Novartis core operating income rises, 2026 outlook raised

Novartis core operating income rose 10% at constant exchange rates in the third quarter of 2026, and the company raised its 2026 guidance for that measure. Net sales reached USD 14.5 billion, up 4%, and the core operating margin widened to 41.6%. Reported operating income fell 59% to USD 1.8 billion, mainly because of a partial impairment of USD 1.9 billion on the in-process research and development asset Del-Desiran.

Novartis core operating income outlook for 2026

Novartis now expects core operating income to be flat to grow at a low single-digit rate in 2026, up from an earlier outlook of a low single-digit decline. Net sales guidance is unchanged at low single-digit growth. Over the first nine months, net sales were flat and core operating income fell 2%, both at constant exchange rates. If exchange rates hold at end-October levels, the company expects a positive currency effect of 1 percentage point on both net sales and core operating income for the year.

Why it matters

Volume gains added 14 percentage points to third-quarter net sales growth, while generic competition subtracted 9 points and pricing subtracted 1. Priority brands drove the growth: Kisqali rose 37% at constant exchange rates, Scemblix 67% and Leqvio 63%. Remibrutinib met the primary endpoint in the REMODEL-1 and REMODEL-2 Phase III trials in relapsing multiple sclerosis. Del-Desiran missed its primary endpoint (video hand-opening time) versus placebo in the HARBOR Phase III study in myotonic dystrophy type 1. The impairment sits in operating income, not net sales, which still rose 4%. Net debt rose to USD 37.4 billion at 30 September 2026 from USD 21.9 billion at the end of 2025. Net cash outflows of USD 16.7 billion for M&A and other acquisitions, the USD 9.1 billion annual dividend and USD 4.8 billion of share buybacks outweighed USD 14.0 billion of free cash flow.