Novartis Growth to Slow in Second Half as Patent Expirations Loom

Novartis's growth is expected to slow in the second half due to patent expirations. Berenberg analysts recommend increasing business development to offset generic erosion and achieve a sales growth target of at least 5% by 2029. Despite its low US exposure and share buyback, Novartis's growth is likely to slow.

Novartis has announced a significant slowdown in growth for the second half of 2025, primarily due to patent expirations. The Swiss pharmaceutical giant reported a 12% year-on-year increase in net sales to $14.05 billion for the second quarter of 2025, but this growth is expected to decelerate in the coming quarters [2].

The company's strong financial position, evidenced by a robust balance sheet and diversified pipeline, has been a key factor in its recent success. However, the expiration of patents on key products like Entresto, Novartis' best-selling drug, is set to impact its revenue. Sales of Entresto, which recorded $2.36 billion in Q2 2025, are expected to see a significant drop due to generic competition [2].

Berenberg analysts have recommended that Novartis increase its business development efforts to offset the generic erosion and achieve a sales growth target of at least 5% by 2029. Despite its low US exposure and ongoing share buyback program, the company's growth is likely to slow due to the patent expirations [2].

Novartis' share buyback program, which aims to repurchase up to $10 billion worth of its own shares by the end of 2027, is a testament to the company's confidence in its future prospects and its ability to return value to shareholders. However, the analysts suggest that the company should focus more on strategic acquisitions and partnerships to bolster its growth [1].

The company's recent focus on radioligand therapy and gene therapies, such as Pluvicto and Zolgensma, has shown promise. Sales of Pluvicto grew 32% year over year to $454 million in Q2 2025, driven by an expanded indication approval for earlier-line PSMA-positive metastatic castration-resistant prostate cancer. However, the impact of these new therapies on overall growth remains to be seen [2].

In conclusion, Novartis faces challenges in the coming quarters due to patent expirations. The company's strong financial position and diversified pipeline provide a solid foundation for growth. However, the analysts' recommendation to increase business development efforts suggests that the company should consider strategic acquisitions and partnerships to offset the impact of generic competition and achieve its sales growth targets.

References:
[1] https://www.gurufocus.com/news/2983392/novartis-nvs-announces-10-billion-share-buyback-plan-nvs-stock-news
[2] https://www.precisionmedicineonline.com/precision-oncology/novartis-lifts-full-year-forecast-amid-strong-performances-kisqali-pluvicto-q2