Novartis Q2 2025 Earnings: Can Growth Drivers Outweigh Risks?

Novartis (NVS) is set to report Q2 2025 results on July 17, a critical juncture for investors weighing its $27.3% year-to-date (YTD) outperformance against looming headwinds. The pharma giant's ability to sustain momentum hinges on the performance of its star drugs—Entresto, Kisqali, and Pluvicto—while navigating generic competition and the strategic value of its recent Regulus acquisition. Here's what to watch.

Key Drivers: Growth Engines at Full Throttle?

1. Entresto (Cardiovascular): Asia's Role in $2.3B Sales

Entresto's hypertension indication has propelled it to become Novartis' top seller, with Q2 estimates hovering near $2.3 billion. Strong demand in China and Japan—markets where Novartis has expanded access—will be key. Analysts highlight its potential to reduce cardiovascular mortality by 20%, positioning it as a cornerstone of Novartis' cardiovascular-renal-metabolic focus.

2. Kisqali (Breast Cancer): Expanding into Early-Stage Markets

Kisqali's Q2 sales are expected to hit $1.0–1.1 billion, fueled by its recent U.S. approval for early-stage breast cancer (eBC). This indication, supported by the NCCN Guidelines, opens a broader patient pool. With 1 in 8 U.S. women facing breast cancer, Kisqali's penetration here could rival Roche's Kadcyla. However, competition from Pfizer's Ibrance remains fierce.

3. Pluvicto (Prostate Cancer): FDA Approval Spur Growth

Pluvicto's Q2 sales are projected at $410–411 million, a 25% jump from Q1. The FDA's April 2024 approval for pre-chemotherapy use expanded its eligible patient base, and Novartis is leveraging this to push into earlier lines of treatment. With 175,000 U.S. prostate cancer cases annually, Pluvicto's success hinges on rapid adoption.

Risks: Generic Threats and Regulatory Crosswinds

1. Generic Competition: Tasigna and Lucentis Under Siege

Generic versions of Tasigna (for leukemia) and Lucentis (for wet AMD) are eroding sales. While Q1 2025 core operating income rose 27%, these headwinds could drag margins lower in Q2. Investors should scrutinize management's guidance on mitigating these losses.

2. Regulus Acquisition: Farabursen's Pivotal Phase 3

The $1.7 billion Regulus deal adds farabursen, a potential first-in-class therapy for autosomal dominant polycystic kidney disease (ADPKD). While Phase 1b data showed reduced kidney cyst growth, the Q3 2025 Phase 3 trial is critical. Failure here could negate the acquisition's value and spook investors.

Zacks' Caution vs. Novartis' Beat History: A Paradox?

The Zacks model's Earnings ESP of -0.28% and neutral “Buy” rank (#2) reflect skepticism about Q2's ability to repeat its 7.55% Q1 beat. Yet, Novartis has beaten estimates in 4/4 quarters with an average 7.12% surprise. This gap likely stems from the model's reliance on static inputs versus Novartis' dynamic pipeline and geographic expansion.

Investment Takeaway: Hold for Now, Buy on a Beat

Novartis' YTD outperformance (vs. 1.8% industry gains) is justified if Q2 results hit or exceed $14.04 billion in revenue and $2.38 EPS. A strong showing in Entresto/Kisqali and Pluvicto's momentum could validate its innovation strategy. However, investors should wait for clarity on Regulus' Phase 3 and generic impacts before doubling down.

Bottom Line: Novartis remains a buy candidate if Q2 confirms its growth trajectory. Until then, hold positions while monitoring execution on its key drivers—and brace for volatility if farabursen falters.