^{Copyright Novartis}

Novartis Beats Q1 Expectations, Boosts 2025 Forecast as U.S. Expansion Accelerates

Swiss pharmaceutical powerhouse Novartis reported a stellar first quarter for 2025, surpassing Wall Street’s expectations and signaling growing momentum with a revised full-year outlook. The company continues to ride high on surging global demand for its top-selling drugs while doubling down on its U.S. manufacturing footprint.

Q1 Financials: Growth Across the Board

Novartis posted $13.2 billion in net sales for the first quarter of 2025 — a 15% year-over-year increase on a constant currency basis, outpacing the $13.12 billion consensus forecast from LSEG analysts. The pharma giant also delivered a 27% jump in core operating income, reaching $5.58 billion, well above the $5.07 billion analysts had anticipated.

Shares of Novartis were up by 1.2% in early trading on the Swiss exchange following the earnings release.

Upgraded Full-Year 2025 Outlook

Given the robust performance, Novartis raised its full-year 2025 guidance, now expecting:

• Net sales growth in the high single digits (previously mid- to high-single digits)
• Core operating income to rise by low double digits (up from previous guidance of high single to low double digits)

Despite ongoing geopolitical tensions and economic uncertainties, CEO Vas Narasimhan expressed confidence in the company’s outlook during an interview with CNBC’s Squawk Box Europe. “Even in this complex geopolitical environment, we feel confident we can deliver on this upgraded guidance,” he stated.

Blockbuster Drugs Drive Revenue Surge

The company’s stellar growth was largely driven by its flagship treatments:

• Entresto (heart failure)
• Cosentyx (psoriatic arthritis)

However, Novartis is also witnessing accelerated growth in newer and emerging therapies, which Narasimhan said are expected to fuel growth into the next decade:

• Kisqali – a breast cancer treatment showing strong U.S. and European demand
• Kesimpta – an increasingly popular multiple sclerosis drug
• Leqvio – a cholesterol-lowering injection gaining market traction

“Our priority brands, including Kisqali, Kesimpta and Leqvio, continue to show strong momentum,” Narasimhan noted in a company statement. He also pointed to Pluvicto, Novartis’ targeted radioligand therapy for advanced prostate cancer, as a major growth opportunity following recent regulatory approvals.

Strategic U.S. Expansion to Counter Tariff Risks

With the Biden administration reportedly reviewing potential pharmaceutical tariffs — following Trump-era investigations into the industry — Novartis is proactively shifting gears.

Earlier this month, Novartis announced a massive $23 billion investment to build and expand 10 manufacturing facilities in the United States over the next five years. This move aims to ensure that all key medicines for U.S. patients are produced domestically, shielding the company from future trade disruptions.

While Narasimhan acknowledged that tariff considerations played a role, he emphasized a long-term strategic pivot:

“We’ve made a strategic decision — independent of short-term policy shifts — to invest in U.S. capacity. It aligns with our goal to be one of the top players in the American market.”

The company has also stocked up sufficient U.S. inventory to cushion against any near-term shocks caused by potential tariffs.

Competitive Landscape Heats Up

Novartis is not alone in its American manufacturing push. Just last week, Roche, another Swiss pharmaceutical firm, announced plans to invest $50 billion in U.S. operations, creating over 12,000 new jobs. U.S. giants Johnson & Johnson and Eli Lilly have also rolled out large-scale domestic investment strategies amid growing concerns over global supply chain resilience.

Looking Ahead

With a fortified drug pipeline, a stronger U.S. presence, and surging product demand, Novartis is positioning itself to withstand economic and geopolitical pressures while capitalizing on emerging opportunities. The company's decisive investments and optimistic outlook make it a standout performer in the pharmaceutical sector for 2025 and beyond.

‍