Novartis Raises 2026 Profit Outlook Despite $2.2 Billion Drug Setbacks — What the Numbers Really Show
· News Team
October 27, 2026 — Basel, Switzerland. Novartis has raised its full-year profit outlook even as its third-quarter accounts absorb roughly $2.2 billion in charges associated with disappointing late-stage drug programs. The contrast is the story: stronger sales of existing medicines are supporting the Swiss pharmaceutical group while two experimental treatments illustrate how costly clinical uncertainty can be.
According to Novartis’s October 27 earnings release, third-quarter net sales rose 4% year on year to $14.5 billion. Its core operating income increased 10% at constant currencies to about $6.0 billion. But reported operating income fell 61% at constant currencies to roughly $1.8 billion. These figures describe different accounting measures, not a contradiction.
Why profit can rise and fall at the same time
The company separates its core measure, which adjusts for certain items, from its reported financial results. Its reported earnings reflect a $1.9 billion partial impairment of del-desiran, an experimental treatment for myotonic dystrophy type 1, and a $300 million write-off related to the heart-disease drug pelacarsen. Reuters reported that these two drug-development setbacks have intensified scrutiny of the company’s acquisition strategy.
For readers, the distinction matters: a write-down reflects a reduction in an asset’s accounting value; it is not equivalent to a $2.2 billion cash payment made during the quarter. Nor does a stronger core result erase the commercial risk revealed by clinical disappointments. Investors assessing the company need both measures.
The treatment pipeline is not a single verdict
Novartis said del-desiran’s value was reduced following a disappointing clinical readout and a longer development timeline. The company continues to see a possible development path for the medicine; describing it as a fully abandoned program would overstate what has been announced. The separate pelacarsen program was written off following its setback.
That difference has human as well as financial significance. Myotonic dystrophy is a serious inherited neuromuscular condition, and an experimental therapy’s delayed development is not the same thing as a treatment being approved, effective or available to patients. The earnings announcement does not establish a new clinical benefit for del-desiran. Patients should not interpret financial guidance as medical guidance.
Existing medicines are carrying the business
Growth in several marketed products helped offset generic competition. In the third quarter, Novartis reported constant-currency sales growth of 37% for breast-cancer treatment Kisqali, 22% for multiple-sclerosis treatment Kesimpta, 67% for leukemia treatment Scemblix, and 63% for cholesterol-lowering Leqvio. These are company-reported sales growth rates, not comparative measures of clinical effectiveness.
Novartis now expects full-year core operating income to be broadly flat or grow by a low-single-digit percentage at constant currencies. Previously, it anticipated a low-single-digit decline. Its expectation for low-single-digit net sales growth remains unchanged. The revised outlook is a forecast and remains subject to market, development and execution risks.
Three questions for the next results
First: Can the company sustain growth in its established treatments as generics pressure older products? Second: Will future clinical data justify further investment in del-desiran, or require additional changes to its valuation? Third: How much of the improvement in adjusted earnings will translate into durable cash generation? Novartis reported $5.1 billion of free cash flow for the quarter, down 18% from a year earlier.
The broader lesson is that a pharmaceutical company’s earnings and its research prospects can move in opposite directions. Novartis’s better outlook is meaningful, but it does not resolve the scientific questions raised by its recent trials.
Sources and official recording
Novartis official Q3 2026 results page, including financial report and company-hosted investor webcast (October 27, 2026); Novartis official earnings statement (October 27); Reuters independent reporting (October 27). The official webcast is linked rather than embedded because third-party iframe rights and playback were not verified.
Featured image: Illustrative laboratory photograph by Vitaly Gariev via Unsplash (Unsplash License). It does not show a Novartis facility, staff, clinical trial or the events described.
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