Novartis CEO Addresses Psoriasis Drug Sales, China Growth, Tariffs and M&A Amid Finance Chief's Retirement

Novartis AG reported disappointing sales for its key psoriasis drug and the impending retirement of its respected finance chief, overshadowing a modest outlook raise. CEO Vasant Narasimham discussed these topics and the impact of tariffs with Bloomberg's Scarlet Fu.

Swiss pharmaceutical giant Novartis AG (NVS) reported mixed second-quarter (Q2) 2025 results, with strong sales growth in key therapeutic areas offset by a disappointing performance in its psoriasis drug Cosentyx. The company also announced significant strategic changes, including the retirement of its long-serving CFO and the initiation of a substantial share buyback program.

Sales and Earnings Performance

Novartis reported revenues of $14.05 billion for Q2 2025, a 12% year-over-year increase, driven by strong performance in its key therapeutic areas. Core operating income climbed 20% to $5.93 billion, with earnings per share (EPS) of $2.42, beating the Zacks Consensus Estimate of $2.38 [1].

Key Drug Performances

- Cosentyx (psoriasis, spondylitis, and arthritis) sales increased 6% to $1.6 billion, falling short of the Zacks Consensus Estimate of $1.7 billion and the model estimate of $1.8 billion [1].
- Kisqali (breast cancer) sales surged 64% to $1.2 billion, exceeding both the Zacks Consensus Estimate and the model estimate of $1.1 billion [1].
- Entresto (heart failure and hypertension) sales rose 22% to $2.36 billion, comfortably beating the Zacks Consensus Estimate of $2.34 billion and the model estimate of $2.23 billion [1].
- Pluvicto (prostate cancer) sales soared 30% to $454 million, outpacing the Zacks Consensus Estimate and the estimate of $410 million [1].

Strategic Changes and Outlook

Novartis announced the retirement of Harry Kirsch, who has served as its CFO since 2013. Mukul Mehta will succeed Kirsch, who will continue in his role until March 15, 2026. Additionally, the company initiated a share buyback program of up to $10 billion to be completed by 2027 [2].

CEO Vas Narasimhan discussed these topics with Bloomberg's Scarlet Fu, emphasizing the company's commitment to balanced capital allocation and its strategic focus on mid- and long-term growth. The company also raised its full-year earnings forecast, reflecting its confidence in the performance of its pipeline and the impact of recent label expansions.

Impact of Tariffs

The company is also navigating the potential impact of tariffs in the United States, which could affect its manufacturing costs and supply chain. In response, Novartis has announced a $23 billion investment over five years to manufacture key drugs in the U.S. [1].

Conclusion

Despite the mixed Q2 results, Novartis demonstrated strong organic growth in key therapeutic areas and raised its full-year earnings forecast. The strategic changes, including the retirement of its CFO and the initiation of a share buyback program, reflect the company's commitment to balanced capital allocation and long-term growth. Investors should closely monitor the company's performance in the face of potential headwinds from generic competition and tariffs.

References

[1] https://finance.yahoo.com/news/novartis-beats-q2-earnings-sales-134000826.html
[2] https://finance.yahoo.com/news/novartis-trims-operating-income-outlook-124606622.html