnight Financing Rate (SOFR). The bridge loan was fully repaid
on March 18, 2026, using the proceeds from the straight and floating rate bonds issued
in the first quarter of 2026.
30
The following table provides a breakdown of straight and floating rate bonds issued
in the first quarter of 2026:
|
Coupon |
Currency |
Notional
amount (millions) |
Issuance year |
Maturity year |
Issuer |
Issue price |
USD millions |
||||||||
|
SOFR + 0.65%
|
USD
|
500
|
2026
|
2029
|
Novartis Capital Corporation, New York, United States
|
100.000%
|
499
|
||||||||
|
4.100%
|
USD
|
1 250
|
2026
|
2029
|
Novartis Capital Corporation, New York, United States
|
99.883%
|
1 246
|
||||||||
|
4.400%
|
USD
|
1 750
|
2026
|
2031
|
Novartis Capital Corporation, New York, United States
|
99.960%
|
1 745
|
||||||||
|
4.600%
|
USD
|
2 000
|
2026
|
2033
|
Novartis Capital Corporation, New York, United States
|
99.574%
|
1 986
|
||||||||
|
4.900%
|
USD
|
2 250
|
2026
|
2036
|
Novartis Capital Corporation, New York, United States
|
99.719%
|
2 236
|
||||||||
|
5.600%
|
USD
|
1 000
|
2026
|
2046
|
Novartis Capital Corporation, New York, United States
|
99.536%
|
990
|
||||||||
|
5.700%
|
USD
|
2 250
|
2026
|
2056
|
Novartis Capital Corporation, New York, United States
|
99.120%
|
2 216
|
||||||||
|
Total straight and floating rate bonds issued in the first quarter of 2026
|
|
10 918
|
|||||||||||||
|
Total straight and floating rate bonds, March 31, 2026
|
|
38 688
|
|||||||||||||
|
Total straight and floating rate bonds, December 31, 2025
|
|
27 929
|
|||||||||||||
Commitments
Other commitments
The Company has entered into various purchase commitments for services and materials
as well as for equipment in the ordinary course of business. These commitments are
generally entered into at current market prices and reflect normal business operations.
The Company routinely acquires interests in intellectual property focused on key disease
areas and indications that the Company expects to be growth drivers in the future.
Pending acquisition commitment to acquire Excellergy, Inc. – On March 26, 2026, Novartis entered into an agreement and plan of merger to acquire
all outstanding shares of Excellergy, Inc., a US-based, privately held clinical-stage
biotechnology company focused on the development of next-generation anti-IgE therapies
for IgE-driven diseases. Under the terms of the agreement, Novartis will make an upfront
payment of USD 0.9 billion at closing and up to USD 1.1 billion in additional payments
contingent upon the achievement of specified milestones. The transaction is expected
to close in the second half of 2026, subject to the satisfaction or waiver of customary
closing conditions, including regulatory approvals.
Pending acquisition commitment to acquire Pikavation Therapeutics, Inc. – On March 18, 2026, Novartis entered into a stock purchase agreement to acquire Pikavation
Therapeutics, Inc., a wholly owned subsidiary of Synnovation Therapeutics, LLC, that
holds a portfolio of pan-mutant selective PI3Ka inhibitor programs, including SNV4818.
Under the terms of the agreement, Novartis will make an upfront payment of USD 2.0
billion at closing and up to USD 1.0 billion in additional payments contingent upon
the achievement of specified milestones. The transaction is expected to close in the
second quarter of 2026, subject to satisfaction or waiver of customary closing conditions,
including regulatory approvals.
31
Supplementary information (unaudited)
Non-IFRS measures as defined by Novartis
Novartis uses certain non-IFRS Accounting Standards metrics when measuring performance,
especially when measuring current-year results against prior periods, including core
results, constant currencies and free cash flow. These are referred to by Novartis
as non-IFRS measures.
Despite the use of these measures by management in setting goals and measuring the
Company’s performance, these are non-IFRS measures that have no standardized meaning
prescribed by IFRS Accounting Standards. As a result, such measures have limits in
their usefulness to investors.
Because of their non-standardized definitions, the non-IFRS measures (unlike IFRS
Accounting Standards measures) may not be comparable to the calculation of similar
measures of other companies. These non-IFRS measures are presented solely to permit
investors to more fully understand how the Company’s management assesses underlying
performance. These non-IFRS measures are not, and should not be viewed as, a substitute
for IFRS Accounting Standards measures and should be viewed in conjunction with the
consolidated financial statements presented in accordance with IFRS Accounting Standards.
As an internal measure of Company performance, these non-IFRS measures have limitations,
and the Company’s performance management process is not solely restricted to these
metrics.
Core results
The Company’s core results – including core operating income, core net income and core earnings per share – exclude fully the amortization and net impairment charges of intangible assets, excluding
software, net gains and losses on fund investments and equity securities valued at
fair value through profit and loss, impact of IAS Standards 29 “Financial Reporting
in Hyperinflationary Economies” to other financial income and expense, and certain
acquisition- and divestment-related items. The following items that exceed a threshold
of USD 25 million are also excluded: integration- and divestment-related income and expenses;
divestment gains and losses; restructuring charges/releases and related items; legal-related
items; impairments of property, plant and equipment, software, and financial assets,
and income and expense items that management deems exceptional and that are or are
expected to accumulate within the year to be over a USD 25 million threshold.
Novartis believes that investor understanding of the Company’s performance is enhanced
by disclosing core measures of performance since, core measures exclude items that
can vary significantly from year to year, they enable better comparison of business
performance across years. For this same reason, Novartis uses these core measures
in addition to IFRS Accounting Standards measures and other measures as important
factors in assessing the Company’s performance.
The following are examples of how these core measures are used:
• In addition to monthly reports containing financial information prepared under IFRS
Accounting Standards, senior management receives a monthly analysis incorporating
these non-IFRS core measures.
• Annual budgets are prepared for both IFRS Accounting Standards and non-IFRS core measures.
As an internal measure of Company performance, the core results measures have limitations,
and the Company’s performance management process is not solely restricted to these
metrics. A limitation of the core results measures is that they provide a view of
the Company’s operations without including all events during a period, such as the
effects of an acquisition, divestment, or amortization/impairments of intangible assets,
impairments to property, plant and equipment and restructurings and related items.
Constant currencies
Changes in the relative values of non-US currencies to the US dollar can affect the
Company’s financial results and financial position. To provide additional information
that may be useful to investors, including changes in volume, price and generic competition
impacts on net sales, we present information about changes in net sales and selected
key figures, including operating income and net income, on a basis that excludes the
effects of foreign currency fluctuations.
Constant currency calculations have the goal of eliminating two exchange rate effects
so that an estimate can be made of underlying changes in the consolidated income statement
excluding the impact of fluctuations in exchanges rates:
• The impact of translating the income statements of consolidated entities from their
non-USD functional currencies to USD
• The impact of exchange rate movements on the major transactions of consolidated entities
performed in currencies other than their functional currency.
We calculate constant currency change measures to present percentage changes by translating
the current year’s foreign currency sales and other income statement items into USD
using the prior-year average exchange rates (excluding adjustments required under
IAS Standards 29 “Financial Reporting
32
in Hyperinflationary Economies” for subsidiaries operating in hyperinflationary economies),
and then comparing these translated amounts to prior-year results in USD to derive
a constant currency percentage change.
We use constant currency percentage change measures in evaluating the Company’s performance,
since they may assist us in evaluating our ongoing performance from year to year.
These percentage change measures are considered alongside the corresponding USD percentage
change measures that are not adjusted for changes in currency exchange rates.
Free cash flow
Novartis defines free cash flow as net cash flows from operating activities less purchases
of property, plant and equipment. Management believes that this definition provides
a performance measure that focuses on core operating activities, and also excludes
items that can vary significantly from year to year, thereby enabling better comparison
of business performance across years.
Free cash flow is a non-IFRS measure, which means it should not be interpreted as
a measure determined under IFRS Accounting Standards. Free cash flow is not intended
to be a substitute measure for net cash flows from operating activities as determined
under IFRS Accounting Standards. Free cash flow is presented as additional information
because management believes it is a useful supplemental indicator of the Company’s
ability to operate without reliance on additional borrowing or use of existing cash.
Free cash flow is a measure of the net cash generated that is available for investment
in strategic opportunities, returning to shareholders and for debt repayment.
Additional information
Growth rate calculation
For ease of understanding, Novartis uses a sign convention for its growth rates such
that a reduction in operating expenses or losses compared with the prior year is shown
as a positive growth.
Net debt
Novartis calculates net debt as current financial debts and derivative financial instruments
plus non-current financial debts less cash and cash equivalents and marketable securities,
time deposits and derivative financial instruments.
Net debt is presented as additional information because it sets forth how management
monitors net debt or liquidity and management believes it is a useful supplemental
indicator of the Company’s ability to pay dividends, to meet financial commitments,
and to invest in new strategic opportunities, including strengthening its balance
sheet.
See page 37 for additional disclosures related to net debt.
33
Reconciliation from IFRS Accounting Standards results to non-IFRS measure core results
The following table provides an overview of the reconciliation from IFRS Accounting
Standards results to non-IFRS measure core results:
|
(USD millions unless indicated otherwise)
|
Q1 2026
|
Q1 2025
|
|||
|
IFRS Accounting Standards operating income
|
4 235
|
4 663
|
|||
|
Amortization of intangible assets
|
775
|
789
|
|||
|
Impairments
|
|
|
|||
|
Intangible assets
|
|
1
|
|||
|
Other property, plant and equipment
|
34
|
|
|||
|
Total impairment charges
|
34
|
1
|
|||
|
Acquisition or divestment of businesses and related items
|
|
|
|||
|
- Income
|
-129
|
-111
|
|||
|
- Expense
|
123
|
103
|
|||
|
Total acquisition or divestment of businesses and related items, net
|
-6
|
-8
|
|||
|
Other items
|
|
|
|||
|
Divestment gains
|
-125
|
|
|||
|
Financial assets - fair value adjustments
|
-19
|
41
|
|||
|
Restructuring and related items
|
|
|
|||
|
- Income
|
-14
|
-16
|
|||
|
- Expense
|
114
|
145
|
|||
|
Additional income
|
-149
|
-61
|
|||
|
Additional expense
|
52
|
21
|
|||
|
Total other items
|
-141
|
130
|
|||
|
Total adjustments
|
662
|
912
|
|||
|
Core operating income
|
4 897
|
5 575
|
|||
|
as % of net sales
|
37.3%
|
42.1%
|
|||
|
Loss from associated companies
|
-3
|
-3
|
|||
|
Interest expense
|
-343
|
-270
|
|||
|
Other financial income and expense
|
-50
|
17
|
|||
|
Core adjustments to other financial income and expense
|
54
|
29
|
|||
|
Income taxes, adjusted for core adjustment items (core income taxes)
|
-761
|
-866
|
|||
|
Core net income
|
3 794
|
4 482
|
|||
|
Core net income attributable to shareholders of Novartis AG
|
3 794
|
4 479
|
|||
|
Core net income attributable to non-controlling interests
|
0
|
3
|
|||
|
Core basic EPS (USD) 1
|
1.99
|
2.28
|
|||
|
1 Core earnings per share (EPS) is calculated by dividing core net income attributable
to shareholders of Novartis AG by the weighted average number of shares outstanding
used in the basic EPS calculation in the reporting period.
|
|||||
34
Reconciliation from IFRS Accounting Standards results to non-IFRS measure core results
First quarter
|
(USD millions unless indicated otherwise) |
Q1 2026
IFRS Accounting Standards results |
Amortization of intangible assets 1 |
Impairments 2 |
Acquisition or divestment of businesses and related items 3 |
Other items 4 |
Q1 2026 Core results |
Q1 2025 Core results |
||||||||
|
Gross profit
|
10 065
|
694
|
|
|
21
|
10 780
|
11 082
|
||||||||
|
Operating income
|
4 235
|
775
|
34
|
-6
|
-141
|
4 897
|
5 575
|
||||||||
|
Income before taxes
|
3 839
|
775
|
34
|
-6
|
-87
|
4 555
|
5 348
|
||||||||
|
Income taxes 5
|
-683
|
-153
|
-6
|
-1
|
82
|
-761
|
-866
|
||||||||
|
Net income
|
3 156
|
|
|
|
|
3 794
|
4 482
|
||||||||
|
Attributable to:
|
|
|
|
|
|
|
|
||||||||
|
Shareholders of Novartis AG
|
3 156
|
|
|
|
|
3 794
|
4 479
|
||||||||
|
Non-controlling interests
|
0
|
|
|
|
|
0
|
3
|
||||||||
|
Basic EPS (USD) 6
|
1.65
|
|
|
|
|
1.99
|
2.28
|
||||||||
|
|
|||||||||||||||
|
The following are adjustments to arrive at core gross profit
|
|
|
|
|
|
|
|
||||||||
|
Cost of goods sold
|
-3 459
|
694
|
|
|
21
|
-2 744
|
-2 503
|
||||||||
|
|
|||||||||||||||
|
The following are adjustments to arrive at core operating income
|
|
|
|
|
|
|
|
||||||||
|
Selling, general and administration
|
-3 140
|
|
|
1
|
2
|
-3 137
|
-3 057
|
||||||||
|
Research and development
|
-2 740
|
81
|
|
5
|
-50
|
-2 704
|
-2 302
|
||||||||
|
Other income
|
478
|
|
|
-129
|
-236
|
113
|
79
|
||||||||
|
Other expense
|
-428
|
|
34
|
117
|
122
|
-155
|
-227
|
||||||||
|
|
|||||||||||||||
|
The following are adjustments to arrive at core income before taxes
|
|
|
|
|
|
|
|
||||||||
|
Other financial income and expense
|
-50
|
|
|
|
54
|
4
|
46
|
||||||||
|
|
|||||||||||||||
|
1 Amortization of intangible assets: cost of goods sold includes the amortization of
currently marketed products intangible assets; research and development includes the
amortization of scientific infrastructure and technologies intangible assets
|
|||||||||||||||
|
2 Impairments: other expense includes impairment charges related to property, plant
and equipment
|
|||||||||||||||
|
3 Acquisition or divestment of businesses and related items, including integration charges:
selling, general and administration, research and development, other income and other
expense include integration cost charges; other income and other expense include also
transitional services fee income and expenses related to the Sandoz distribution and
adjustments to provisions; other income includes also a tax settlement income
|
|||||||||||||||
|
4 Other items: costs of goods sold, selling, general and administration, other income
and other expense include restructuring releases of provisions and charges related
to the company-wide rationalization of manufacturing sites and other net restructuring
charges and related items; costs of goods sold and research and development include
contingent consideration adjustments; other income and other expense include fair
value adjustments on financial assets; other income also includes divestment gains,
fair value adjustments on contingent consideration receivable and other items; other
financial income and expense includes the impact of IAS Standards 29 “Financial Reporting
in Hyperinflationary Economies” for subsidiaries operating in hyperinflationary economies
|
|||||||||||||||
|
5 Taxes on the adjustments between IFRS Accounting Standards and core results, for
each item included in the adjustment, take into account the tax rate that will finally
be applicable to the item based on the jurisdiction where the adjustment will finally
have a tax impact. Generally, this results in amortization and impairment of intangible
assets other than goodwill and acquisition-related restructuring and integration items
having a full tax impact. There is usually a tax impact on other items, although not
always for items arising from legal settlements in certain jurisdictions. Other items
include adjustments for the tax effects of intercompany transactions, including effects
of adjusting deferred income taxes resulting from temporary differences on intercompany
inventory transactions arising from the elimination of unrealized profit on consolidation
when the seller and buyer subsidiaries are subject to different tax rates. Due to
these factors and the differing effective tax rates in the various jurisdictions,
the tax on the total adjustments of USD 716 million to arrive at the core results
before tax amounts to a tax expense of USD 78 million and the average tax rate on
the total adjustments was 10.9% since the estimated full year core tax charge of
16.7% has been applied to the pre-tax income of the period.
|
|||||||||||||||
|
6 Core earnings per share (EPS) is calculated by dividing core net income attributable
to shareholders of Novartis AG by the weighted average number of shares outstanding
used in the basic EPS calculation in the reporting period.
|
|||||||||||||||
35
Non-IFRS measure Free cash flow
The following table is a reconciliation of the three major categories of the IFRS
Accounting Standards consolidated statements of cash flows to the non-IFRS measure
free cash flow:
First quarter
|
Q1 2026
|
Q1 2025
|
||||||||||||
|
(USD millions) |
IFRS
Accounting Standards cash flow |
Adjustments |
Free cash flow |
IFRS
Accounting Standards cash flow |
Adjustments |
Free cash flow |
|||||||
|
Net cash flows from operating activities
|
3 676
|
|
3 676
|
3 645
|
|
3 645
|
|||||||
|
Net cash flows (used in)/from investing activities 1
|
-11 736
|
11 390
|
-346
|
330
|
-584
|
-254
|
|||||||
|
Net cash flows from/(used in) financing activities 2
|
3 579
|
-3 579
|
0
|
-8 548
|
8 548
|
0
|
|||||||
|
Non-IFRS measure free cash flow
|
|
|
3 330
|
|
|
3 391
|
|||||||
|
1 With the exception of purchases of property, plant and equipment, all net cash flows
(used in)/from investing activities are excluded from the free cash flow.
|
|||||||||||||
|
2 Net cash flows from/(used in) financing activities are excluded from the free cash
flow.
|
|||||||||||||
The following table is a summary of the non-IFRS measure free cash flow:
First quarter
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Operating income
|
4 235
|
4 663
|
|||
|
Reversal of non-cash items and other adjustments
|
|
|
|||
|
Depreciation, amortization and impairments
|
1 208
|
1 195
|
|||
|
Change in provisions and other non-current liabilities
|
70
|
182
|
|||
|
Other
|
134
|
281
|
|||
|
Operating income adjusted for non-cash items
|
5 647
|
6 321
|
|||
|
Interest received
|
83
|
122
|
|||
|
Interest paid and other financial payments
|
-213
|
-253
|
|||
|
Income taxes paid
|
-787
|
-540
|
|||
|
Payments out of provisions and other net cash movements in non-current liabilities
|
-267
|
-237
|
|||
|
Change in inventories and trade receivables less trade payables
|
-652
|
-1 160
|
|||
|
Change in other operating cash flow items
|
-135
|
-608
|
|||
|
Net cash flows from operating activities
|
3 676
|
3 645
|
|||
|
Purchases of property, plant and equipment
|
-346
|
-254
|
|||
|
Non-IFRS measure free cash flow
|
3 330
|
3 391
|
|||
36
Additional information
Net debt
Condensed consolidated changes in net debt
First quarter
|
(USD millions)
|
Q1 2026
|
Q1 2025
|
|||
|
Net change in cash and cash equivalents
|
-4 558
|
-4 393
|
|||
|
Change in marketable securities, time deposits, financial debts and derivatives financial instruments
|
-11 582
|
-1 737
|
|||
|
Change in net debt
|
-16 140
|
-6 130
|
|||
|
Net debt at January 1
|
-21 947
|
-16 141
|
|||
|
Net debt at March 31
|
-38 087
|
-22 271
|
|||
Components of net debt
|
(USD millions) |
Mar 31,
2026 |
Dec 31,
2025 |
Mar 31,
2025 |
||||
|
Non-current financial debts
|
-37 447
|
-27 935
|
-21 666
|
||||
|
Current financial debts and derivative financial instruments
|
-7 617
|
-5 602
|
-7 801
|
||||
|
Total financial debts
|
-45 064
|
-33 537
|
-29 467
|
||||
|
Less liquidity
|
|
|
|
||||
|
Cash and cash equivalents
|
6 877
|
11 435
|
7 066
|
||||
|
Marketable securities, time deposits and derivative financial instruments
|
100
|
155
|
130
|
||||
|
Total liquidity
|
6 977
|
11 590
|
7 196
|
||||
|
Net debt at end of period
|
-38 087
|
-21 947
|
-22 271
|
||||
Share information
|
Mar 31,
2026 |
Mar 31,
2025 |
||||
|
Number of shares outstanding
|
1 908 091 965
|
1 959 253 908
|
|||
|
Registered share price (CHF)
|
120.86
|
97.84
|
|||
|
ADR price (USD)
|
152.75
|
111.48
|
|||
|
Market capitalization (USD billions) 1
|
288.5
|
218.0
|
|||
|
Market capitalization (CHF billions) 1
|
230.6
|
191.7
|
|||
|
1 Market capitalization is calculated based on the number of shares outstanding (excluding
treasury shares). Market capitalization in USD is based on the market capitalization
in CHF converted at the quarter end CHF/USD exchange rate.
|
|||||
37
Effects of currency fluctuations
Principal currency translation rates
|
(USD per unit) |
Average rates Q1 2026 |
Average rates Q1 2025 |
Period-end
rates Mar 31, 2026 |
Period-end
rates Mar 31, 2025 |
|||||
|
1 CHF
|
1.277
|
1.112
|
1.251
|
1.137
|
|||||
|
1 CNY
|
0.144
|
0.137
|
0.145
|
0.138
|
|||||
|
1 EUR
|
1.171
|
1.052
|
1.147
|
1.084
|
|||||
|
1 GBP
|
1.348
|
1.259
|
1.321
|
1.297
|
|||||
|
100 JPY
|
0.638
|
0.656
|
0.626
|
0.671
|
|||||
|
100 RUB
|
1.274
|
1.074
|
1.227
|
1.177
|
|||||
Currency impact on key figures
The following table provides a summary of the currency impact on key Company figures
due to their conversion into US dollars, the Company’s reporting currency, of the
financial data from entities reporting in non-US dollars. Constant currency (cc) calculations
apply the exchange rates of the prior year period to the current period financial
data for entities reporting in non-US dollars.
First quarter
|
Change in USD % Q1 2026 |
Change in
constant currencies % Q1 2026 |
Percentage
point currency impact Q1 2026 |
|||||
|
Net sales to third parties
|
-1
|
-5
|
4
|
||||
|
Operating income
|
-9
|
-11
|
2
|
||||
|
Net income
|
-13
|
-13
|
0
|
||||
|
Basic earnings per share (USD)
|
-10
|
-11
|
1
|
||||
|
Core operating income
|
-12
|
-14
|
2
|
||||
|
Core net income
|
-15
|
-17
|
2
|
||||
|
Core basic earnings per share (USD)
|
-13
|
-15
|
2
|
||||
|
|
|
|
|||||
|
|
|||||||
38
Disclaimer
This communication contains forward-looking statements within the meaning of the United
States Private Securities Litigation Reform Act of 1995, that can generally be identified
by words such as “expected,” “anticipated,” “can,” “will,” “continue,” “ongoing,”
“growth,” “launch,” “expanded,” “deliver,” “accelerate,” “guidance,” “outlook,” “priority,”
“potential,” “momentum,” “on track,” “look forward,” or similar expressions, or by
express or implied discussions regarding: potential new products, potential new indications
for existing products, potential product launches or potential future revenues from
any such products; or results of ongoing clinical trials; potential future, pending
or announced transactions; potential future sales or earnings; strategy, plans, expectations
or intentions, including discussions regarding our continued investment into new R&D
capabilities and manufacturing; our capital structure. You should not place undue
reliance on these statements. Such forward-looking statements are based on the current
beliefs and expectations of management regarding future events and are subject to
significant known and unknown risks and uncertainties. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those set forth in the forward-looking statements.
There can be no guarantee that the investigational or approved products described
in this communication will be submitted or approved for sale or for any additional
indications or labeling in any market, or at any particular time. Nor can there be
any guarantee that such products will be commercially successful in the future. Neither
can there be any guarantee that the expected benefits or synergies from the transactions
described in this communication will be achieved in the expected timeframe, or at
all. In particular, our expectations could be affected by, among other things, uncertainties
concerning: global healthcare cost containment, including ongoing government, payer
and general public pricing and reimbursement pressures and requirements for increased
pricing transparency; the success of key products, commercial priorities and strategy;
the research and development of new products, including clinical trial results and
additional analysis of existing clinical data; our ability to obtain or maintain proprietary
intellectual property protection, including the ultimate extent of the impact on Novartis
of the loss of patent protection and exclusivity on key products; our ability to realize
the strategic benefits, operational efficiencies or opportunities expected from our
external business opportunities; the development or adoption of new technologies,
including artificial intelligence, and new business models; the implementation of
our new IT projects and systems; potential significant breaches of information security
or disruptions of our information technology systems; actual or potential legal proceedings,
including regulatory actions or delays or government regulation related to the products
and pipeline products described in this communication; safety, quality, data integrity,
or manufacturing issues; our performance on and ability to comply with environmental,
social and governance measures and requirements; major macroeconomic and geo- and
socio-political developments, including the impact of any potential tariffs on our
products or the impact of war in certain parts of the world; future global exchange
rates; future demand for our products; and other risks and factors referred to in
Novartis AG’s most recently filed Form 20-F and in subsequent reports filed with,
or furnished to, the US Securities and Exchange Commission. Novartis is providing
the information in this communication as of this date and does not undertake any obligation
to update any forward-looking statements as a result of new information, future events
or otherwise.
All product names appearing in italics are trademarks owned by or licensed to Novartis.
About Novartis
Novartis is an innovative medicines company. Every day, we work to reimagine medicine
to improve and extend people’s lives so that patients, healthcare professionals and
societies are empowered in the face of serious disease. Our medicines reach more than
300 million people worldwide.
Reimagine medicine with us: Visit us at https://www.novartis.com and connect with us on LinkedIn, Facebook, X and Instagram.
Novartis will conduct a conference call with investors to discuss this news release
today at 14:00 Central European time and 8:00 Eastern Time. A simultaneous webcast of the call for investors
and other interested parties may be accessed by visiting the Novartis website. A replay
will be available after the live webcast by visiting https://www.novartis.com/investors/event-calendar.
Important dates
July 21, 2026
Second quarter & half year 2026 results
October 27, 2026
Third quarter & nine months 2026 results
November 18-19, 2026
Meet Novartis Management 2026 (London, UK)
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