Novartis Faces Patent Dispute Loss in Generic Drug Entresto Ruling

Novartis faces a setback in its bid to maintain market share for its heart failure medication, Entresto, after a Delaware court ruled in favor of MSN Pharmaceuticals, paving the way for a generic version. Analysts forecast an average price target of $113.55, suggesting a potential downside of 6.29%. The consensus recommendation is a "Hold" position, and the GF Value estimates a slight downside of 0.2% in the coming year.

A Delaware federal court has dealt a significant blow to Novartis (NYSE: NVS) by ruling in favor of MSN Pharmaceuticals, paving the way for the launch of a generic version of Novartis' blockbuster heart failure medication, Entresto. The ruling, issued on Friday, denied Novartis' request for an injunction that would have prevented MSN from launching its generic drug until after the patent's expiration in November 2026 [1].

Entresto, a combination therapy that combines two blood pressure-lowering drugs, generated more than $7.8 billion in global revenue in 2024. The court's decision could significantly impact Novartis' market share and revenue in the United States, where the generic drug is expected to cut into Entresto's sales [1].

Analysts have forecast an average price target of $113.55 for Novartis, suggesting a potential downside of 6.29% from the current price of $121.68. The consensus recommendation from brokerage firms is a "Hold" position, indicating a cautious stance on the company's stock [2]. GuruFocus estimates a slight downside of 0.2% in the coming year, with the GF Value for Novartis AG (NVS) estimated at $120.02 [3].

Novartis, a Swiss multinational pharmaceutical corporation, has been facing challenges in maintaining its market share for Entresto due to generic competition. In January, another Indian drugmaker, Lupin, received USFDA approval for its generic version of Entresto, further intensifying the competition [2]. Additionally, Novartis has been dealing with potential pricing pressures in Europe and concerns about the impact of potential US policy changes on its financial performance [3].

The court's decision marks a significant setback for Novartis, but the company has indicated that it plans to appeal the ruling. This legal battle is part of a broader trend of increasing generic competition in the pharmaceutical industry, which could lead to lower prices and increased accessibility for patients but may also impact the profitability of drugmakers like Novartis.

References:

[1] https://seekingalpha.com/news/4466900-novartis-loses-patent-challenge-block-generic-entresto

[2] https://medicaldialogues.in/news/industry/pharma/novartis-loses-legal-battle-to-block-us-entresto-generic-until-2026-151552

[3] https://www.gurufocus.com/news/2966379/novartis-nvs-secures-exclusive-option-on-sironaxs-brain-delivery-technology-nvs-stock-news