Novartis profit falls 70% on $1.9 billion drug write-down, outlook raised

Third-quarter figures

Novartis reported on Tuesday, 27 October 2026 that third-quarter net sales rose 4% to $14.52 billion, while operating income fell 59% to $1.8 billion. Net income dropped 70% to $1.2 billion, and earnings per share came in at $0.63, down 69%. The Basel-based company blamed the decline mainly on higher research and development spending, including a partial impairment of $1.9 billion on del-desiran, and on higher other expenses, which were partly offset by the sales increase.

Core operating income, which excludes special items, reached $6.04 billion and was up on a year earlier. That figure beat the $5.6 billion analyst consensus compiled by the AWP agency. The company said the quarter showed renewed momentum after sales had declined in the first quarter and returned to growth in the second.

Net sales14.52

Core operating income6.04

Operating income1.8

Net income1.2

Net sales

14.52 USD billion

Core operating income

6.04 USD billion

Operating income

1.8 USD billion

Net income

1.2 USD billion

Data from the article text

Del-desiran setback

Del-desiran was being tested for myotonic dystrophy, a muscle-wasting disease with no approved treatments. Novartis obtained the drug through its $12 billion acquisition of Avidity. Trial setbacks in September sent the shares tumbling, and the company lost nearly $30 billion in market value after the underwhelming trial updates. Artisan Partners, one of Novartis's top 20 shareholders, called in September for a shake-up of the board to improve corporate governance.

In its quarterly statement, Novartis said the del-desiran results did not turn out as hoped in myotonic dystrophy type 1, but that the data pointed to clinical efficacy. The company said it is now examining the further development of the drug.

Management response

CEO Vas Narasimhan said the setbacks were part of drug development and that some investors had overreacted. Speaking on a call with journalists, he said the company remained happy with the Avidity deal, which also brought other experimental drug candidates.

“We don't need to change our M&A strategy”

Narasimhan's comments came as the company raised its full-year guidance for core operating income to low single-digit growth. Previously it had expected a low single-digit decline. The forecast for low single-digit net sales growth was kept unchanged.

Product sales

Growth came from cancer and multiple sclerosis drugs. Kisqali, a breast cancer medicine, rose 37% to $1.82 billion, while Pluvicto, Scemblix and Kesimpta also posted strong gains. Entresto, once a key seller, fell 38% to $1.17 billion as cheaper generic versions gained ground in the United States. Entresto, Promacta and Tasigna all lost their patent protection last year, and the company had said earlier that the generic erosion was likely to have peaked.

Kisqali1.82

Entresto1.17

Kisqali

1.82 USD billion

Entresto

1.17 USD billion

Data from the article text

Outlook

Novartis is keeping its forecast for low single-digit net sales growth for the full year, while its core operating income outlook has been moved up. The company's results show that its generic erosion is easing, even as the del-desiran write-down weighs on net profit for the quarter.