By Adria Calatayud

Novartis launched a share buyback of up to $10 billion and raised its full-year profit guidance after continued demand for key drugs fueled growth in second-quarter sales and earnings.

The Swiss pharmaceutical company is bracing for the patent expiration--and the arrival of generic competitors--for its heart drug Entresto, the group's best-selling medicine, at a time investors are worried about President Trump's plans to lower what Americans pay for prescription drugs and his threat to slap a 200% tariff on foreign-made medicines.

Novartis Chief Executive Vas Narasimhan on Thursday told analysts that the company had productive talks with the Trump administration and that it supports efforts to get developed markets outside the U.S. to pay more for innovative medicines.

The company said strong performances from recently launched drugs such as Pluvicto for prostate cancer and Scemblix for leukemia and a new indication for breast-cancer treatment Kisqali show the potential the company has within its portfolio to replace drugs that lose patent protection.

A new buyback of up to $10 billion, which runs until 2027, reflects company's confidence in its growth prospects over the medium to long term and its robust balance sheet, Narasimhan said.

The company, which earlier this year promised to spend $23 billion over the next five years to expand its footprint in the U.S., recently completed a $15 billion repurchase program that began in 2023.

Novartis also nudged up its annual profit guidance for the second time this year, but reiterated its sales expectations. It now projects core operating profit--its preferred metric, which strips out exceptional and other one-off items--to grow by a low-teens percentage this year when excluding currency movements, having previously forecast an increase by low double digits.

The company still expects full-year sales growth in the high single digit range at constant currency.

Novartis said its forecasts continue to assume Entresto will face competition from generic drugs in mid-2025, though the timing of generic entry is subject to intellectual-property and regulatory litigation.

While Novartis has exceeded expectations and raised guidance for a number of quarters, it wasn't expected to lift its forecasts this time around in light of the generic entry in the U.S. for Entresto, Vontobel analyst Stefan Schneider wrote in a note to customers.

For the second quarter, Entresto sales climbed 22% at constant currency to $2.36 billion, contributing to an 11% increase for the group as a whole to $14.05 billion. Novartis cited Kisqali and Entresto, as well as Scemblix, multiple-sclerosis treatment Kesimpta and cholesterol drug Leqvio, among its key growth drivers in the quarter.

Novartis made a quarterly net profit of $4.0 billion compared with $3.25 billion for the year-earlier period. Core operating profit came to $5.925 billion, up 21% at constant currency.

Analysts had forecast sales at $14.17 billion and core operating profit at $5.75 billion, according to consensus estimates provided by Visible Alpha.

Novartis separately said longtime financial chief Harry Kirsch would retire in March next year and be replaced by Mukul Mehta, its head of business planning and analysis, digital finance and tax. Kirsch will retire after a 22-year career at Novartis, including 12 years as CFO, it said.

Shares in Novartis fell 2.1% in European afternoon trade.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

July 17, 2025 10:11 ET (14:11 GMT)

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