Novartis Stock Slips Ahead of Earnings as Pipeline Uncertainty Overshadows Regulatory Wins
Published on 07/20/2026 at 19:32 | Redaktion boerse-global.de
Novartis shares ended Monday 2.35% lower at €131.88, extending last week’s weakness as investors turned cautious on the eve of the Swiss drugmaker’s quarterly earnings report. The session’s decline built on a previous weekly loss of 1.82% from Friday’s close of €135.06, leaving the stock roughly 8.6% below its 52-week high of €144.30 reached in late February.
The pullback comes despite a flurry of positive regulatory news in recent days. The US Food and Drug Administration granted full approval to Fabhalta (iptacopan) for IgA nephropathy, upgrading the chronic kidney disease treatment from accelerated to regular status on the strength of Phase III data showing a slower decline in estimated glomerular filtration rates versus placebo. Separately, the European Union authorized Itvisma, Novartis’s gene therapy for spinal muscular atrophy. These approvals broaden the company’s commercial base beyond its established blockbusters — exactly the kind of pipeline validation that analysts say will determine whether Novartis can sustain its premium valuation relative to peers.
Yet the market’s attention is fixed well beyond Tuesday’s numbers. The real test, according to a recent Reuters analysis, lies in three experimental therapies whose pivotal study readouts are expected in the second half of the year: Pelacarsen for cardiovascular disease, Remibrutinib for multiple sclerosis, and Del-Desiran for a genetic disorder. Analysts estimate the combined peak sales potential of these three candidates at more than $10 billion annually, a sum designed to offset the expected revenue erosion from patent expiries on top sellers Cosentyx and Kisqali around the turn of the decade. The cardiovascular drug Entresto is already losing ground to generic competition.
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“Markets can be merciless in drug development,” a fund manager told Reuters, adding that even a minor setback in clinical trials is punished severely while successes are greeted with relief. The warning resonates after AstraZeneca’s shares tumbled earlier this month on a failed study of a neurological drug repurposed for heart disease. Barclays analysts noted that management’s handling of the coming data releases will be closely scrutinised.
Against this backdrop, Novartis CEO Vas Narasimhan — now eight years at the helm — has expressed confidence that the company can navigate the biggest wave of patent expirations in its history while still delivering growth. The upcoming earnings will offer the first snapshot of commercial momentum since the recent regulatory wins. The consensus estimate for second-quarter earnings per share stands at $2.16, a figure made more consequential by a mixed recent track record. In the first quarter of 2026, Novartis missed expectations with EPS of $1.99 versus a $2.07 consensus, a 3.86% shortfall. The prior quarter (Q4 2025) saw a slight beat ($2.03 versus $2.00), while Q3 2025 and Q2 2025 produced a miss ($2.25 versus $2.29) and a beat ($2.47 versus $2.38), respectively.
Looking further out, projections based on the current pipeline and recent approvals point to revenue of $65.6 billion and profit of $18.1 billion by 2029, with a fair-value estimate of CHF 123.55 per share cited in analyst notes. Those are forecasts, not reported figures, but they underscore the multi-year growth story the market continues to ascribe to Novartis — even if Monday’s dip suggests that conviction is conditional. Tuesday’s earnings may set the tone, but the decisive direction for the stock will be determined later this year when the three experimental drugs deliver their clinical verdicts.
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