Novartis Trading Volume Surges 61.45% to 3.34 Billion, Stock Price Drops 2.19% as Generic Competition Looms, Ranking 278th in Daily Trading

On July 11, 2025, Novartis (NVS) saw a significant increase in trading volume, with a turnover of 3.34 billion, marking a 61.45% rise from the previous day. This surge placed Novartis at the 278th position in the day's trading rankings. However, despite the high trading volume, the stock price of Novartis declined by 2.19%.

Novartis faced a significant legal setback when the Delaware federal court rejected its attempt to block MSN Pharma's generic version of Entresto. This decision accelerates the erosion of Entresto's patent-protected monopoly, as the court ruled that MSN's formulation does not infringe on U.S. Patent No. 11,096,918. This patent had been used by Novartis to delay generic competition. The legal defeat, combined with the expiration of pediatric exclusivity on July 15, 2025, and the impending Medicare price caps under the Inflation Reduction Act (IRA), creates a challenging environment for Novartis.

Novartis' legal strategy against MSN Pharma involved filing a lawsuit in October 2022 after MSN's Abbreviated New Drug Application (ANDA) submission. The company aimed to extend Entresto's exclusivity by exploiting the Hatch-Waxman Act's “patent dance” provisions. However, the Delaware court's ruling in July 2025 exposed flaws in this strategy. The '918 patent, which Novartis argued covered the amorphous solid form of sacubitril-valsartan, was deemed inapplicable to MSN's crystalline formulation. This technical distinction in drug chemistry has significant financial implications.

The court's narrow interpretation of the patent highlights a broader vulnerability in pharmaceutical patent portfolios: overreliance on narrow, formulation-based claims. While Novartis won a partial victory on the '659 patent, covering treatment methods, this only delayed generic entry until July 16, 2025. The subsequent denial of a stay and the Federal Circuit's refusal to intervene further underscored that Novartis' legal options are exhausted.

The financial impact of generic entry and IRA price caps is substantial. Entresto accounted for 11% of Novartis' 2024 revenue, and its sales are projected to drop sharply once generics enter the market. Analysts estimate a 50–70% sales decline by 2026, with generic competition slashing prices to as low as $20–$30 per prescription—down from Entresto's current ~$500 price tag. The IRA adds another layer of threat, as Medicare will cap its share of drug costs at $2,000 annually for most high-priced medications starting in 2026. This combination of generic competition and price controls could reduce Entresto's peak sales by over $5 billion annually, significantly impacting Novartis' bottom line.

The investment thesis against Novartis is clear: short NVS if generics enter by late 2025, targeting a 20–30% downside by year-end. Key catalysts include the July 16, 2025 launch of MSN's generic, which will immediately trigger a supply chain shift to lower-cost generics, and the Q4 2025 earnings reports, where Novartis will likely report accelerating Entresto sales declines. Additionally, IRA negotiation deadlines by early 2026 will force Novartis to accept Medicare's terms, further squeezing margins. Investors should avoid complacency and consider shorting NVS ahead of Q4 2025, when the market will fully price in generic competition. For long-term investors, the post-2026 landscape may offer opportunities if Novartis can pivot to newer therapies. Until then, Entresto's decline is a one-way street.