Novartis (NVS) Q4 FY25 earnings call: guidance and Q&A

Inquired about FDA conversations regarding liver monitoring for remibrutinib in MS, given competitor issues, and efficacy targets for the Phase III given no Phase II data.

Management stated remibrutinib's existing TSU label has no liver safety discussion, structurally avoiding off-target toxicities. FDA requested limited liver monitoring, less than competitors, and Novartis plans to advocate for the current label if no liver signals appear. For efficacy, while no Phase II data exists, strong target saturation is expected with 100mg BID dosing, aiming for a compelling profile if the class is effective in RRMS.

“our full plan is assuming that we -- and as we've seen to date, no liver signals in our study, we fully plan to advocate to FDA that we should stick to the current label in the absence of any information to really -- any data to really change the current label with respect to that.”

asked by Sachin Jain · answered by Vasant Narasimhan

Asked for updated thoughts on remibrutinib's commercial opportunity in MS, noting increased enthusiasm, and about potential risks/mitigation for pelacarsen's lower-than-expected event rate in the HORIZON trial.

For remibrutinib, an oral drug may not match monoclonal antibody efficacy, but a large market exists for patients preferring oral options (25% U.S., 65% ex-U.S. on non-B-cell DMTs). Brain penetrant properties could open other opportunities. For pelacarsen, the mid-year readout is on track, adequately powered despite lower event rates than modeled, likely due to optimal management of other risk factors. No specific risks were identified for the study completion.

“I think our base case assumption is that an oral drug will struggle to have the same level of efficacy as monoclonal antibodies in hitting the B-cell pathways in MS.”

asked by Simon Baker · answered by Vasant Narasimhan

Inquired about options to extend the Kisqali franchise beyond its mid-2031 LOE and the role of BD in supplementing Novartis' oncology pipeline.

Novartis is advancing CDK2, CDK2/4, and CDK4 programs in the clinic for post-Kisqali or combination settings, along with HER2 and neobombesin RLTs in breast cancer. Oncology is a clear focus for BD/M&A, with a priority to build on the scale from Scemblix, Pluvicto, and Kisqali, seeking good opportunities.

“Our core goal at the moment is our CDK2, CDK2/4 and CDK4 programs, all of which now are in the clinic, and we're advancing as fast as we can to see which of these medicines can provide either additional benefit in the post- Kisqali setting or either in combination.”

asked by Matthew Weston · answered by Vasant Narasimhan

Asked how the MFN world impacts ex-U.S. launch plans for Rhapsido and Ianalumab, specifically regarding changes in rest-of-world launch strategies.

For Rhapsido, already launched, the MFN impact on Medicaid rebate is limited and manageable for global launch, though with tighter pricing corridors. Ianalumab is more complex for 2027 G7 launches due to MFN impacting the entire U.S. net price. Novartis is working on strategies to price appropriately for Ianalumab's value without adversely affecting the U.S. market.

“Ianalumab is more complex as we get to launches in 2027 in the G7 countries. There, of course, it's on the entire market of U.S. net price, not just Medicaid.”

asked by Peter Verdult · answered by Vasant Narasimhan

Inquired about the reason for the lower-than-expected event rate in the HORIZON trial for pelacarsen, specifically whether it's due to overestimating baseline risk or underestimating treatment effect.

Management is blinded to the data but believes baseline risk was appropriately estimated. Speculated that baseline risk might be more prominent at higher Lp(a) thresholds, and at lower levels, interactions with LDL and other risk factors could be more dominant. The lower event rate could be due to optimal management of other risk factors, particularly LDL lowering, in trial patients.

“We suspect it has to do with the fact that we've really optimally managed these patients for all other risk factors, particularly LDL lowering.”

asked by Steve Scala · answered by Vasant Narasimhan

Asked about the expected ramp-up of Itvisma in the U.S. and ex-U.S., and if there are warehouse patients.

Gene therapies typically see a fast ramp-up to penetrate the prevalent patient pool over 2-3 years, then settling to a steady state due to its one-time therapy nature. Novartis expects a relatively quick peak. There are identified warehouse patients and strong access in many markets, which should maximize the medicine's uptake.

“In general, for gene therapies, we see often a pretty fast ramp as we get through the kind of prevalent pool of patients. And then it kind of comes down to a more steady state.”

asked by Richard Vosser · answered by Vasant Narasimhan

Asked about the carry-through of Q4 gross-to-net impact on Kisqali into 2026 and the risk oral SERDs pose to CDK4/6 combinations in the adjuvant setting.

The higher Q4 gross-to-net for Kisqali is considered a one-time effect due to higher Medicare utilization, expected to normalize as early breast cancer launch accelerates and patient mix shifts younger. For oral SERDs, management is confident physicians will prioritize CDK4/6 inhibitors. Oral SERDs may become standard endocrine therapy, used in combination with CDK4/6, not replacing it.

“I think the higher gross to net, we believe, is a onetime effect where we saw higher Medicare utilization than we had forecast in 2025.”

asked by Graham Parry · answered by Vasant Narasimhan

Sought management's perspective on the overall food allergy opportunity within Novartis' portfolio, including Xolair and potential beyond BTK.

Novartis has a long history in food allergy. Phase II data for remibrutinib in food allergy (to be shared in Q1/Q2 2026) changed their perspective, seeing a multi-billion dollar opportunity for a safe, oral medicine, especially for children. They are initiating a broad Phase III program and evaluating other internal/external pipeline opportunities to bolster the portfolio.

“overall, we see food allergy is a multibillion-dollar opportunity. I certainly with the potential to make something major out of this.”

asked by Seamus Fernandez · answered by Vasant Narasimhan

Commented on tight Q4 SG&A and asked about its repeatability into 2026, especially regarding Avidity dilution.

Harry noted Q4 SG&A was managed to even out spending, avoiding a typical year-end peak. Productivity programs will continue. Mukul confirmed that SG&A control and productivity plans are ongoing. The 1-2% margin dilution from Avidity was predicted due to high development costs and COGS, and without it, the margin would have been unchanged. The H1/H2 split in guidance reflects this, with core operating income growing in H2.

“Historically, we always had quite an increase in quarter 4. So we took this year to say, look, this is inefficient to have such a peak in a quarter where you have 1 to 2 weeks of Christmas and you have also the U.S. Thanksgiving and so on.”

asked by Michael Leuchten · answered by Harry Kirsch

Asked about Cosentyx's share stabilization in the HS market and if future growth will align with the overall market, which is expected to grow around 15%.

NBRx share for Cosentyx in HS has stabilized around 48-50%, with strong performance in naive patients and competitors doing well in switch patients. All brands are expected to grow with the market. The market potential is large ($3B-$5B), and could grow faster if more patients are mobilized. Rhapsido is also being studied in HS to further expand the market.

“So you rightfully point out, we've seen stabilization in the overall NBRx share in the market. As I noted, we're kind of in this 48% to 50% range.”

asked by Thibault Boutherin · answered by Vasant Narasimhan