Novartis AG Reports Strong Q2 2025 Earnings

Novartis AG ((NVS)) has held its Q2 earnings call. Read on for the main highlights of the call.

In the recent earnings call, Novartis AG reported a strong quarter, marked by robust sales and operating income growth. The positive sentiment was driven by the impressive performance of key products such as Kisqali, Kesimpta, and Leqvio. The company also announced new buyback programs and continued advancements in its pipeline. However, challenges like Cosentyx’s moderated growth, a slowdown in China, and potential generic threats in the U.S. were highlighted as areas of concern.

Strong Sales and Operating Income Growth

Novartis reported an impressive 11% increase in sales in constant currency, accompanied by a 21% rise in core operating income for Q2 2025. This growth underscores the company’s strong financial performance and operational efficiency.

Kisqali’s Robust Performance

Kisqali demonstrated remarkable growth, with a 64% increase in the quarter. It achieved TRx leadership in metastatic breast cancer and saw a 100% sales increase in the U.S. during Q2, highlighting its strong market presence.

New Buyback Program

The company announced a significant new share buyback program, valued at up to $10 billion, which is targeted for completion by the end of 2027. This move reflects Novartis’s confidence in its financial stability and commitment to returning value to shareholders.

Kesimpta’s Growth Trajectory

Kesimpta continued its growth trajectory with a 33% increase in the quarter. The demand for this self-administered B-cell therapy for multiple sclerosis remains strong, contributing positively to the company’s portfolio.

Leqvio’s Strong Growth

Leqvio experienced a 61% growth in the quarter, driven by its performance in the U.S. lipid-lowering market and strong growth in China. This product’s success is a testament to Novartis’s strategic market positioning.

Scemblix’s Expansion

Scemblix saw a 79% growth in constant currency and is on track to exceed $1 billion in sales. Its growing momentum in early lines indicates a promising future for this product.

Cosentyx Growth Moderation

Cosentyx’s growth moderated to 6% in Q2, facing challenges from new competitors and pricing impacts from new indications. This moderation highlights the competitive pressures in the market.

China Market Slowdown

The pharmaceutical spending growth in China has notably slowed down, affecting brands like Cosentyx and Entresto. This slowdown poses a challenge for Novartis’s growth in the region.

U.S. Generic Threats

Novartis is facing ongoing regulatory and IP litigation for Entresto in the U.S., with potential mid-2025 generic entry that could impact financial forecasts. This situation underscores the competitive and regulatory challenges in the U.S. market.

Healthcare Spending Constraints

Broader-based healthcare spending tightening in China is impacting Novartis’s portfolio growth. This constraint reflects the broader economic challenges affecting the pharmaceutical industry in the region.

Forward-Looking Guidance

Novartis provided an optimistic forward-looking guidance, with an upgrade in full-year 2025 bottom-line expectations. The company anticipates continued growth, driven by key products and successful brand launches. The guidance for core operating income was raised to low teens, with core EPS up 24% to $2.42. Additionally, the company’s free cash flow increased by 46% in the first half of 2025, supporting the new $10 billion share buyback program.

In summary, Novartis AG’s earnings call reflected a strong quarter with significant sales and income growth. While the company faces challenges in certain markets, its strategic initiatives and robust product performance provide a positive outlook. The new buyback program and upgraded guidance further emphasize Novartis’s confidence in its future growth and financial health.