Novartis Sees Strong Growth in Q1 2025, Navigates Potential US Tariffs

Novartis, the Swiss pharmaceutical giant, reported impressive first-quarter results for 2025, driven by robust performance from its key drug portfolio. The company also addressed concerns about potential US tariffs on pharmaceuticals, expressing confidence in its ability to navigate these challenges.

Q1 2025 Financial Highlights and Drug Performance

Novartis beat analysts' expectations with $13.2 billion in sales for the first quarter of 2025, representing a 12% year-over-year growth. This strong performance was largely attributed to eight priority brands, with several drugs showing notable growth:

• Kisqali, a breast cancer treatment, saw global sales of $956 million, a 52% increase compared to the same period last year. This figure exceeded Wall Street estimates by 5%.
• Pluvicto, a prostate cancer drug, experienced 20% year-over-year growth with sales of $371 million, although this fell 7% below consensus estimates.

CEO Vas Narasimhan highlighted Kisqali's success, noting its 60% new-to-brand share in the postoperative adjuvant setting following FDA approval in September. The drug is on track to meet its $8 billion total peak sales goal.

Expansion Plans and US Manufacturing Investment

In response to potential US tariffs and to strengthen its position in its most important market, Novartis unveiled a $23 billion plan to build and expand 10 US facilities over the next five years. This includes:

• Construction of four new manufacturing facilities
• Addition of two new radioligand therapy production sites

Narasimhan emphasized the strategic importance of this decision, stating, "Our goal is to have 100% of our products produced in the US for the US." He acknowledged that this investment could have been made sooner but stressed its importance for supply chain stability, regardless of political leadership.

Navigating Challenges and Future Outlook

While Novartis reported strong overall performance, some challenges were noted:

• Pluvicto sales missed analysts' expectations for the second consecutive quarter, despite recent FDA approval for earlier-stage treatment.
• The company is working to expand Pluvicto's reach in community and urology settings, with only about half of the 620 enlisted treatment sites running at target patient numbers.

Despite these challenges, Novartis has raised its full-year 2025 guidance, now expecting sales to grow at a high-single-digit percentage compared to 2024. Narasimhan expressed confidence in the company's ability to manage potential US tariffs, stating, "We believe we can manage through the tariffs for this year, and then we'll have to, step by step, manage for subsequent years."