Novartis Raises Core Profit Guidance as $2.2 Billion of Trial Charges Hit Reported Earnings

Novartis raised its full-year core profit guidance on Oct. 27, 2026, after core earnings beat expectations in a quarter marked by $2.2 billion of trial-setback charges.

Novartis reported third-quarter results on Oct. 27, 2026 for the period ended Sept. 30. Net sales were $14.52 billion, up 4% in constant currency and in dollars.

Core operating income was $6.04 billion, up 10% at constant currency. Core results strip out impairments and other items the company treats as exceptional.

The core figure beat the $5.61 billion consensus estimate provided by Visible Alpha. Core earnings per share were $2.46, up 8% at constant currency.

Free cash flow was $5.1 billion, down 18% from a year earlier. Reported results told a very different story, because the charges sit outside core profit.

Operating income fell 61% at constant currency, to $1.84 billion. Net income fell 70% in dollars to $1.196 billion, from $3.93 billion a year earlier.

Reported earnings per share were $0.63, down from $2.04. The distance between the core and reported lines is the quarter's trial-setback charges.

Guidance raised for core profit, held for sales

For the full year, core operating income is now expected to be in line with last year to up by a low single-digit percentage.

The company had previously guided to a low single-digit decline, at constant currency. That is a raise, not a trim, and it reverses the direction of the guide.

Net sales guidance was unchanged. Novartis still expects low single-digit sales growth for 2026, at constant currency.

"Novartis delivered solid sales growth in Q3, as priority brands and launches more than offset generic erosion," Chief Executive Vas Narasimhan said. He credited productivity efforts alongside sales growth.

Priority brands did the heavy lifting

Kisqali sales rose 37% at constant currency to $1.82 billion. It was the largest single contributor to the quarter's sales growth.

Kesimpta, the multiple-sclerosis treatment, rose 22% to $1.48 billion. Scemblix rose 67% to $593 million, and Leqvio rose 63% to $506 million.

Cosentyx rose 9% to $1.86 billion, the largest brand by sales. Pluvicto rose 20% to $674 million.

Entresto moved the other way, falling 38% to $1.17 billion. Generic competition cut nine percentage points from group sales growth, while volume added fourteen points.

Two September setbacks cost about $2.2 billion

The charges stem from two late-stage trial failures disclosed in September. Both programs had been counted on to support the company's midterm growth outlook.

Del-desiran took a $1.9 billion partial impairment charge in the quarter. The drug came from Novartis's $12 billion acquisition of Avidity Biosciences, announced in 2025.

Reuters reported the asset's value was cut from an original $7.48 billion on development delays. An impairment is an accounting write-down of that value, not a cash payment.

In the Phase III HARBOR study, del-desiran missed its main goal in myotonic dystrophy type 1, a muscle-wasting disease. Novartis saw clinical activity in secondary measures and is evaluating the full dataset.

Pelacarsen was written off in full, for a $300 million charge. Its Phase III HORIZON trial missed its goal of cutting cardiovascular events in patients with elevated Lp(a), an inherited cholesterol-related risk factor.

Chief Financial Officer Mukul Mehta said the company still believes del-desiran will succeed, per Reuters. Pelacarsen, by contrast, was completely written off after its trial failure.

"We don't need to change our M&A strategy," Narasimhan said, per Reuters. He called the setbacks part of drug development and some of the market reaction an overreaction.

Remibrutinib delivered the offsetting win

Remibrutinib met its main goal in the Phase III REMODEL-1 and REMODEL-2 trials in relapsing multiple sclerosis. It cut the annualized relapse rate significantly versus teriflunomide, an established oral treatment.

The drug also beat teriflunomide on every key secondary measure, including MRI lesion reduction. Novartis reported a clinically meaningful delay in disability progression and no liver safety signal.

Remibrutinib is already approved as Rhapsido in chronic hives indications. These are trial results in multiple sclerosis, not an approval, and regulators have not acted on them.

Narasimhan told reporters the results, added to the approved skin uses and trials still running, could make remibrutinib the largest medicine in Novartis's history, per Dow Jones. That is the chief executive's assessment, not a sales forecast.

One remibrutinib program did end in the quarter. Novartis stopped its Phase III study in generalized myasthenia gravis after a futility analysis, with no safety concerns identified.

Shares rose on the print

Novartis shares were trading up 1.5% at 10:40 GMT on Oct. 27, in Reuters' snapshot. That is a single labeled snapshot of the Swiss listing, not a closing price.

What remains unknown

What remains unknown is del-desiran's development path. Novartis is still evaluating the HARBOR data and has not said whether the program advances, changes, or stops.

Also unknown is the filing path for remibrutinib in multiple sclerosis. Novartis has given no submission date, and approval would be a regulator's decision.

Readers should watch the Feb. 3, 2027 full-year results for the first 2027 guidance. They should also watch whether core profit lands inside the new in-line-to-low-single-digit range.