The Entresto Exclusivity Cliff: A Heart Attack for Novartis or a New Beat for Generics?

The cardiovascular drug market is about to face a seismic shift as Novartis' blockbuster heart failure treatment, Entresto, loses its patent exclusivity. With generics poised to flood the market post-July 16, 2025, investors must parse through legal battles, pricing pressures, and strategic pivots to determine where to place their bets. Let's dissect the risks and opportunities in this high-stakes drama.

The Exclusivity Cliff and Revenue Risk

Entresto is Novartis' cash cow, generating over $5.6 billion in revenue in the first nine months of 2024—19% of total sales. Analysts project a 50–70% sales decline by 2026 as generics undercut prices by 70–90%. Margins will take a direct hit: Entresto's high profit margins (estimated at 70–80%) are unsustainable once generics enter. already reflects this fear, with shares dropping 2% after recent court rulings.

The Generics' March: Timing is Everything

Generics like MSN's Novadoz have FDA approval but are legally barred from launching until patent and trade dress cases resolve. The July 16, 2025, deadline hinges on two battles:
1. Patent 11,096,918 (expires Nov 2026): The Federal Circuit ruled that Novartis failed to prove infringement by MSN's formulation. Yet Novartis is appealing, seeking to delay generics until 2027.
2. Trade Dress Lawsuit: A preliminary injunction blocked Novadoz due to its pill design resembling Entresto. If upheld, generics must redesign packaging—a delay tactic but not a barrier to eventual entry.

The Inflation Reduction Act (IRA) adds urgency: Entresto's Medicare prices will be capped starting in 2026, squeezing margins even if exclusivity lasts longer.

Legal Battles: Patent vs. Trade Dress

• Patent Validity: The '659 patent (covering the drug's combination) was upheld in January 2025, but the '918 patent (solid form) remains under dispute. A final ruling is expected by late 2025, with generics likely entering by mid-2026.
• Trade Dress: Courts are split on whether pill design can be trademarked. If Novartis wins, generics must alter packaging—a minor hurdle but a PR win for brand loyalty.

Strategic Options for Novartis: Fight or Pivot?

1. Price Cuts: To retain share, Novartis might slash prices preemptively—though this erodes margins.
2. R&D Shifts: The company is doubling down on gene therapies and oncology drugs, aiming to offset Entresto's decline. Pipeline candidates like gene-edited CAR-T therapies could be the next growth drivers.
3. Legal Defense: Prolonging exclusivity via appeals could buy time, but costs will mount.

Investment Thesis: Short NVS or Bet on Generics?

• Short Novartis (NVS): If generics hit the market in 2025, revenue will crater. The stock's forward P/E of 12x already factors in some downside, but a 50% sales drop could push it lower.
• Buy Generics: Firms like Alembic (ALB) and MSN Pharmaceuticals stand to gain. shows muted gains thus far, but a post-July launch could trigger a surge.

Final Verdict: A Volatile Near-Term, but Generics Win Long-Term

The next six months will be volatile for Novartis as courts decide Entresto's fate. Investors should:
- Short NVS if generics enter by Q2 2026.
- Buy generics if patent/trade dress delays stall competition beyond 2026.

Long-term, the cardiovascular market will shift toward generics and cheaper alternatives. Novartis' survival hinges on its pipeline—and whether its new therapies can pump up profits as Entresto's heart stops beating.

This is a high-risk, high-reward moment. Stay tuned to the courts—and keep your pulse on these stocks.