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Innovative Medicines Powerhouse Navigating a Large Patent Cliff

By Nathan Brinkman 

Novartis AG is a Basel, Switzerland-headquartered global pharmaceutical corporation and one of the largest innovative medicines companies in the world by revenue. Founded in 1996 through the merger of Ciba-Geigy and Sandoz, Novartis completed its transformation into a pure-play innovative medicines company in October 2023 when it spun off its generics and biosimilars division, Sandoz, as a separately listed entity on the SIX Swiss Exchange. Today, Novartis operates exclusively within branded, patent-protected innovative medicines.

The company is organized around four core therapeutic areas: Cardiovascular-Renal-Metabolic (CRM), Immunology, Neuroscience, and Oncology. These are supported by two established technology platforms (small molecule chemistry and biotherapeutics) and three emerging platforms that represent the future of the pipeline: Gene & Cell Therapy, Radioligand Therapy (RLT), and xRNA (extended RNA) — the last of which was significantly strengthened by the February 2026 acquisition of Avidity Biosciences.

Novartis reported FY 2025 net sales of $54.5 billion (+8% YoY), core operating income of $21.9 billion at a 40.1% core margin, and free cash flow of $17.6 billion. These figures establish it as one of the top 5 pharmaceutical companies globally by revenue. The Board proposed a dividend of CHF 3.70 per share for 2025 — the 29th consecutive annual increase since the company was created in December 1996.

CEO Vas Narasimhan has articulated three strategic priorities: (1) Accelerate Growth — through high-value new medicine launches and pipeline execution; (2) Deliver Returns — through operational excellence and shareholder-focused capital allocation; and (3) Strengthen Foundations — through people, data science, and institutional trust. Novartis has guided to a 5-6% net sales CAGR from 2025 to 2030, even as it absorbs what management has described as the largest single patent expiry in company history — the US generic entry of Entresto.

How is Novartis planning on navigating this patent cliff?