DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Read our full disclaimer, here.

Falling Down the Cliff Faster than the Pipeline Can Save It?

By Nathan Brinkman

When initiating coverage on Novartis, I flagged the Entresto patent expiry as an important short term catalyst. That became even more evident in Q1 - 2026 as net sales of $13.1 billion fell 5% in constant currency. US generic erosion from Entresto, Promacta, and Tasigna combined to overwhelm growth from the newer growing brands. Headline earnings declined across the board. However, beneath the surface, Kisqali grew 55%, Pluvicto 70%, Leqvio 69%, Scemblix 79% — and the pipeline delivered a string of milestones in Q1 that may de-risk the 2027–2030 growth outlook.

Management reaffirmed full-year guidance and indicated that Q1 2026 is not a business deteriorating, it is a business going through a planned transition. The question is will NVS fall faster down the cliff, before the next wave of growth arrives.