Novartis raised its full-year 2026 core operating income growth guidance to a low single-digit percentage, up from a previously projected decline, driven by strong quarterly sales and productivity gains. However, reported third-quarter operating income fell 61% due to elevated research spending and a $1.9 billion impairment charge on del-desiran, a drug candidate for myotonic dystrophy obtained through its $12 billion acquisition of Avidity.
Novartis profit guidance upgrade
- ▪Novartis attributed its full-year 2026 core operating income guidance upgrade to a low single-digit percentage to solid sales growth and productivity gains
- ▪Novartis maintained its full-year 2026 forecast for low single-digit net sales growth
- ▪Novartis raised its full-year 2026 core operating income growth guidance to a low single-digit percentage at constant exchange rates, revising its previous forecast of a low single-digit decline
Del-desiran trial failure
- ▪Novartis suffered clinical-trial setbacks in September 2026 for neuromuscular drug candidate del-desiran, which was being evaluated for myotonic dystrophy, a muscle-wasting disease with no approved treatments
- ▪Novartis experienced two consecutive major trial setbacks in September 2026, causing company shares to tumble
Impairment charge $1.9 billion
- ▪The $1.9 billion impairment charge for del-desiran contributed to a 61% decline in Novartis' reported non-adjusted operating income for the third quarter of 2026
- ▪Novartis recorded a $1.9 billion partial impairment charge and write-down in the third quarter of 2026 following clinical trial setbacks for del-desiran
Third quarter financial performance
- ▪Novartis noted that increased research and development costs adversely impacted reported operating income in the third quarter of 2026
- ▪Novartis reported a 10% increase in third-quarter 2026 core operating income at constant exchange rates, driven by higher net sales
Avidity acquisition context
- ▪Novartis originally added del-desiran to its drug pipeline via the acquisition of Avidity prior to the two major trial failures unveiled in September 2026
- ▪Novartis acquired drug candidate del-desiran through its $12 billion acquisition of Avidity
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