NVSBy Calypso Research8 min read

Novartis AG (NVS) Q4 2025 Earnings Analysis

Novartis Stirs Up a 2% Rise Despite $13.3B Liver Logic

Key Takeaways

Novartis AG (NVS) reported Q4 2025 earnings with revenue of $13.3B, representing a -1.6% year-over-year change. The stock moved +2.0% on earnings day.

The bull case: A diversified growth engine across oncology, immunology, cardiovascular and gene therapy, underpinned by disciplined cost control and a deep late-stage pipeline (remibrutinib, pelacarsen, ianalumab, Lp(a) and renal assets), supports sustained mid-single-digit sales CAGR and a return to 40%+ margins with upside from successful readouts.

The bear case: Heavy near-term investment (Avidity, launches), major LOEs, policy risks like MFN, and pivotal trial uncertainties in key programs such as pelacarsen and remibrutinib could compress margins, cap growth and expose Novartis to downside if multiple late-stage assets underdeliver on efficacy or safety expectations.

Financial Highlights

  • Revenue: $13.3B (-1.6% YoY)
  • Gross Profit: $9.8B (73.4% margin, -2.0% YoY)
  • Operating Income: $3.5B (26.4% margin, +0.4% YoY)
  • Net Income: $2.4B
  • TTM Revenue: $56.1B

Stock Performance

  • Earnings Day Move: +2.0%
  • Year-to-Date: +18.9%
  • 1-Year Return: +50.8%
  • vs. S&P 500 (since earnings): +18.4%
  • vs. Nasdaq (since earnings): +21.8%

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What Management Said

Here are the key debates and direct quotes from Novartis AG's Q4 2025 earnings call:

Remibrutinib (BTK) in Multiple Sclerosis – Safety (Liver) Profile and Commercial Opportunity vs. Class Issues

Sentiment: Positive

"we already have an approval and an approved label without any liver safety discussion in the label, which just points to the fact that remibrutinib structurally does not have the off-target toxicities we believe that the structures of some of the other molecules do... FDA asked us for a limited liver monitoring to our understanding that's more limited than the liver monitoring that our competitors have had to add to their programs." — Vasant Narasimhan
"our base case assumption is that an oral drug will struggle to have the same level of efficacy as monoclonal antibodies in hitting the B-cell pathways in MS... but I think given that we know that we hit the target very well at 25 milligrams BID and we move up to 100 milligrams BID in the study, we think we'll definitely have strong target saturation... so that gives us confidence that assuming the class is effective... we will have a compelling profile from an efficacy standpoint." — Vasant Narasimhan

Pelacarsen / HORIZON – Interpreting the Delayed Readout, Event Rates and “What Counts as a Win”

Sentiment: Mixed

"we had powered up the study, you'll recall, during the process of the Phase III. So we feel like we're adequately powered to demonstrate both at the 70-milligram per DL cutoff and the 90-milligram per DL cutoff, the CVRR that we're targeting... I think what it does indicate is that the event rates are lower than what we had modeled from the published literature." — Vasant Narasimhan
"It is a 20% powered for 20% in the 70 mg per DL group and 25% for the 90 mg per DL group. We can win on the study with a relative reduction that's lower than that... there is the opportunity to win with CVRR in the mid-teens... Of course, we hope for a much higher CVRR impact... but we're going to ultimately have this to be data driven." — Vasant Narasimhan

Kisqali – Sustainability of Growth, Gross-to-Net Noise and Competitive Risk from Oral SERDs

Sentiment: Positive

"our growth was 44% in Q4. When you remove the U.S. RD adjustments, our global sales grew at 54% and our U.S. sales growth was at 62%. So in our view versus the consensus, the entire miss really came from these onetime RD adjustments... We remain fully confident on the $10 billion peak sales outlook for the brand." — Vasant Narasimhan
"we feel confident that when we look at the profile of Kisqali and what we hear from physicians that physicians want a CDK4/6 inhibitor for patients who can benefit... Certainly, the oral SERDs now have the opportunity over time to become the standard of care endocrine therapy option... At the margin, could there be some physicians who choose... an oral SERD and not a CDK4/6. Certainly... but we don't expect that to be the predominant approach." — Vasant Narasimhan

2026 Guidance, Margin Trajectory and Avidity Dilution vs. Productivity

Sentiment: Mixed

"For 2026, we expect sales to grow low single digit and core operating income to decline low single digits. And this reflects the 1 to 2 percent points of core margin dilution related to the Avidity deal... Looking ahead, we remain very confident in our 5% to 6% sales CAGR in the '25, '30 period, and we expect to return to 40% plus core margin in 2029." — Mukul Mehta
"when we took you all through the Avidity deal, we said it would be a 1% to 2% margin point dilution effect given the unusual high development cost burden in the next 2 to 3 years of a late-stage development product with a very expensive medicine from a COGS... So we feel we have implemented exactly that without Avidity would have been unchanged margin basically." — Harry Kirsch

Cosentyx and Hidradenitis Suppurativa (HS) – Share Stability, Market Growth and Future Cannibalization by Rhapsido

Sentiment: Mixed

"In HS now, we are the NBRx leader in naive patients with 51% share and 47% overall... Certainly, we've seen our competitor get traction in the switch market, but we're very much focused on that naive market where we have a really strong position... overall, we would forecast Cosentyx to have, on average, mid-single-digit growth over the coming years." — Vasant Narasimhan
"we've seen stabilization in the overall NBRx share in the market... We would expect that dynamic to continue going forward. So I think both -- all brands will grow based on the market... And that's part of the reason why we studied Rhapsido in HS because we see the opportunity here to build this market hopefully, with a high efficacy safe oral to then go make the market even larger." — Vasant Narasimhan

Bull Case

A diversified growth engine across oncology, immunology, cardiovascular and gene therapy, underpinned by disciplined cost control and a deep late-stage pipeline (remibrutinib, pelacarsen, ianalumab, Lp(a) and renal assets), supports sustained mid-single-digit sales CAGR and a return to 40%+ margins with upside from successful readouts.

Bear Case

Heavy near-term investment (Avidity, launches), major LOEs, policy risks like MFN, and pivotal trial uncertainties in key programs such as pelacarsen and remibrutinib could compress margins, cap growth and expose Novartis to downside if multiple late-stage assets underdeliver on efficacy or safety expectations.

Looking Ahead

With revenue declining -1.6% year-over-year, investors will be watching for signs of a turnaround at Novartis AG, particularly around remibrutinib (BTK) in Multiple Sclerosis – Safety (Liver) Profile and Commercial Opportunity vs. Class Issues. With operating margins at 26.4%, margin trends will remain a focal point. The muted stock reaction on earnings day suggests the market is taking a wait-and-see approach, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was Novartis AG's revenue in Q4 2025?

Novartis AG reported Q4 2025 revenue of $13.3B, representing a -1.6% year-over-year change.

Did Novartis AG beat earnings expectations in Q4 2025?

The stock rose +2.0% on earnings day, suggesting the results met or exceeded market expectations. The current bull case centers on: A diversified growth engine across oncology, immunology, cardiovascular and gene therapy, underpinned by disciplined cost control and a deep late-stage pipeline (remibrutinib, pelacarsen, ianalumab, Lp(a) and renal assets), supports sustained mid-single-digit sales CAGR and a return to 40%+ margins with upside from successful readouts.

What is the bull case for NVS stock?

The bull case for NVS centers on: A diversified growth engine across oncology, immunology, cardiovascular and gene therapy, underpinned by disciplined cost control and a deep late-stage pipeline (remibrutinib, pelacarsen, ianalumab, Lp(a) and renal assets), supports sustained mid-single-digit sales CAGR and a return to 40%+ margins with upside from successful readouts.

What is the bear case for NVS stock?

The bear case for NVS centers on: Heavy near-term investment (Avidity, launches), major LOEs, policy risks like MFN, and pivotal trial uncertainties in key programs such as pelacarsen and remibrutinib could compress margins, cap growth and expose Novartis to downside if multiple late-stage assets underdeliver on efficacy or safety expectations.

How has NVS stock performed since its Q4 2025 earnings?

NVS moved +2.0% on the day of its Q4 2025 earnings report, outperforming the S&P 500 by +18.4% since earnings. Year-to-date, the stock has returned +18.9%.

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