Transformation Through Sandoz Spin-off and Focus on Innovative Medicines

Novartis has completed the spin-off of its generics and biosimilars division, Sandoz, and is fully transforming into a high-value-added company focused on innovative medicines. This decision aims to streamline the business by divesting from the low-margin generic drug business and concentrating R&D efforts on high-margin core therapeutic areas. The improved financial flexibility will serve as a strong foundation for future blockbuster candidate introductions and large-scale mergers and acquisitions (M&A). The industry recognizes this as a representative case of business restructuring adopted by traditional Big Pharma companies to maximize efficiency.

Addressing Revenue Gap Following Entresto Patent Expiration

With the impending patent expiration of Entresto (sacubitril/valsartan), Novartis's key cash cow for heart failure treatment, the company faces a significant revenue decline. Overcoming the patent cliff expected in 2026 has become the company's top priority. To address this, Novartis is expanding the global reach of Leqvio (inclisiran), a treatment for hyperlipidemia, which generated $1.24 billion in revenue in 2025 and has successfully established itself in the market. This strategic move demonstrates the company's commitment to proactively replacing single-product patent expirations with next-generation therapies.

Aggressive M&A to Strengthen Pipeline in Core Therapeutic Areas

To offset the revenue gap, Novartis is actively pursuing aggressive M&A in the cardiovascular and neuroscience fields. Notably, in February 2026, the company completed the acquisition of Avidity Biosciences, a developer of neuromuscular disease therapies, for $12 billion, adding an Antibody-Oligonucleotide Conjugate (AOC) platform to its portfolio. In 2025, the acquisition of Anthos Therapeutics brought abelacimab, a Phase 3 stroke prevention drug, into its pipeline, and the acquisition of Tourmaline Bio added pacibekitug, a treatment for atherosclerotic cardiovascular disease (ASCVD). This proactive acquisition of promising assets in advanced clinical stages aims to significantly reduce development time and risk.

Next-Generation Growth Engines Centered on Immunology and Oncology Platforms

Another key aspect of the transformation is the development of the oncology and immunology divisions based on next-generation platform technologies. Pluvicto, a radioligand therapy (RLT), generated $642 million in revenue in the first quarter of 2026 alone, emerging as a new growth driver. In the immunology field, Novartis is not only sustaining the performance of its existing blockbuster, Cosentyx (secukinumab), but also targeting the severe skin disease market with Rhapsido (remibrutinib), an oral Bruton's tyrosine kinase (BTK) inhibitor approved in September 2025. This demonstrates a long-term vision to build a sustainable pipeline by diversifying innovative platform technologies beyond specific diseases.