Novartis raised its profit outlook even as a drug trial failure led to a $1.9 billion charge

The Swiss drugmaker expects 2026 core operating income to be in line with last year or to grow at a low-single-digit rate at constant currencies, the company said. Its prior guidance called for a low-single-digit decline. Net sales guidance is unchanged at low-single-digit growth.

Net income fell 70% to $1.2 billion from $3.9 billion a year earlier. Operating income dropped 59% to $1.8 billion, mainly because of higher research and development expenses, including a $1.9 billion partial impairment charge on the del-desiran asset.

On a core basis, operating income rose 11% to $6.0 billion, or 10% at constant currencies, and earnings per share rose 9% to $2.46. Net sales rose 4% to $14.5 billion, led by Kisqali, up 37% at constant currencies, and Kesimpta, up 22%. Generic competition reduced sales growth by 9 percentage points.

Core operating income beat the $5.61 billion analysts expected, according to The Wall Street Journal. Revenue came in below the $14.56 billion analysts expected, according to The Associated Press.

In the Phase III HARBOR study, del-desiran did not meet its primary endpoint of video hand opening time versus placebo in myotonic dystrophy type 1, the company said. Novartis said it is evaluating the full dataset and will engage with health authorities on a development path.

"While the del-desiran readout in DM1 was not what we had hoped, we saw evidence of clinical activity in the data and are working through the development path for this medicine," Novartis CEO Vas Narasimhan said in a statement.

Pelacarsen missed its primary endpoint of reducing cardiovascular event risk in the Phase III HORIZON trial, Novartis said. Remibrutinib met its primary endpoint in two Phase III trials in relapsing multiple sclerosis.