Novartis AG
Global Leader in Innovative Pharmaceutical Research and Development
Company Overview
Novartis AG is a Swiss multinational pharmaceutical corporation headquartered in Basel, Switzerland. As one of the world's largest pharmaceutical companies by revenue and market capitalization, Novartis focuses on innovative medicines in areas of significant unmet medical need, including cardiovascular disease, oncology, immunology, ophthalmology, and neuroscience.
Company Information
- Founded: 1996 (merger)
- Headquarters: Basel, Switzerland
- CEO: Vas Narasimhan (since 2018)
- Employees: ~74,000 (2025)
- Stock Symbol: NVS (NYSE), NOVN (SIX)
- Market Cap: ~$220B (Jan 2026)
Financial Performance
- Net Sales (2025): $49.2 billion
- R&D Investment: $9.6 billion (19.5% of sales)
- Operating Income: $11.8 billion
- Net Income: $8.4 billion
- Geographic Mix: 45% Americas, 30% Europe, 25% Asia
Novartis operates primarily through its Innovative Medicines division following the spin-off of eye care division Alcon in 2019 and the divestiture of generics unit Sandoz in 2023. The company maintains one of the largest pharmaceutical R&D budgets globally, investing nearly 20% of revenue into drug discovery and development.
Company History
Pre-Merger Heritage (1758-1996)
Novartis's roots trace back to the 18th century chemical industry in Basel, Switzerland. The company formed through the 1996 merger of two Swiss pharmaceutical giants:
- Ciba-Geigy: Formed in 1970 through merger of Ciba (founded 1859) and Geigy (founded 1758), with expertise in dyes, agricultural chemicals, and pharmaceuticals
- Sandoz: Founded in 1886 as a dye manufacturer, pioneering psychopharmacology research (LSD synthesis in 1938) and becoming a major pharmaceutical producer
1996: Formation of Novartis
On December 20, 1996, Ciba-Geigy and Sandoz merged to form Novartis in what was then the largest corporate merger in history, valued at $27 billion. The company name derives from the Latin "novae artes" meaning "new skills."
The merger created a pharmaceutical powerhouse with combined annual sales of $21 billion, 82,000 employees, and a diverse portfolio spanning prescription drugs, over-the-counter medicines, generics, animal health, and agricultural products.
Daniel Vasella became the first CEO, leading a strategic restructuring that would define Novartis as a focused innovative pharmaceutical company over the following two decades.
1997-2010: Diversification Era
Strategic Acquisitions:
- 2010: Acquired Alcon (eye care) for $52 billion, largest acquisition in pharmaceutical history
- 2006: Acquired Chiron (vaccines/diagnostics) for $5.4 billion
- 2005: Sandoz generics business expanded through acquisition of German generics maker Hexal and Eon Labs
During this period, Novartis operated as a diversified healthcare conglomerate with four divisions: Pharmaceuticals, Alcon (eye care), Sandoz (generics), and Consumer Health.
2011-2017: Pipeline Transformation
Under CEO Joseph Jimenez, Novartis underwent significant R&D restructuring, shifting focus toward breakthrough therapies in oncology, cardiology, and immunology:
- 2015: FDA approved Entresto (sacubitril/valsartan), groundbreaking heart failure drug
- 2017: FDA approved Kymriah, first CAR-T cell therapy for cancer treatment
- Divested non-core assets including animal health and vaccines businesses
- Closed or consolidated 25% of manufacturing sites as part of efficiency drive
2018-Present: Focus Strategy
2018: Vas Narasimhan appointed CEO at age 42, youngest CEO in Novartis history. Implemented "focused medicines" strategy:
- 2019: Spun off Alcon eye care division as independent publicly traded company
- 2020: Divested stake in Roche (held since 2001)
- 2023: Completed separation of Sandoz generics business
- 2024-2025: Major investments in radioligand therapy and cell/gene therapy platforms
By 2026, Novartis operates exclusively as a focused innovative pharmaceutical company, concentrating R&D on five therapeutic areas where it aims for leadership: cardiovascular/renal/metabolic, immunology, oncology, neuroscience, and ophthalmology.
Major Products & Drug Portfolio
Novartis's pharmaceutical portfolio includes numerous blockbuster drugs generating over $1 billion annually in sales. The company's top therapeutic areas and flagship medications include:
Cardiovascular & Renal
Entresto (sacubitril/valsartan)
2025 Sales: $7.2 billion
First-in-class heart failure treatment combining neprilysin inhibitor and angiotensin receptor blocker. Approved for heart failure with reduced ejection fraction (HFrEF). Considered a landmark therapy that significantly reduces cardiovascular death and hospitalization compared to ACE inhibitors.
Leqvio (inclisiran)
2025 Sales: $880 million
First siRNA therapy for high cholesterol, administered twice yearly. Breakthrough technology using RNA interference to lower LDL cholesterol for patients at high cardiovascular risk.
Oncology
Kisqali (ribociclib)
2025 Sales: $3.1 billion
CDK4/6 inhibitor for hormone receptor-positive, HER2-negative advanced or metastatic breast cancer. Proven to extend overall survival in multiple clinical trials.
Promacta/Revolade (eltrombopag)
2025 Sales: $1.8 billion
Oral thrombopoietin receptor agonist for chronic immune thrombocytopenia and severe aplastic anemia.
Pluvicto (lutetium-177 vipivotide tetraxetan)
2025 Sales: $1.6 billion
First FDA-approved radioligand therapy for PSMA-positive metastatic castration-resistant prostate cancer. Represents Novartis's leadership in radioligand therapy technology.
Immunology
Cosentyx (secukinumab)
2025 Sales: $5.3 billion
First fully human monoclonal antibody targeting IL-17A for psoriasis, psoriatic arthritis, and ankylosing spondylitis. Novartis's second-largest selling drug globally.
Ilaris (canakinumab)
2025 Sales: $980 million
IL-1β inhibitor for rare auto-inflammatory diseases including Still's disease and systemic juvenile idiopathic arthritis.
Ophthalmology
Lucentis (ranibizumab)
2025 Sales: $1.2 billion
Anti-VEGF therapy for wet age-related macular degeneration and diabetic macular edema. Faces biosimilar competition but remains important treatment option.
Cell & Gene Therapy
Kymriah (tisagenlecleucel)
2025 Sales: $620 million
First FDA-approved CAR-T cell therapy for certain types of leukemia and lymphoma. One-time treatment with curative potential for previously untreatable cancers.
Portfolio Summary
Novartis's top 10 drugs account for approximately 65% of total pharmaceutical sales, with Entresto and Cosentyx serving as the company's flagship franchises. The company has over 30 drugs in late-stage clinical development and aims to launch 15+ new molecular entities by 2029.
Research & Development
Novartis maintains one of the pharmaceutical industry's largest R&D operations, investing $9.6 billion annually (19.5% of net sales) into drug discovery and development. The company operates major research facilities in Basel (Switzerland), Cambridge (Massachusetts), and East Hanover (New Jersey).
Technology Platforms & Focus Areas
Radioligand Therapy (RLT)
Novartis is the global leader in radioligand therapy, which uses targeted radiation to destroy cancer cells. Following success with Pluvicto for prostate cancer, the company has 10+ radioligand candidates in clinical development for various solid tumors. Expects RLT to become multi-billion dollar franchise by 2030.
Cell & Gene Therapy
Building on Kymriah's foundation, Novartis is developing next-generation CAR-T and cell therapies for solid tumors and autoimmune diseases. The company operates manufacturing facilities in New Jersey and Singapore dedicated to autologous cell therapy production.
RNA Therapeutics
Following success with Leqvio (siRNA for cholesterol), Novartis is expanding RNA-based approaches including siRNA, antisense oligonucleotides, and mRNA technologies. Multiple cardiovascular and neurological programs in clinical stages.
Precision Medicine & Biomarkers
Heavy investment in companion diagnostics and biomarker-driven drug development. Partners with genetic testing companies to identify patient populations most likely to benefit from Novartis therapies.
Clinical Pipeline Highlights
As of January 2026, Novartis has 65+ compounds in clinical development:
- Phase III: 22 programs including radioligand therapies, next-gen immunology drugs, and cardiovascular innovations
- Phase II: 28 programs spanning oncology, neuroscience, and rare diseases
- Phase I: 15+ early-stage candidates including novel cell therapies and first-in-class mechanisms
Corporate Structure & Leadership
Executive Leadership
Vas Narasimhan, MD
Chief Executive Officer (since 2018)
Physician-scientist who previously served as Novartis's Global Head of Drug Development and Chief Medical Officer. Trained at Harvard Medical School and Harvard Business School. At 42, became youngest CEO of a major pharmaceutical company when appointed. Led strategic transformation focusing Novartis exclusively on innovative medicines.
Harry Kirsch
Chief Financial Officer
Oversees financial strategy, capital allocation, and investor relations. Previously held senior finance roles at Novartis and Pfizer.
Fiona Marshall, PhD
President, Biomedical Research
Leads global R&D organization with responsibility for drug discovery and early development. Previously held senior research positions at Heptares Therapeutics (acquired by Sosei Group).
Board of Directors
Novartis is governed by a Board of Directors elected by shareholders at the Annual General Meeting. The Board operates under Swiss corporate governance standards and includes independent directors with expertise in pharmaceuticals, biotechnology, finance, and healthcare policy.
Chairman: Joerg Reinhardt (since 2013), former Chief Operating Officer of Novartis and former CEO of Bayer HealthCare.
Market Position & Competition
Novartis ranks among the top 5 global pharmaceutical companies by prescription drug revenue, competing directly with Pfizer, Roche, Johnson & Johnson, Merck, and AstraZeneca for market share across major therapeutic categories.
Competitive Positioning
Competitive Strengths
- • Leadership in radioligand therapy
- • Strong cardiovascular franchise (Entresto)
- • Diversified oncology portfolio
- • First-mover advantage in CAR-T therapy
- • High R&D productivity (19.5% of sales)
- • Swiss headquarters provides tax efficiency
Competitive Challenges
- • Patent expirations (Gilenya 2019, others pending)
- • Medicare price negotiations pressure
- • Biosimilar competition (Lucentis, others)
- • High cost structure vs. emerging biotech
- • Limited consumer health presence post-divestiture
Key Competitors by Therapeutic Area
- Cardiovascular: Boehringer Ingelheim (Jardiance), AstraZeneca (Farxiga), Amgen (Repatha)
- Oncology: Roche (Keytruda competitor), Bristol Myers Squibb, Merck
- Immunology: AbbVie (Humira/Skyrizi), Johnson & Johnson (Stelara), Eli Lilly
- Ophthalmology: Regeneron (Eylea), Roche (biosimilar Lucentis)
Recent Developments & Challenges
Medicare Price Negotiations Challenge
In January 2026, Novartis became the sixth pharmaceutical company to petition the U.S. Supreme Court to block Medicare drug price negotiations under the Inflation Reduction Act. The company argues that mandatory negotiations for Entresto (heart failure drug) violate constitutional protections against government takings and compelled speech.
Analysts estimate that Medicare price negotiations could reduce Entresto's annual U.S. revenue by $800 million to $1.2 billion, significantly impacting Novartis's cardiovascular franchise profitability.
Manufacturing Quality Issues (2024)
Novartis received FDA warning letters for manufacturing deficiencies at facilities in Nebraska and Austria, resulting in temporary production suspensions. The company invested $400 million in remediation efforts and third-party quality audits, with full regulatory compliance restored by Q4 2025.
Sandoz Separation (2023)
Completed spin-off of Sandoz generics and biosimilars business as independent publicly traded company, allowing Novartis to focus exclusively on innovative medicines. The separation unlocked shareholder value and simplified corporate structure, though reduced overall revenue scale.
Future Outlook & Strategic Priorities
Under CEO Vas Narasimhan's leadership, Novartis has articulated a clear strategic vision for 2026-2030 focused on becoming a "focused medicines company" delivering transformative therapies in areas of high unmet need.
Strategic Priorities Through 2030
- Pipeline Execution: Launch 15+ new molecular entities targeting $25B+ peak sales potential
- Radioligand Leadership: Establish RLT as standard of care across multiple cancers; 10+ programs in development
- Technology Platforms: Advance cell therapy, RNA therapeutics, and precision medicine capabilities
- Geographic Expansion: Grow presence in China and emerging markets (target 30% of sales by 2030)
- Operational Excellence: Improve gross margins from 76% to 80%+ through manufacturing optimization
- M&A Strategy: Pursue bolt-on acquisitions in radioligand therapy and neuroscience
Financial Guidance
Novartis projects mid-single-digit revenue growth through 2030, driven by new product launches offsetting patent expirations and pricing pressures. The company aims to return $15+ billion to shareholders annually through dividends and share buybacks while maintaining investment-grade credit ratings.
Analyst Consensus
Wall Street analysts maintain generally positive outlooks on Novartis, citing strong pipeline execution, radioligand therapy leadership, and disciplined capital allocation. Concerns focus on Medicare pricing pressures, patent cliff risks, and execution challenges with complex cell/gene therapies. Average 12-month price target: $115-$125 per share (current: ~$108).