Novartis Q4 2025 Novartis AG Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Novartis AG Earnings Call
Speaker #1: Good morning and good afternoon, and welcome to the Novartis Q4, full-year 2025 results release conference call and live webcast. Please note that during the presentation, all participants will be in listen-only mode, and the conference is being recorded.
Operator: Good morning and good afternoon, and welcome to the Novartis Q4 full year 2025 results release conference call and live webcast. Please note that during the presentation all participants will be in listen-only mode, and the conference is being recorded. After the presentation there will be an opportunity to ask questions by pressing star 1 and 1 at any time during the conference. Please limit yourself to one question and return to the queue for any follow-ups. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Miss Sloan Simpson, Head of Investor Relations. Please go ahead, Madam.
Speaker #1: presentation, there will be an opportunity to ask After the questions by pressing star, one, and one at any time during the conference. Please limit yourself to one question and return to the queue for any follow-ups.
Speaker #1: A the Q&A session, will be available on our website, shortly after the call ends. With that, I would like to hand over to Ms. Sloan Simpson, Head of Investor Relations.
Speaker #1: Please go ahead, Madam.
Speaker #2: Thank you, Sarah. Good morning and good afternoon, everyone, and welcome to our Q4, 2025 earnings call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors.
Sloan Simpson: Thank you, Sarah. Good morning and good afternoon, everyone, and welcome to our Q4 2025 earnings call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors. These may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements. Please refer to the company's Form 20-F on file with the US Securities and Exchange Commission for a description of some of these factors. The discussion today is not a solicitation of a proxy nor an offer of any kind with respect to the securities of Avidity Biosciences or SpinCo. The parties have filed relevant documents with the US SEC, including a proxy statement for the transactions, and a registration statement for the spinoff. We urge you to read these materials that contain important information when they become available.
Speaker #2: These may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements. Please refer to the company's Form 20F on file with the U.S.
Speaker #2: Securities and Exchange Commission for a description description of some of these factors. The discussion today is not a solicitation of a proxy nor an offer of any kind with respect to the Securities of a Viditi Biosciences or SPINCO.
Speaker #2: The parties have filed relevant documents with the proxy statement for the transactions and with the U.S. SEC, including a registration statement for the spin-off. We urge you to read these materials, which contain important information, when they become available.
Speaker #2: Before we get started, I also want to remind our analysts to please limit yourselves to one question at a time, and we'll cycle through the queue as needed.
Sloan Simpson: Before we get started, I also want to remind our analysts to please limit yourselves to one question at a time, and we'll cycle through the queue as needed. With that, I will hand over to Vas.
Speaker #2: And with that, I will hand over to Vas.
Speaker #3: Terrific. Thank you, Sloan, and great to be with everyone today. With me in the room are Harry Kirsch, our Chief Financial Officer, and Mukul Mehta, our Chief Financial Officer designate, who will be taking over for Harry in mid-March.
Vasant Narasimhan: Terrific. Thank you, Sloan, and great to be with everyone today. With me in the room are Harry Kirsch, our Chief Financial Officer, and Mukul Mehta, our Chief Financial Officer designate, who will be taking over for Harry in mid-March. So let's dive into the results. When we start on slide 5, Novartis delivered high single-digit growth, as you saw earlier this morning. Importantly, we achieved our 40% core margin goal two years ahead of plan. I think that demonstrates the strong operational performance of the company. On the full year, our sales were up 8%. Core Op-Inc was up 14%. As I mentioned, the 40.1% core margin, CHF 21.9 billion now on Core Op-Inc. I think it's significant growth over the years.
Speaker #3: So let's dive into the results. And when we start on slide five, NOVARTIS delivered high single-digit growth, as you saw earlier this morning, and importantly, we achieved our 40% core margin goal two years ahead of plan.
Speaker #3: And I think that demonstrates the strong operational performance of the company. On the full-year, our sales were up 8%, core operating was up 14%.
Speaker #3: As I mentioned, the 40.1% core margin and $21.9 billion now on core operating—I think it's significant growth over the years. In quarter four, sales did decline, impacted by both the growth to nets, which we'll talk about a bit more, as well as the Entresto LOE.
Vasant Narasimhan: In Q4, sales did decline, impacted by both the growth to nets, which we'll talk about a bit more, as well as the Entresto LOE. Core OpInc is up 1%. We did have some important pipeline highlights, which we'll cover over the course of the call, but I think a few I wanted to highlight upfront. First, Remibrutinib. We achieved the submission in the most common type of CIndU that was based on positive phase 3 results, as well as interactions with the FDA. We'll have the remaining readouts for the two other subtypes of chronic inducible urticaria over the first half of this year. With Pelabresib, we now have a path forward for both the EU and the US. I'll go through that data and the path forward on a future slide. So overall, we met our upgraded full year 2025 guidance.
Speaker #3: And core operating is up 1%. We did have some important pipeline highlights, which we'll cover over the course of the call, but I think a few I wanted to highlight up front.
Speaker #3: we achieved the submission in the most First, Remy Brutneb, common type of SINDU that was based on positive phase three results, as well as interactions with the FDA.
Speaker #3: And we'll have the remaining readouts for the two other subtypes of chronic inducible urticaria over the first half of this year. And with Palabrasib, we now have a path forward for both the EU and the U.S.
Speaker #3: I'll go through that data and the path forward on a future slide. So overall, we met our upgraded full-year 2025 guidance. We expect to grow in 2026 through the largest patent expiry in NOVARTIS history, which I think demonstrates the strong performance we have on our key growth brands, as well on our pipeline replacement power.
Vasant Narasimhan: We expect to grow in 2026 through the largest patent expiry in Novartis history, which I think demonstrates the strong performance we have on our key growth brands, as well as on our pipeline replacement power. Now moving to slide 6. The growth drivers in the quarter continued their strong trajectory, as well as on the full year. Here you see the full year numbers. You can see Kisqali was up 57% on the full year. Cosentyx was up 36%. Scemblix up 85%. Pluvicto on the PSMA for launch, having dynamic growth as well. We'll talk about each of these brands in turn. Overall, 35% growth in this portfolio. This is a portfolio that will carry us through the end of the decade, as well as with many of these brands taking us into the mid-2030s. Now moving to slide 7.
Speaker #3: Then, moving to slide six, the growth drivers in the quarter continued their strong trajectory, as well as on the full year. Here you see the full-year numbers; you can see Kisqali was up 57% on the full year, Kesimpta was up 36%, Scemblix up 85%, and Pluvicto, on the PSMA-4 launch, having dynamic growth as well.
Speaker #3: We'll talk about each of these brands in turn. Overall, a 35% growth in this portfolio, and this is the portfolio that will carry us through the end of the decade as well as with many of these brands taking us into the mid-2030s.
Speaker #3: Then moving to slide seven, on Kisqali, we grew 57% in the quarter to, on the year, to $4.8 billion, outpacing the market for CDK4/6.
Vasant Narasimhan: On Kisqali, we grew 57% in the quarter year-on-year to CHF 4.8 billion, outpacing the market for CDK4/6. Now when you look at the chart on the lower left, our growth was 44% in Q4. When you remove the US R&D adjustments, our global sales grew at 54%, and our US sales growth was at 62%. So in our view, versus the consensus, the entire miss really came from these one-time R&D adjustments. We remain fully confident on the $10 billion peak sales outlook for the brand. And what's underpinning that confidence is the very strong volume growth we're seeing across geographies. When you look at the middle panel, US EBC NBRX is now above 60% and holding steady. I think that really demonstrates the strong preference providers have for Kisqali, particularly in settings where we are uniquely positioned.
Speaker #3: Now, when you look at the chart on the lower left, our growth was 44% in Q4. When you remove the U.S. R&D adjustments, our global sales grew at 54%, and our U.S.
Speaker #3: Sales grew at—growth was at 62%. So, in our view versus the consensus, the entire mix really came from these R&D one-time R&D adjustments.
Speaker #3: We remain fully confident on the $10 billion peak sales outlook for the brand, given the very strong volume growth. And what's underpinning that is what we're seeing across geographies.
Speaker #3: When you look at the middle panel, U.S. EBC, NBRX is now above 60% and holding steady. I think that really demonstrates the strong preference providers have for Kiscalli, particularly in settings where we are uniquely positioned.
Speaker #3: And in Germany, we have over 80% NBRx share in the early breast cancer setting, which I think shows again this early launch in Germany, which we hope to carry over now to other ex-U.S.
Vasant Narasimhan: In Germany, we have over 80% NBRX share in the early breast cancer setting, which I think shows, again, this early strong performance for the launch in Germany, which we hope to carry over now to other ex-US markets. Going to the last panel, I already went through many of the key elements, but I think I wanted to also note that EBC NBRX share is leading in both the overlapping and the exclusive populations. Outside of the US, we have important launches in Italy and Spain coming up in 2026. Finally, we continue to bolster the data profile for Kisqali, both with data that we recently presented at San Antonio and ESMO. We'll continue to follow up these patients over the long run, and that should allow us to continue to have mature OS data over time, which we think will continue to bolster the portfolio.
Speaker #3: Markets. Strong performance for the—so, going to the last panel, yeah, I already went through many of the key elements, but I think I wanted to also note that EBC, NBRx share is leading in both the overlapping and the exclusive population.
Speaker #3: Outside of the U.S., we have important launches in Italy and Spain coming up in 2026. And finally, we continue to bolster the data profile for Kiscalli, both with data that we recently presented at San Antonio and ESMO.
Speaker #3: We'll continue to follow up these patients over the long run, and that should allow us to continue to have mature OS data over time—which we think will continue to excite as Kisqali continues to bolster the portfolio.
Speaker #3: So, very, we have the outlook to be the largest brand in Novartis' history. Now, moving to slide eight, Kisimpta grew 36% to $4.4 billion on the year.
Vasant Narasimhan: Very excited. Kisqali continues to have the outlook to be the largest brand in Novartis's history. Now moving to slide 8. Kisqali grew 36% to CHF 4.4 billion on the year. You can see a continued steady performance of this brand, driven by the continued expansion of the B-cell class within MS. In the US, we had 27% growth in Q4. Importantly, we see increasing adoption in naive patients, which are now 50% of our NBRXs in first-line. Outside of the US, we are leading now with NBRX share in 9 out of 10 of the major markets that we track. The core opportunity we see ex-US going forward is to continue to expand B-cell therapies in the 67% of patients who are not on B-cell therapies and receiving disease-modifying therapies in MS. We continue to generate additional value for Kisqali.
Speaker #3: You can see the continued steady performance of this brand, driven by the continued expansion of the B-cell class within MS. In the U.S., we had 27% growth in Q4.
Speaker #3: Importantly, we see increasing adoption in naive patients, which are now 50% of our NBRXs now in first line. Outside of the U.S., we are leading now in NBRX share a 9 out of a 10 of the major markets that we track.
Speaker #3: And the core opportunity we see ex-U.S. going forward is to continue to expand B-cell therapies in the 67% of patients who are not on B-cell therapies and receiving disease-modifying therapies in MS. So we continue to generate additional value for Kisimpta.
Speaker #3: We've continued to progress also our every-two-month formulation for Kisipta. So, I think we're on a solid track with this brand to fully achieve our peak sales guidance of $6 billion plus.
Vasant Narasimhan: We've continued to progress also our every-two-month formulation for Kisqali. So I think we're on a solid track with this brand to fully achieve our peak sales guidance of $6 billion+. Now moving to the next slide. Pluvicto now really showing dynamic performance with the PSMAfore launch, 42% constant currency growth. We reached $2 billion in sales now overall globally. And that strong performance was driven primarily in the US, where we continue to see strong uptake in the pre-taxane setting. Sales grew 75%. We saw a 4x increase in our PSMA share since approval, now reaching 16% in that setting. We also see continued growth across provider settings, including the highest growth in community, where we now have over 790 treatment sites. Outside of the US, importantly, we've secured approvals in Japan and China, which also allowed us to continue to drive that ex-US strong growth.
Speaker #3: Then, moving to the next slide. Fluvicto now really showing dynamic performance with the PSMA-4 launch—42% constant currency growth. We reached $2 billion in sales now overall, globally.
Speaker #3: And that strong performance was driven primarily in the U.S., where we continue to see strong uptake in the pre-taxing setting. Sales grew 75%. We saw a 4X increase in our PSMA share since approval, now reaching 16% in that setting.
Speaker #3: We also see continued growth on provider set across provider settings, including the highest growth in community, where we now have over 790 treatment sites.
Speaker #3: Outside of the U.S., importantly, we've secured approvals in Japan, in China, which also allowed us to continue to drive that ex-U.S. strong growth. And we expect that growth to accelerate now with the Japan and China launches upcoming.
Vasant Narasimhan: We expect that growth to accelerate now with the Japan and China launches upcoming. Now the next phase for Pluvicto, as we expect to kind of get to the peak of the PSMAfore population over the course of this year, will be the launch in the hormone-sensitive setting, which adds about 75% additional patients to the patients we already have from the VISION and PSMAfore population. That SNDA has been submitted to the FDA, as well as the NMPA in China and PMDA in Japan. We have the right foundation for that launch to be, we think, a rapid uptake with 2/3 of eligible hormone-sensitive patients already with existing treaters or providers. So the capacity is well established. I did want to flag as well that we have new manufacturing sites that are coming online in California, in Florida, as well as in Japan and China.
Speaker #3: Now, the next phase for Fluvicto as we expect to kind of get to the peak of the PSMA 4 population over the course of this year will be the launch.
Speaker #3: In the hormone-sensitive setting, which adds about 75% additional patients to the patients we already have from the vision and PSMA 4 population. That SNDA has been submitted to the FDA as well as the NMPA in China and PMDA in Japan.
Speaker #3: We have the right foundation for that launch to be we think a rapid uptake with two-thirds of eligible hormone-sensitive patients already with existing treaters or providers.
Speaker #3: So the capacity is well established. I did want to flag as well that we have new manufacturing sites that are coming online in California, in Florida, as well as in Japan and China.
Speaker #3: We have over 440 treatment sites now outside of the U.S. as well. So we've really taken this to scale, which positions us well for the Fluvicto launches ongoing lunatherapy business as well as our future RLT portfolio.
Vasant Narasimhan: We have over 440 treatment sites now outside of the US as well. So we've really taken this to scale, which positions us well for the Pluvicto launches, ongoing Lutathera business, and our future RLT portfolio. Now moving to Slide 10. Leqvio reached blockbuster status in the quarter, an important milestone for this brand as we continue that steady trajectory that we often see for cardiovascular launches. 57% growth on the full year, 46% on the quarter. In the US, we continue to outpace the overall advanced lipid-lowering market. Our real focus is increasing depth in the health systems we prioritize, where there are strong capabilities within the buy-and-build setting, strong interest in getting patients to goal, and also focusing more on specialty areas as we've guided in the past. We saw 33% growth in the setting versus the prior year.
Speaker #3: Then moving to slide 10, Lectio reached blockbuster status in the quarter. An important milestone for this brand as we continue that steady trajectory that we often see for cardiovascular launches.
Speaker #3: 57% growth on the full year, 46% on the quarter. In the U.S., we continue to outpace the overall advanced lipid-lowering market. And our real focus is increasing depth in the health systems we prioritize, where there are strong capabilities within the buy-and-bill setting, strong interest in getting patients to goal, also focusing more on specialty areas as we've guided in the past.
Speaker #3: We saw 33% growth in the setting versus the prior year. Now, a key milestone for us outside of the U.S. will be the NRDL listing, which we achieved in China and is now already started in the first part of January.
Vasant Narasimhan: Now a key milestone for us outside of the US will be the NRDL listing, which we achieved in China and is already now started in the first part of January. As you have heard on previous calls, we had very strong uptake in China in the private setting. Now with the NRDL listing, the early signals are very strong for rapid uptake in the China market for Leqvio. So we're quite excited about that, and it's a key focus area for us in 2026. We continue to build the evidence base for Leqvio, important publications in various journals mostly focused on adherence rates, as well as our ability to drive LDL-C down to goal regardless of which background therapy patients are on. Now moving to slide 11. Scemblix had another strong quarter.
Speaker #3: As you have heard on previous calls, we have had very strong uptake in China in the private setting. And now, with the NRDL listing, the early signals are very strong for rapid uptake in the China market for Lectio.
Speaker #3: So we're quite excited about that. And it's a key focus area for us in 2026. We continue to build the evidence-based for Lectio. Important publications in various journals, mostly focused on adherence rates, as well as our ability to goal, regardless of which background therapy patients are on.
Speaker #3: Then moving to slide 11, Semblix had another strong quarter. We've reached again blockbuster status with this brand. And we have NBRX leadership in the U.S.
Vasant Narasimhan: We've reached again blockbuster status with this brand, and we have NBRX leadership in the US and Japan. 87% growth in Q4. Now if I could focus your attention on the middle panel. In the US, we've reached 41% NBRX share now across all lines of therapy. And we plan to continue to grow that. But the most important thing for us now is to drive the growth in the first line setting, where we're trending ahead of our plan. We're already now in the mid-20% range in the front line setting. We want to drive that up. And I think as we've now secured broad access, we have the opportunity now to continue to make Scemblix the medicine of choice on the front line for patients with CML.
Speaker #3: Japan. 87% and growth in Q4. Now, if I could focus your attention on the middle panel in the U.S., we've reached 41% NBRX share now across all lines of therapy.
Speaker #3: And we plan to continue to grow that. But the most important thing for us now is to drive the growth in the first-line setting where we're trending ahead of our plan.
Speaker #3: We're already now in the mid-20% range in the front-line setting. We want to drive that up. And I think as we get as we've now secured broad access, we have the opportunity now to continue to make Semblix the medicine of choice on the front line for patients with CML.
Speaker #3: And now outside of the U.S., we also continue to have our leadership in the third-line setting with 72% share across the major markets that we track.
Vasant Narasimhan: And now outside of the US, we also continue to have our leadership in the third line setting with 72% share across the major markets that we track. The early line indication is now approved in 60 countries, and we've already just launched in Germany. We expect to get other EU markets online in the front line, with launches expected in 2027. I think one ex-US market to note, which I think shows the ability we have to drive Scemblix outside of the US, is in Japan, where we already have 45% front line market share, NBRX share at 74%, second line NBRX share. So really strong outlook, confident in the $4 billion+ outlook for this medicine. Now moving to slide 12. Cosentyx grew 8% overall in the year, getting to $6.7 billion on the steady march up to our $8 billion peak sales guidance.
Speaker #3: The early line indication is now approved in 60 countries. And we've already just launched in Germany. We expect to get other EU markets online in the front line with launches expected in 2027.
Speaker #3: I think one ex-U.S. market to note, which I think shows the ability we have to drive Semblix outside of the U.S. is in Japan, where we already have 45% front-line market share, NBRX share at 74% second line NBRX share.
Speaker #3: So, really strong outlook—confident in the $4 billion-plus outlook for this medicine. Then, moving to slide 12, Cosentyx grew 8% overall in the year, reaching $6.7 billion on the steady march up to our $8 billion peak sales guidance.
Speaker #3: You can see the 11% growth on the quarter. In the U.S., we had 9% growth. That was driven by a higher demand we saw both in hydroadenitis and in IV.
Vasant Narasimhan: You can see the 11% growth on the quarter. In the US, we had 9% growth. That was driven by higher demand. We saw both in hidradenitis and in IV. Right now, we're the number one prescribed IL-17 across indications, and that's really because of the strong access that we have, front line access. Now in HS, we're the NBRX leader in NAIF patients with 51% share and 47% overall. The NAIF market is 2.5 times the switch market. Certainly, we've seen our competitor get traction in the switch market, but we're very much focused in that NAIF market where we have a really strong position. The IV is also steadily advancing, 8%, steady growth, 200 new accounts. We expect that to continue over the coming years. Outside of the US, no major changes, continued very strong growth, leading originator biologic in the EU and China.
Speaker #3: Right now, we're the number one prescribed IL-17 across indications, and that's really because of the strong access that we have—front-line access. In HS now, we're the NBRx leader in naive patients, with 51% share and 47% overall.
Speaker #3: And the naive market is two and a half times the switch market. Certainly, we've seen our competitor get traction in the switch market, but we're very much focused on that naive market where we have a really strong position.
Speaker #3: And the IV is also steadily advancing, 8%. It's a steady growth, 200 new accounts. We expect that to continue over the coming years. Outside of the U.S., no major changes.
Speaker #3: Continued very strong growth, leading originator biologic in the EU and China. And overall, we would forecast Cosentyx to have on average mid-single-digit growth over the coming years as we get to that $8 billion peak sales potential.
Vasant Narasimhan: We would forecast Cosentyx to have, on average, mid-single digit growth over the coming years as we get to that $8 billion peak sales potential. I did want to also flag that we have completed the submission with the US FDA for polymyalgia rheumatica. We're excited about that as an additional launch now for Cosentyx. We're also on track to file in the EU and Japan in the first half. Now moving to slide 13. Our renal portfolio has continued its rollout, I think, with steady progress. Separate from that, we also have amended our Zigakibart phase 3 protocol, which I wanted to talk about in a bit more detail. Starting with our renal portfolio, our IgAN portfolio contributed 50% of the NBRX market growth versus prior year, driven equally by atrasentan and Fabhalta.
Speaker #3: I did want to also flag that we have completed the submission with the U.S. FDA for polymyalgia rheumatica, and so we're excited about that as an additional launch now for Cosentyx.
Speaker #3: And we've also are on track. We're also on track to file in the EU and Japan in the first half. Then, moving to slide 13, our renal portfolio has continued its rollout.
Speaker #3: I think with steady progress. And separate from that, we also have amended our zigacobalt phase 3 protocol, which I wanted to talk about in a bit more detail.
Speaker #3: Starting with our renal portfolio, our iGAN portfolio contributed market growth versus prior year, driven equally by Venrafia and Pabhalta. So I think we see steady uptake across these two brands.
Vasant Narasimhan: So I think we see steady uptake across these two brands. Also in C3G, Fabhalta continued steady adoption across the top accounts. So we hope to see that accelerate now over the course of 2026. And outside of the US, Fabhalta is now approved in C3G in 45 countries. Atrasentan had its EU submission. So I think across these three brands, we have the opportunity to continue to build out a strong position. We do expect to be able to provide the full data set on the Fabhalta eGFR readout in IgAN soon, and also move forward with the filing for a full approval in IgAN for Fabhalta. Now on Zigakibart, and we also expect; I should also note the Atrasentan full eGFR data set in the first half.
Speaker #3: Also in C3G, Pabhalta continued steady adoption across the top accounts. And we hope to see that accelerate now over the course of 2026. And outside of the U.S., Pabhalta is now approved in C3G in 45 countries.
Speaker #3: Venrafia had its EU submission. So I think across these three brands, we have the opportunity to continue to build out a strong position. We do expect to be able to provide the full data set on the Pabhalta EGFR readout in iGAN soon.
Speaker #3: And also move forward with the filing for a full approval in iGAN for Pabhalta. Now, on Zigac, and we also expect— I should also note the Venrafia full EGFR data set in the first half.
Speaker #3: On zigacobalt, we have made the decision in order to optimize the overall label positioning and the competitive positioning to align our UPCR readout with the interim EGFR readout, which we expect in the first half of 2027.
Vasant Narasimhan: On Zigakibart, we have made the decision, in order to optimize the overall label positioning and the competitive positioning, to align our UPCR readout with the interim eGFR readout, which we expect in the first half of 2027. We expect that to support our BLA for a full approval. This was a decision based on our analysis of the phase 1 and 2 data. We think we have the opportunity to be second to market with both proteinuria and the eGFR benefit. And so that, I think, is going to hopefully position us well to have a fourth renal agent in our portfolio. We also have combination trials underway because we certainly see the opportunity in having a hemodynamic agent, having a Fabhalta, and having a Zigakibart, the opportunity to use combinations to optimize care for these patients. Now moving to slide 14.
Speaker #3: And we expect that to support our BLA for a full approval. This was a decision based on our analysis of the phase 1 and 2 data.
Speaker #3: We think we have the opportunity to be second to market with both proteinuria and the eGFR benefit. And so, that, I think, is going to hopefully position us well to have a fourth renal agent in our portfolio.
Speaker #3: We also have combination trials underway because we certainly see the opportunity in having a hemodynamic agent having a Pabhalta and having a zigacobalt the opportunity to use combinations to optimize care for these patients.
Speaker #3: Then moving to slide 14, Rapsudo is a U.S. launch, which is obviously something we're very closely tracking. It's delivering encouraging results. We are optimistic with already what we're seeing in the early days for this launch.
Vasant Narasimhan: Rapsido's US launch, which is obviously something we're very closely tracking, is delivering encouraging results. We are optimistic with already what we're seeing in the early days for this launch. We see strong demand with an encouraging mix of patients, both patients who are post-antihistamines as well as post-abiologic failure. We have a strong and positive response from allergists and dermatologists. The sampling and bridge program has over 2,000 HCP starts. And I think that when we benchmark that versus other highly successful dermatology launches, it's right in line with some of the most successful dermatology launches. We're also seeing early access wins. I think access will be now the gating factor. Every few months, we expect to bring on additional access on board.
Speaker #3: We see strong demand, with an encouraging mix of patients—both patients who are post-antihistamines, as well as post-biologic failure. We have a strong and positive response from allergists and dermatologists.
Speaker #3: The sampling and bridge program has over 2,000 HCP starts. And I think that when we benchmark that versus other highly successful dermatology launches, it's right in line with some of the most successful dermatology launches.
Speaker #3: We're also seeing early access wins. I think access will be now the gating factor every few months. We expect to bring on additional access on board.
Speaker #3: That will allow a steady pickup in sales over the course of the year, with more of a steady pickup in the second half of the year.
Vasant Narasimhan: That will allow a steady pickup in sales over the course of the year, with more of a steady pickup in the second half of the year. I think it's really that second half I would encourage everyone to watch as we get that access together. As a reminder, I think you all know well, clean safety, no box warnings, no contraindication, no required routine lab monitoring, no liver safety issues in the label, fast relief across a broad population as fast as 2 weeks. Anecdotally, we hear reports as fast as a day or 2 days, patients are starting to see benefit. It's the only oral therapy approved by FDA who remains symptomatic despite antihistamine therapy. Now moving to slide 15. Rapsido is one of these brands that we hope over time could become one of the largest brands in Novartis's history.
Speaker #3: And I think it's really that second half I would encourage everyone to watch as we get that access together. And as a reminder, I think you all know well, clean safety, no box warnings, no contraindication, no required routine lab monitoring, no liver safety issues in the label.
Speaker #3: Fast relief across a broad population, as fast as two weeks. Anecdotally, we hear reports as fast as a day or two days. Patients are starting to see benefit.
Speaker #3: And it's the only oral therapy approved by FDA who remains symptomatic in despite antihistamine therapy. Then moving to slide 15, Rapsudo is one of these brands that we hope over time could become one of the largest brands in Novartis's history.
Speaker #3: This is an opportunity over multiple indications. I mentioned CSU launch, the Sindhu now positive data that we have, in hand for one type, two more types coming.
Vasant Narasimhan: This is an opportunity over multiple indications. I mentioned CSU launch, the CIndU now positive data that we have in hand for one type, two more types coming, an HS readout in 2028. We have positive food allergy data, which we'll be presenting in Q1 of this year. That's leading us to now initiate a broad phase 3 program in food allergy. We are on track for the RMS readouts, second half of this year, but really mid of this year is the opportunity that we have to read out the 2 RMS studies, SPMS and Myasthenia Gravis, ongoing. So when you take that together, you really clearly have an opportunity with a medicine with a clean safety profile and strong efficacy as an oral option to have a significant long-term sales potential. Now moving to slide 16.
Speaker #3: And HS readout in 2028. We have positive food allergy data which will be presenting in Q1 of this year. And that's leading us to now initiate a broad phase 3 program in food allergy.
Speaker #3: We are on track for the RMS readouts second half of this year, but really mid of this year as the opportunity that we have to read out the RMS to RMS studies.
Speaker #3: SPMS and myasthenia gravis ongoing. So when you take that together, you clearly have an opportunity with a medicine with a clean safety profile and strong efficacy with an oral as an oral option to have a significant long-term sales potential.
Speaker #3: Now moving to slide 16, now INVISMA, which we haven't had as much attention, but it's something we continue to believe has a significant overall sales potential, total potential for this brand across the IV and IT of $3 billion plus.
Vasant Narasimhan: Now, Invisma, which we haven't had as much attention, but it's something we continue to believe has a significant overall sales potential, total potential for this brand across the IV and IT of $3 billion plus. This is a US approval that brings the one-time gene therapy to children two years and older. It's a broad label across patients who are non-sitters, sitters, and walkers. No AAV9 antibody titer limit for this treatment. There's a strong value proposition, single administration, durable efficacy, solid safety profile. So we see a multi-blockbuster opportunity for this brand. 7,500 children, teens, and adults have not been treated yet with Zolgensma IV. We also have an extensive experience in the US and ex-US with this medicine. Outside of the US, we've already been approved in the UAE one day after the FDA approval, and Europe and Japan submissions are completed.
Speaker #3: This is a U.S. approval that brings the one-time gene therapy to children two years and older. It's a broad label across patients who are non-sitters, sitters, and walkers.
Speaker #3: No AAV9 antibody titer limit for this treatment. There's a strong value proposition, single administration, durable efficacy. Solid safety profile. So we see a multi-blockbuster opportunity for this brand.
Speaker #3: 7,500 children, teens, and adults have not been treated yet with Zolgenzima IV. We also have an extensive experience in the U.S. and ex-U.S. with this medicine.
Speaker #3: Outside of the U.S., we've already been approved in the UAE, one day after the FDA approval, and Europe and Japan submissions are completed. And as a reminder, for Zolgenzima, actually our sales are larger outside of the U.S.
Vasant Narasimhan: As a reminder for Zolgensma, actually, our sales are larger outside of the US than in the US. There's certainly a significant opportunity ex-US for Invisma. Now moving to slide 17. As I mentioned on the first slide, for Pelabresib, we read out in Q4 the 96-week data from the phase 3 manifest program, which both on safety and efficacy has now given us a path forward to, we believe, get this medicine registered, assuming successful regulatory and clinical trial, phase 3 trials. In that study, we showed deep and durable responses and a comparable safety profile to ruxolitinib and myelofibrosis. You can see the data here on the left in terms of the spleen response. When you look at the data that we presented, we had a deep and durable spleen volume reduction for the spleen volume 35% reduction landmark, 91.5% versus 57.6%.
Speaker #3: …than in the U.S. So there's certainly a significant opportunity ex-U.S. for INVISMA. Now, moving to slide 17, as I mentioned on the first slide, Palabrasiv—we read out in the quarter four the 96-week data from the Phase 3 MANIFEST program, which both on safety and, too, we believe, gives us efficacy that has now given us a path forward to get this medicine registered, assuming successful regulatory and clinical trial Phase 3 trials.
Speaker #3: In that study, we showed deep and durable responses and a comparable safety profile to ruxolitinib in myelofibrosis. You can see the data here on the left in terms of the spleen response.
Speaker #3: When you look at the data that we presented, we had a deep and durable spleen volume reduction. For the spleen volume 35% reduction landmark, it was 91.5% versus 57.6%.
Speaker #3: We also saw sustained improvements in symptom scores and anemia. We had two times as many patients reaching goal with the spleen volume reduction and the TSS 50.
Vasant Narasimhan: We also saw sustained improvements in symptom scores and anemia. We had two times as many patients reaching goal with the spleen volume reduction and the TSS 50. So we believe this medicine has disease-modifying potential. We saw improvements in bone marrow pathology on the anemia. There was importantly now, from a mortality standpoint, fewer deaths and progressions observed with Pelabresib and ruxolitinib versus ruxolitinib alone. And the overall safety now is proven comparable with ruxolitinib, including comparable leukemic transformation rates, which was one of the topics that was holding this program back. So with this data set, we have now an agreement with the EU to file in 2026 based on this data.
Speaker #3: So we believe this medicine has disease-modifying potential. We saw improvements in bone marrow pathology. On the anemia, there was importantly now from a mortality standpoint, fewer deaths and progressions observed with Palabrasiv and ruxolitinib versus ruxolitinib alone.
Speaker #3: And the overall safety now has proven comparable with ruxolitinib, including comparable leukemic transformation rates, which was one of the topics that was holding this program back.
Speaker #3: So with this data set, we have now an agreement with the EU to file in 2026 based on this data. And in the U.S., China, and Japan, we'll be starting a new phase 3 study focused on patients who have high TSS 50 at baseline.
Vasant Narasimhan: In the US, China, and Japan, we'll be starting a new phase three study focused on patients who have high TSS 50 at baseline, where we believe we have the data set now to show we can achieve the regulatory milestone to ultimately get approval. Now moving to slide 18. I did want to also take a moment to mention our impact on global health. As I think many of you know, Novartis has been in global health for nearly 100 years, working on malaria and other neglected tropical diseases. With our Coartem medicine, 25 years ago, we started a real sea change in the treatment of malaria, reaching now well over a billion patients with Coartem. And now, with the recent data we presented in November, we have the opportunity to bring the first new malaria medicine, novel medicine, since Coartem in 25 years.
Speaker #3: Where we believe we have the data set now to show we can achieve the regulatory milestone to ultimately get approval. Now, moving to slide 18, I did want to also take a moment to mention our impact on global health.
Speaker #3: As I think many of you know, Novartis has been in global health for nearly 100 years, working on malaria and other neglected tropical diseases.
Speaker #3: With our cohort medicine 25 years ago, we started a real sea change in the treatment of malaria, reaching now well over a billion patients with cohort.
Speaker #3: And now with the recent data we presented in November, we have the opportunity to bring the first new malaria medicine novel medicine since cohort in 25 years.
Speaker #3: This is KLU156. It's ganaploside plus lumafantrine. It disrupts the parasite's internal protein system—very positive data here. You see, on the adjusted basis, 99.2% cure rates versus 96.4%. Versus a five-day course, the three-day course offers an opportunity to block transmission. Very solid safety profile.
Vasant Narasimhan: This is KAF156, ganaplacide plus lumefantrine. It disrupts the parasite's internal protein system. Very positive data here. You see on the adjusted basis, 99.2% cure rate versus 96.4% versus a 5-day course, a 3-day course, opportunity to block transmission, very solid safety profile. So we're quite excited to bring this forward as part of our mission in global health. Now moving to slide 19. Now taken together, very good year for us from a pipeline standpoint in 2025. You can see we met the vast majority of our milestones and trial starts. And I think that really shows the strong execution machinery we have now in R&D at the company, very aligned across research and development and strong execution across our global development organization. Turning to slide 20.
Speaker #3: So we're quite excited to bring this forward as part of our mission in global health. Then, moving to slide 19—now, taken together, it's been a very good year for us from a pipeline standpoint in 2025.
Speaker #3: You can see we met the vast majority of our milestones and trial starts, and I think that really shows the strong execution machinery we have now in R&D at the company.
Speaker #3: Very aligned across Research and Development, and strong execution across our global development organization. And turning to slide 20, for 2026, we're on track for seven pivotal readouts with the potential to strengthen the midterm outlook that we're guiding to, including the mid-single-digit sales growth we expect in the 2030s.
Vasant Narasimhan: For 2026, we're on track for seven pivotal readouts with the potential to strengthen the mid-term outlook that we're guiding to, including the mid-single digit sales growth we expect in the 2030s. A few particular readouts which I haven't mentioned, which I'll call out. On the left side, you can see Pelacarsen for CVRR. We do expect a readout middle of this year. It will be second half, and it will be middle of this year, which, if positive, would allow us for a US submission this year. We also are on track for our submissions for Ianalumab and Sjögren's disease, as well as the Delzoda DMD US submission, which, assuming the closure of the Avidity deal, would also happen in the first half of this year. Number of pivotal readouts. I mentioned Pelacarsen.
Speaker #3: A few particular readouts, which I haven't mentioned, which I'll call out on the left side, you can see palacarcin for CBRR, we do expect a readout middle of this year, it will be second half, but it will be middle of this year, which if positive would allow us for a U.S.
Speaker #3: submission this year. We also are on track for our submissions for unalimab and Sjogren's disease. And as well as the delzota DMD U.S. submission, which assuming the closure of the avidity deal would also happen, in the first half of this year.
Speaker #3: Number of pivotal readouts, I mentioned palacarcin there will be the unalimab readouts in hematology, which could have significant potential to drive that brand to very large long-term potential.
Vasant Narasimhan: There will be the Ianalumab readouts in hematology, which could have significant potential to drive that brand to very large long-term potential. Of course, Remibrutinib, as well as the Deldisoran DM1 phase 3 readout, again, assuming the closure of the Avidity. We also have the additional readout of the DUX4 interim data readout as well, which could support an accelerated launch in FSHD. However, that we would characterize as an upside case. And then a number of key study initiations you can see on the right-hand side of the chart. So another exciting pipeline year to continue to bolster our long-term growth profile. Now moving to slide 21. I will hand it over now to Harry.
Speaker #3: Of course, remibrutinib, as well as the daldisaran DM1 phase 3 readout, again assuming the closure of the avidity. We also have the additional readout of the DUX4 interim data readout as well, which could support accelerated launch in FSHD.
Speaker #3: However, that we would characterize as an upside case. And then a number of key study initiations you can see on the right-hand side of the chart.
Speaker #3: So another exciting pipeline year to continue to bolster our long-term growth profile. Now moving to slide 21, I will hand it over now to
Speaker #3: Harry. Yeah, thank you, Vas.
Sloan Simpson: Yeah, thank you, Vas. Good morning. Good afternoon, everybody. I now walk you through our financial results for the Q4 and the full year of 2025, which, as Vas mentioned, was very strong despite midyear significant US generic entries. As always, my comments refer to growth rates in constant currencies unless otherwise noted. So on slide 22, 2025 marked another year of excellent execution. So over the last five years, as you can see here, we delivered an 8% sales average growth rate and a 15% core operating income average growth rate driven by strong commercial execution, a great late-stage readout, and disciplined productivity programs. This translated on the right side into more than 1,000 basis points of core margin expansion in constant currencies. And as you can see, in reported currencies, allowed us to reach our midterm core margin target of 40% two years earlier than planned.
Speaker #2: Good morning, good afternoon, everybody. I now walk you through our financial results for the fourth quarter. And the full year of 2025, which as Vas mentioned, was very strong despite mid-year significant U.S.
Speaker #2: Scenario entries. And as always, my comments refer to growth rates and currencies, unless otherwise noted. So, on slide 22, 2025 marked another year of excellent execution.
Speaker #2: So over the last five years, as you can see here, we delivered an 8% sales average growth rate and a 15% core operating income.
Speaker #2: Average growth rate, driven by strong commercial execution, a great late-stage readout, and disciplined productivity programs. This translated, on the right side, into more than margin expansion and a constant 1,000 basis points of core currencies, and as you can see, in reported currencies, allowed us to reach our midterm core margin target of 40% two years earlier than planned. As you may recall, we initially planned for 2027.
Sloan Simpson: As you may recall, we initially planned for 2027. Now we have achieved it in 2025. With these results, I hope you agree, but I believe we have really elevated the company to a new level of sales performance, margin profile, and, as I'll discuss later, free cash flow generation. On slide 23, just a quick summary. You see that we have delivered our full-year guidance in 2025 after upgrading twice throughout the year. We guided to high single-digit sales growth, and we delivered 8%. For core operating income, we guided to low teens and achieved 14%. This is a strong result in the year, as I mentioned, where US generic entries for Entresto, Promacta, and Tasigna happened. It speaks really for the momentum of our priority brands, as Vas really laid out, as well as disciplined cost management. Turning to slide 24.
Speaker #2: Now we have achieved it in 2025. With this result, I hope you agree, but I believe we have really elevated the company to a new level of sales performance, margin profile, and as I discussed later, free cash flow generation.
Speaker #2: On slide 23, just a quick summary. You see that we have delivered our full-year guidance in 2025 after upgrading twice throughout the year.
Speaker #2: And we guided to high single-digit sales growth and we delivered 8%. For core operating income, we guided to low teens and achieved 14%. And this is a strong result in a year as I mentioned where U.S.
Speaker #2: generic entries for Empresto Promacta and Tasigna happened. And it speaks really for the momentum of our priority brands as well as the really laid out, as well as disciplined cost management.
Speaker #2: Turning to slide 24, so here are a few more details. For the full year, we delivered the described solid top and bottom line growth record record core margin and record free cash flow almost $18 billion.
Sloan Simpson: Here are a few more details. For the full year, we delivered the described solid top and bottom line growth, record core margin, and record free cash flow, almost CHF 18 billion. The core margin in the year improved by 210 basis points to 40.1%, and core EPS rose 17% to $8.98. Free cash flow grew 8% to CHF 17.6 billion. Now for the quarter, on the right side here, as expected, the US generics had an impact, which we see in Q4, and then Mukul will lay it out, first half of next year or of 2026, but then again back to growth. Anyway, sales declined 1%, while core operating income increased by 1%. The results were a little bit noisy due to some US R&D adjustments.
Speaker #2: The core margin in the year improved by 210 basis points to 40.1%. And core EPS rose 17% to $8.98. Free cash flow grew 8% to $17.6 billion.
Speaker #2: Now for the quarter, on the right side here, as expected, the U.S. generics had an impact, which we see in Q4, and then Mukul will lay it out—first half of second of next year, or of 2026.
Speaker #2: But then again, back to growth. Anyway, sales declined 1%, while its core operating income increased by 1%. And the results were a little bit noisy due to some U.S.
Speaker #2: R&D adjustments. A positive impact in quarter four of 2024, so last year financially, and a negative impact this year in quarter four of 2025, mostly on generic brands.
Sloan Simpson: A positive impact in Q4 of 2024, so last year financially, and a negative impact this year in Q4 2025, mostly on generic brands. Excluding these adjustments, underlying Q4 sales growth would have been positive 3%. As said, the vast majority of the growth from net adjustments were Entresto and other generic brands like Promacta in the US. Core EPS in the quarter, CHF 2.03, up 2%. Now on slide 25, you can see our continued progress on free cash flow generation, which reached CHF 17.6 billion, all-time high for the company in 2025. I think it shows you also, beside the financial, the power of being a pure-play pharma company. As you know, many years back, with even six businesses or even before the Alcon and Sandoz spin, these numbers were usually the CHF 10 to 12 billion range.
Speaker #2: So excluding these adjustments, underlying quarter four sales growth would have been 3%, positive 3%. As said, the vast majority of the growth from net adjustments were Entresto and other generic brands like Promacta and U.S.
Speaker #2: Core EPS in the quarter $2.03, up 2%. Now on slide 25, you can see our continued progress on free cash flow generation, which reached 17.6 billion all-time high for the company in 2025.
Speaker #2: also beside the financial, the I think it shows you
Speaker #1: pure Power of Pharma play . being a As you know company . in were even before the years back even icon businesses or numbers six businesses even it's before range .
Sloan Simpson: Now this is the earnings power of a focused and very successful pharma business. We remain, of course, focused on ensuring that the growth and core operating income translates into high-quality earnings and strong cash flow generation. This robust cash flow allows us to reinvest in the business, pursue bolt-on acquisitions, and continue to return attractive capital to the shareholder through growing dividend and share buybacks. On page 26, a quick reminder on our unchanged capital allocation strategy. As you see, we continue to execute our balanced, shareholder-friendly capital allocation in 2025. We invested more than CHF 10 billion in R&D, an 8% increase versus prior year, announced four acquisitions, 10 licensing deals, strengthening our key platforms and pipeline across all of our four therapeutic areas.
Speaker #1: or the numbers were icon in 10 to 12 billion range . now usually is earnings power of a focused and pharma business . We successful remain , of course , focused on ensuring These core operating income into high translates quality strong earnings and cash flow generation robust cash to flow reinvest in the business , pursue bolt on allows us acquisitions and return .
Speaker #1: capital to the shareholder through growing dividend tax This on 2026 . On page 26 , quick reminder a on our unchanged capital allocation strategy .
Speaker #1: And we as you see , continue to our execute balanced shareholder friendly allocation capital invested more than The 10 billion in R&D , an 8% increase prior was announced for year licensing acquisitions , ten deals , key strengthening our platforms pipeline and our of across all .
Sloan Simpson: On returning capital to our shareholders, we completed our CHF 15 billion share buyback program in early July, and we launched a new up to CHF 10 billion program targeted to be completed by the end of 2027. Approximately CHF 7.7 billion of that remains to be executed. In addition, we distributed CHF 7.8 billion in dividends during the first half of 2025. Now speaking of dividends, turning to slide 27, we are proposing a dividend of CHF 3.70 per share, a 6% increase in Swiss francs and even double-digit in dollars. It's our 29th consecutive dividend increase in Swiss francs since company creation 1996, and including years following the Sandoz and Alcon spins when we did not rebase the dividend at all. This reflects our long-term and longstanding commitment to a growing dividend in Swiss francs per share. That concludes my remarks.
Speaker #1: On returning capital to our shareholders, we completed our buyback $15 billion share program in early July, and we launched a new, up to $10 billion program targeted to be completed by the end of 2027.
Speaker #1: Approximately $7.7 billion of that remains to be executed. In addition, we distributed $7.8 billion in dividends during the first quarter of 2025.
Speaker #1: Now , half dividends , turning to slide 27 . proposing a dividend We are speaking of 70 per share , a 6% increase francs in and even double digit in dollars .
Speaker #1: And it's our 29th consecutive increase in Swiss francs since company creation, dividend 96, and including years following the Sandoz and Alcon spins.
Speaker #1: did not When we rebase the dividend at all . This reflects our long term long to standing a and growing dividend in commitment Swiss per francs .
Sloan Simpson: Before handing over, I'd like to briefly acknowledge that this will be my final earnings call as CFO of Novartis. It has been a privilege to serve in this role the last 13 years and to work alongside Vas and so many other great colleagues to help guide the company through a period of significant transformation and performance improvement. I'm very pleased to hand over to Mukul, a longtime colleague. In fact, we both started maybe at different stages of our career in 2003 at Novartis and very intensively worked together, especially the last 10 years. So with that, I turn over to Mukul to take you through 2026 guidance.
Speaker #1: my remarks . That concludes handing briefly like to that this over , I'd be will acknowledge share Before CFO call as final Novartis has of privilege to serve in this role .
Speaker #1: The been a last 13 years , and work alongside to many other great colleagues to help to company , to help guide the through a period of significant my company transformation improvement .
Speaker #1: performance I'm very pleased to hand over to Mukul long time colleague , a both . started maybe at In we different stages of careers our in 2003 at Novartis and very intensively worked , together ten years .
Vasant Narasimhan: Yeah. A big thank you to you, Harry, for everything. It is an honor to step into the role that you're leaving me with. I look forward to getting to know everybody on the line in the months to come. So if you can go on slide number 29, please. For 2026, we expect sales to grow low single digit and core operating income to decline low single digit. And this reflects the 1 to 2 percentage points of core margin dilution related to the Avidity deal that we had previously indicated. Importantly, in 2026, we will be growing top line through a period of highest GX impact in our company's history. At the same time, we will make sure that we continue to invest in R&D, we fund our launches appropriately, while driving forward with the productivity improvement plans that the company has.
Speaker #1: So last, with that, I’ll turn it over to Mukul to take, yeah, the 2026 guidance.
Speaker #2: A big thank you to Hari. For you, it's been everything. It is an honor to step into the role that that leaving me you're with.
Speaker #2: And I forward to getting to know look everybody on the in the in the if you can So come . go on slide number please , 29 , for 2026 , we expect sales to grow low decline low single income to digit and digits .
Speaker #2: reflects the 1 to 2% And this margin dilution points of operating core deal that related to the we had previously indicated . Importantly , in will be 2026 , we growing line through a highest top impact in our history GH company's same time , .
Speaker #2: we will make period of continue to sure that R&D . invest in We fund our launches appropriately driving forward while with the productivity company the plans that improvement we expect to previously noted , .
Vasant Narasimhan: As previously noted, we expect to close the Avidity deal in the first half of 2026. Looking ahead, we remain very confident in our 5% to 6% sales CAGR in the 25-30 period, and we expect to return to 40%+ core margin in 2029, as laid out in our capital markets study. For 2026, we expect core net financial expenses to be around $1.7 billion. This is higher than the 25 levels, and this is largely due to the anticipated funding costs related to the Avidity deal, which we have previously indicated is primarily going to be debt funded. We also expect the core tax rate to remain around 16.5%. Moving to slide 30, please. As we have previously indicated as well, 2026 is going to be a year of two halves. We continue to expect strong volume growth from our priority brands throughout 2026.
Speaker #2: first half As of 2026 . Looking ahead , we remain very confident in our Kargar At the in the 5 to 6% sales .
Speaker #2: period , 2530 and we expect to return core margin to 2029 , as laid out in our Capital Markets for 2026 . We expect core net financial Day expenses to be around $1.7 billion .
Speaker #2: This is higher than the levels , and this largely is due to the in the anticipated funding costs deal , which we have ability previously primarily going related to the to be debt indicated is funded .
Speaker #2: We expect also core tax remain rate to around 16.5% . 30 , please Moving . As we have previously to slide well , 2026 is going year of two halves .
Speaker #2: to be a expect we continue to strong volume growth from our priority expect brands throughout 2026 , we have to understand for the that first half of the year , will we a tough prior year with base and Cigna generics Promacta .
Speaker #2: to be a expect we continue to strong volume growth from our priority expect brands throughout 2026 , we have to understand for the that first half of the year , will we a tough prior year with base and Cigna generics have Having mid US 2025 .
Speaker #2: to be a expect we continue to strong volume growth from our priority expect brands throughout 2026 , we have to understand for the that first half of the year , will we a tough prior year with base and Cigna generics have Having mid US interest or we expect the first half entered the of the first half of the year sales to decline low With that , digit and single operating income to core digit double decline low .
Vasant Narasimhan: But we have to understand that for the first half of the year, we will have a tough prior year base with Entresto, Promacta, and Tasigna generics having entered the US market mid-2025. With that, we expect the first half of the year sales to decline low single digit and core operating income to decline low double digit. Additionally, Q1 will be impacted by the 2% positive gross net impact that we had in the base Q1 2025, which will weigh on the quarter-on-quarter growth rate in Q1. That said, in the second half of the year, we expect a clear improvement with sales growing mid-single digit and core operating income growing mid to high single digit. This takes us to our full-year guidance of low single digit on top line. So moving to slide 31, please.
Speaker #2: Additionally , will be Q1 by the 2% positive growth we had impact that in the Q1 25 , which will on the quarter impacted growth rate in Q1 said , .
Speaker #2: In the second half of the year, we expect a clear quarter-on-quarter improvement, with sales growing mid-single digits and core operating income growing mid- to high-single digits.
Speaker #2: This takes us to our full year single digit on top line guidance of low digit moving to . So slide 31 , rate .
Vasant Narasimhan: If exchange rates remain as at their late January levels, we expect a positive 2 to 3 percentage point impact on our full-year sales and a positive 1 percentage point impact on core operating income. As a reminder, which Harry conveyed previously, we publish updated FX estimates monthly on our website. That concludes my remarks, and I hand it over back to Vas.
Speaker #2: as exchange remain at as If January levels , we expect a their late positive 2 to 3 point impact on full our year percentage sales and a positive weigh on core operating income reminder , .
Speaker #2: Hari is And as a conveyed which previously , we publish updated FX estimates monthly on our website that so concludes my remarks and I hand it over back
Vasant Narasimhan: Yeah, thank you, Mukul. I want to take a moment as well to acknowledge Harry Kirsch's incredible contributions to Novartis over 23 years. Over my tenure as CEO, now entering my ninth year, Harry's been by my side as we've transformed the company into a pure play and I think unlocked really outstanding shareholder returns, outstanding financial performance, but probably less visible as the strength of the finance organization Harry's built, as well as the culture he's created in the company around productivity, financial discipline, and operational excellence. He'll sorely be missed, but we'll continue his legacy in the years to come. And a big welcome to Mukul, who I've known for many, many years. He'll be a great addition to the team and continue the strong track record of Novartis finance in delivering strong operational execution. Now moving to the next slide.
Speaker #2: to
Speaker #3: Michael , I Yeah .
Speaker #3: moment want to take a as well to us . acknowledge Harry Kirsch incredible to Novartis over over my contributions tenure as CEO . Now , entering my ninth year , Harry's been by my side as we've play .
Speaker #3: I think And really outstanding shareholder financial unlocked performance , but probably less visible is the , outstanding strength of the finance organization . Harry's built , as well as the culture he's created in company around productivity , the operational excellence .
Speaker #3: He'll surely be missed, but we'll continue his legacy in Q4. And a big welcome to the years to come for many. I've known many years.
Speaker #3: It'll addition be a great to the team and continue the strong record of track Finance and Novartis delivering strong operational execution . Now moving to the next slide track , I did want to take a moment to build on Michael's comments on our confidence in the guide and 5 to 6% sales our to 25 to 30 .
Vasant Narasimhan: I did want to take a moment to build on Mukul's comments on our confidence in our 5% to 6% sales CAGR to 25 to 30. That includes the impact of Entresto in 2026, as well as the US MFN agreement's impact. You can see in the chart; we do expect some generic impacts, though a lot of that is front-loaded in the early part of the five-year trajectory here. A number of brands where we believe we can drive dynamic growth in the middle column. And then lastly, a strong set of assets that we probabilized in our pipeline.
Speaker #3: That includes the impact of in 2026 , as well as US MFN the agreement's impact . interest do expect some generic in the So a lot impact .
Speaker #3: of that is front loaded in the early the five year trajectory here , a number of brands where we believe chart , we we can drive dynamic growth middle column then lastly , and strong set in the assets that we probably had in our of pipeline .
Vasant Narasimhan: This ranges from Omalizumab, our various Pluvicto and actinium PSMA, Pelacarsen, as well as the Avidity assets, amongst others, that give us the opportunity to not only hopefully deliver the 5% to 6%, but if we're successful on those pipeline assets, we could even drive higher growth in the period. So moving to slide 34 and in closing, strong performance in 2025. We delivered the guidance that we outlooked and got to our 40% core margin early. Our priority brands continue to outperform, and that's what's going to drive our growth through the second half of 2026 and then through the five years to come. We're advancing the pipeline meaningfully in 2020. We advanced it meaningfully in 2025, but it's 7 pivotal readouts this year. And we're confident in that mid- to long-term growth guidance. So with that, we can close this section and move to questions.
Speaker #3: But this from our various and actinium psma Pelacarsen as well as the assets pluvicto others , that give avidity opportunity us the only to not the hopefully 5 to 6% , but we're successful those if on pipeline assets , we could even drive higher growth in the period .
Speaker #3: But this from our various and actinium psma Pelacarsen as well as the assets pluvicto others , that give avidity opportunity us the only to not the hopefully 5 to 6% , but we're successful those if on pipeline assets , we could even drive higher growth in the deliver moving to slide 34 and in closing , performance in 2025 .
Speaker #3: We strong guidance that we outlook and got to our 40% core margin early . Our priority brands continue to outperform and that's what's going to drive growth through the second half of 26 and then through the five years to come .
Speaker #3: We're advancing the pipeline meaningfully in 2020 . We meaningfully advanced it seven pivotal this year , readouts and we're But mid to long term that guidance .
Speaker #3: confident in in 2025 . with that we move . So So close this can questions . move to section and So operator we line .
Vasant Narasimhan: Operator, we can open the line. Thank you.
Operator: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Thank you. We'll start with our first question, and this is from Sachin Jain from Bank of America. Please go ahead.
Speaker #3: can open the Thank you .
Speaker #4: Thank you. To ask a question, you will need to press star one on your phone and wait for your name to be announced. And to withdraw your telephone question...
Speaker #4: announced . press one star Please one again . and Please stand we by while compile the Q&A roster . you . We'll start with our first question , and this is Thank from Sachin Jain from Bank America .
[Analyst] (Bank of America): Hi there. Thanks for taking my questions. Perhaps I just kick off with thanking Harry for his support and insight over the years. The questions, I guess, for Vas on Remy. You've talked about avoiding liver monitoring in MS given no Hy's law. Competition recently has been vocal avoiding monitoring in the label when monitoring has been involved in the studies, could be difficult. So why don't you just give us any color on FDA conversations around this topic and whether monitoring in the studies picked up events that required dose changes. And then a quick follow-on on efficacy, any color on what you're targeting on relapse rate progression given we have no phase two to go off here. Thank you.
Speaker #4: Please go ahead .
Speaker #4: Please go ahead of
Speaker #5: Thanks for taking my questions . And I just kick perhaps off with Harry for support and insight over the thanking years . The questions , I guess for Vasan , Remy , you've talked avoiding liver monitoring in EMS , hy's about law competition recently and given no has been vocal avoiding monitoring in the monitoring has been involved when in the study .
Speaker #5: be Could difficult . So why don't you label just give us any color FDA on conversations around this ? And whether topic monitoring the studies picked up events that require dose changes then a quick ?
Vasant Narasimhan: Yeah, thanks, Sachin. So I think first on liver, I think we should first take a step back and note that we already have an approval and an approved label without any liver safety discussion in the label, which just points to the fact that Remibrutinib structurally does not have the off-target toxicities we believe that the structures of some of the other molecules do. And so we didn't have any of that in the existing CSU label. I think out of an abundance of caution, given the findings of the other competitors, FDA asked us for limited liver monitoring, to our understanding, that's more limited than the liver monitoring that our competitors have had to add to their programs.
Speaker #5: follow And on on efficacy . color on what you're targeting on relapse rate progression , given we have no phase two to go off here .
Speaker #5: you Thank .
Speaker #3: So I liver , I think first on Yeah . think we should first take a step Thanks , Sachin . back and note that we already have an approval , an approve label without any safety liver .
Speaker #3: discussion . In the Liver just points to the fact that which Remibrutinib structurally does not have target toxicities . the off We believe that the of some of the structures other molecules do .
Speaker #3: And didn't have any so that we any of that in the existing CSU label , I think out of an abundance of caution , safety given the findings of the other competitors , asked us for a our monitoring to understanding , that's more limited liver limited than the monitoring that our competitors have had to add to their programs .
Vasant Narasimhan: And our full plan is, assuming that we and as we've seen today, no liver signals in our study, we fully plan to advocate to the FDA that we should stick to the current label in the absence of any information, or really any data, to really change the current label with respect to that. I'd also note that in general, for competitors, when there is a Hy's Law case, at least to our understanding, whether it's one, two, three cases, that generally leads to REMS programs, leads to monitoring, does lead to warnings and precautions just given the safety risk that that creates for patients who have alternative therapies. And in RRMS, there's numerous alternative therapies, so safety is absolutely paramount. So I think that's our overall perspective on the safety.
Speaker #3: And our full plan is assuming that FDA and as we've seen to date , no liver signals in our We fully plan to to study .
Speaker #3: should advocate stick to the current label . And in the absence of any liver to to really information any data really change the current label with to respect to note that for , you know , in you know , general , for competitors , when there is a hy's law case , at least to our understanding one , two , , whether it's three cases that leads to Rems programs generally to monitoring , lead to does and precautions , just given the safety warnings risk that these creates that for for patients who have alternative that therapies .
Speaker #3: And our MS, there's in leads numerous alternative therapies. So safety is absolutely, absolutely paramount. So I think that's our overall perspective on the safety.
Vasant Narasimhan: We're very confident in overall Remy safety, and assuming 2 positive phase 3 trials this summer, the potential for this to be a very significant medicine. Now, with respect to efficacy, I think it's very fair to point out we don't have phase 2 data. We went to phase 3 based on the findings that we saw from competitors. But I think given that we know that we hit the target very well at 25 milligrams b.i.d. and we move up to 100 milligrams b.i.d. in this study, we think we'll definitely have strong target saturation. We think the molecule is very well designed. We look at the PK and the PD of the molecule. So that gives us confidence that assuming the class is effective against RRMS, we will have a compelling profile from an efficacy standpoint.
Speaker #3: We're very confident overall Remy . Safety and positive assuming two phase three trials this summer , the potential for this to be a very significant medicine .
Speaker #3: Now with respect to efficacy , I think it's very fair to point out we don't have phase two data . We went to three based on the we saw from findings that competitors .
Speaker #3: So, but I think, given that, we know that we hit the target very well at 25 mg BID and up to 100 mg BID in the study, as we move up, we think we'll definitely have strong targets.
Speaker #3: We think the very well molecule is designed . When we look PK at the and PD of the molecule . So that gives us confidence that assuming the class is effective against rrms will have a , we compelling profile from an efficacy standpoint .
Vasant Narasimhan: And with the safety profile and with the fact that we're established now in the market, having already launched, should give us a strong value proposition. Thanks, Sachin. Next question.
Speaker #3: And with the safety profile and fact that we're established now in the market , having already launched , should give us a strong value proposition .
Vasant Narasimhan: Thank you.
Operator: Thank you. We'll take our next question today. This is from Simon Baker, Redburn Atlantic. Please go ahead.
Speaker #3: Thanks , Sachin . Next question .
Speaker #5: Thank you .
Speaker #4: Thank you . We'll take our next question today is from Baker Rothschild . And Co Simon . Please go ahead And this .
[Analyst] (Redburn Atlantic): Thank you for taking my questions. 2 if I may, please. Firstly, just continuing on Remibrutinib. And going off from Sachin's question, I just wonder if you could give us your updated thoughts on the commercial opportunities here in MS because it kind of feels like that your enthusiasm for Remibrutinib in MS has increased over time. A couple of years ago, there was talk of almost MS playing second fiddle to CSU. So just updated perspectives on your thoughts on the commercial opportunity. And then moving on to Pelacarsen, you've now guided to a 2H 2026 readout. Given this is an event-based study, could you just give us any thoughts on potential risks and risk mitigation for this what appears to be significantly lower event rate?
Speaker #6: Thank you for taking questions . Two if I may my please . Firstly , on just continuing on , on Remibrutinib and and going from Sachin's question , I wonder if you could give us your updated thoughts on , the on on opportunities here in in Mis commercial because it kind of feels like that you're enthusiasm for Remy and Mis has increased over time .
Speaker #6: a couple That of years ago there was talk almost mis of being sort of playing second fiddle to CSU . So just updated perspectives on on your thoughts on the commercial opportunity and then moving on to Pelacarsen .
Speaker #6: And you've now guided to a 226 readout given this is an event based study , could you just give us any any thoughts on potential risks and risk mitigation for this ?
[Analyst] (Redburn Atlantic): Does this run the risk of creating additional noise in the study, or is that more than offset by the powering assumptions and the design that you've built in there? Any thoughts on that would be very helpful. Thanks so much.
Speaker #6: What appears to be significantly lower event rate ? Does this run the risk of additional creating noise in the study , or is that more than offset by the powering assumptions and the design that you've built Any thoughts on in there ?
Vasant Narasimhan: Yeah, thanks, Simon. So first on the commercial opportunity, I think it's really going to be data-driven. 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. And because of that, that still B-cell monoclonal antibodies will be the dominant class, but there will be a large number of patients that would want an oral option and who don't want to go through injectable therapy. I mean, as I noted in my slide, still 25% of patients in the US and 65% outside of the US are on DMTs and are not on injectable B-cell therapy. So there's a large market there on its own.
Speaker #6: that would helpful ? Thanks very much be very .
Speaker #3: Yeah . Thanks , Simon . So , so first on the commercial I think it's really be , going to data driven . I think our base case assumption is that an oral drug will to have the same level of struggle efficacy as monoclonal antibodies hitting in B-cell pathways in Ms. .
Speaker #3: And because of that, B-cell monoclonal antibodies will be the dominant class. But there will be a number of patients—a large number—who would want an oral option, who don't want to go on injectable therapy.
Speaker #3: through I mean , as I noted in my slide , still , 25% of patients in the US and the 65% outside of US are on that are dmts not and are not on B cell injectable B cell therapies .
Vasant Narasimhan: Then I think it will depend if the efficacy and safety profile overall, particularly the efficacy profile in the case of remibrutinib in our hands, is compelling enough to have a broader market. So I think we'll certainly see based on the data. But even if we take it as a given that there is a large B-cell monoclonal class out there, there is a large market or opportunity beyond that, which we think is important. And that, of course, is the question: with the brain-penetrant properties of our molecule, does that lead to other opportunities, either in SPMS or in the control of RRMS that provides another dimension? And that will all be data-driven as well. So in this case, I'll exceptionally take the second question, but if everyone could limit themselves to one question. Pelacarsen, so we expect a mid-year readout.
Speaker #3: there's a So large market there on on its own . And then I think it will depend if the if the efficacy and safety profile overall , efficacy particularly the profile in the case of Remi , in our hands is compelling to have , enough you know , a broader market .
Speaker #3: So I think we'll we'll certainly see based on , on on the data . But even even if we as a take it given that there is a large B cell monoclonal class out there , there is a large market opportunity beyond that , which we think is important , and that , of course , the question is with the brain penetrant properties of our molecule , does that lead to other opportunities either in spms or in the control of rrms that provide another will all be data as well dimension , and that .
Speaker #3: So in this case , I'll exceptionally take the second question . But if everyone could limit themselves to one question , Pelacarsen . So we expect a mid-year readout .
Vasant Narasimhan: The study is going to completion in terms of the number of events that we had originally outlined. We had powered up the study, you'll recall, during the process of the phase 3. So we feel like we're adequately powered to demonstrate both at the 70mg/dL cutoff and the 90mg/dL cutoff, the CVRR that we're targeting. And so I don't think there's necessarily any risk associated with going in full. I think what it does indicate is that the event rates are lower than what we had modeled from the published literature. And I think that's just something that is just the reality now that we've found. 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.
Speaker #3: You know , the study is going to completion in terms of the number of events that we had originally outlined . We had powered up the study .
Speaker #3: You'll recall , during the process of the phase three . So we feel like we're adequately powered to demonstrate both at the 70mg per DL cutoff and the 90 milligram per DL cutoff .
Speaker #3: The CV that that we're targeting . And so I don't think there's necessarily any risk associated with going in full . I think what it does indicate is rates that the event are than lower had modeled from the published literature , and I think that's just something that is just the reality .
Speaker #3: Now that we've found I , 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 .
Vasant Narasimhan: And I think that, of course, has an impact on event rates as well. So we'll see and look excited to see this data and hopefully creating an entire new class of medicines that can help a whole group of patients that have no other option. And so I think with a positive study, we have the opportunity to give these patients a hopeful solution against sudden cardiac death and some of the other things that can happen for patients with elevated Lp(a).
Speaker #3: And I think that , of course , has has an impact on rates as well . So we'll see . And excited to see this data and hopefully creating an entire new of medicines class that can help a whole group of patients that have no other option .
Speaker #3: And so, I think with a positive study, we have the opportunity to give these patients hope against sudden cardiac death and other things that can happen for patients with elevated LP.
Speaker #3: And so I think with a positive study , we have the opportunity to give these patients hopeful a against sudden cardiac death . And other things that can happen for patients with elevated some of the Little a .
[Analyst] (Redburn Atlantic): Great. Thank you very much.
Vasant Narasimhan: Next question, operator.
Operator: Thank you. The next question today is from Matthew Weston, UBS. Please go ahead.
Speaker #6: Great thank you very much .
Speaker #3: Next Operator .
Speaker #4: Thank you . And the next question today is from
[Analyst] (Redburn Atlantic): Thank you very much. Can I also add my thanks to Harry for all his support and best of luck for the future, Harry? Vas, Kisqali is building into a fantastic and highly profitable medicine for Novartis. And I guess the only challenge is it has an LOE just after your 2030 time window. What are the options in-house to extend the franchise further in breast cancer? And given the surge data that we've seen from a competitor, what other options are there from BD that could potentially, or is oncology, I should say, a category where BD looks like somewhere you should supplement the Novartis pipeline?
Speaker #4: Matthew Weston, UBS. Please go ahead with your question.
Speaker #7: Thank very much . you Can I also add my thanks to Harry for all his support and best of luck for the Harry future .
Speaker #7: Vaz Kisqali is building into a fantastic and highly profitable medicine for Novartis , and I guess the only challenge is it has an low .
Speaker #7: after Just your 2030 time window . What are the options in-house to extend the franchise further in breast cancer ? And third data that given the we've seen from a competitor , what other from are there that BD could potentially or is oncology , I should options say a category where BD looks like somewhere you should supplement the Novartis pipeline ?
Vasant Narasimhan: Yeah, so I think there's actually 2 questions in there, but I'll also take both of these, Matthew, because it's you, Matthew. With respect to Kisqali, I think right now we guide to a mid-2031 with the pediatric exclusivity that we would expect for this brand in the US. I think it's longer outside of the US depending on the market. 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, and we'll see what we ultimately learn. Of course, we also are advancing our radioligand therapy portfolio. We have two HER2 RLTs now in the clinic.
Speaker #3: Yeah . So I think there's actually two questions in there . But I'll also take both of these . Matthew , because it's Matthew , with to respect with respect to Kisqali , you know , I think right now we guide to a 2031 with the mid pediatric exclusivity that we would expect for this brand in the US .
Speaker #3: I think it's longer outside of the US , depending on the market . Our core goal at the is our moment Cdk2 , Cdk2 , and Cdk4 programs , all of which now are in the clinic and we're advancing as fast as we can to which of these see medicines can provide either additional benefit in the Kisqali setting or either in combination , or we'll see what what we ultimately learn .
Vasant Narasimhan: Those will be important to watch, as well as a novel bombesin RLT as well in breast cancer. So number of shots on goal, and I think those will all be very important for us to continue to lifecycle manage Kisqali, as you rightfully point out, beyond the mid-2030s. I always think about it as a full-year 2032 effect for this brand. Now, I think with respect to BD and M&A, I think absolutely. I mean, we see amongst our therapeutic areas that clearly oncology is one we'll have to focus on. So we'll continue to focus there. As we have, I would say we've had just more opportunities and traction in the last years in cardiovascular, immunology, and neuroscience. You've seen us do a large number of deals in those spaces.
Speaker #3: course , we also are Of advancing our radioligand therapy portfolio . We have two Her2 rlts now in the clinic . And those will be important to watch , as well as the neo bombesin RT as well .
Speaker #3: In in breast cancer . So a number of shots on goal . And I think those will all be very important for us to continue to life cycle manage as you rightly point Kisqali out , beyond the mid 2030s , I always think about it as a full year , 2032 effect for this , for this brand .
Speaker #3: I Now , think with respect to BD and M&A , I think absolutely , I mean , we see amongst our therapeutic areas that clearly oncology is one we'll have to focus on .
Speaker #3: So we'll continue focus to to there as we have I just more opportunities traction in the last and years in cardiovascular immunology and neuroscience .
Vasant Narasimhan: But we'll continue to see, and of course, it's a high priority to continue to build oncology now that we have the scale we're building from Scemblix, Pluvicto, Kisqali. And so if we find good opportunities, good assets, we'll certainly go after them. Next question.
Speaker #3: You've seen us do a large number of deals in those spaces , but we'll continue to see . And of course , as a high priority to continue to build oncology now that we have the scale we're building from Pluvicto Scemblix Kisqali .
Speaker #3: And so if we find good opportunities , good assets , we'll certainly go after them . Next question .
Operator: Thank you. Next question is from Peter Verdult, Citi. Please go ahead.
Speaker #4: Thank you. Next question is from Peter Vedat, BNP Paribas. Go ahead.
[Analyst] (Citi): Yeah, thanks. I'm Peter Verdult, Citi. Vas, just on Rapsido and Ianalumab, given we're now in an MFN world, how should we be thinking about ex-US launch plans for what are clearly mostly significant assets? Basically, just pushing my luck to see how specific you're comfortable being about changing in rest of the world's launch strategies for important assets like Rapsido and Ianalumab. Thank you.
Speaker #8: Yeah . Thanks . People BNP Paribas on just Rapsodo and given we're now in an MFM world , how should we be thinking about ex-US launch plans for what are clearly commercially significant assets and basically just pushing my luck to see how specific you're comfortable being about changing in the rest of the world .
Vasant Narasimhan: Yeah, so I think this is high in our minds. We're working through our strategies here on Rapsido. Given that it's already launched, of course, we would be exposed on the first pillar of the MFN approach, which is on the Medicaid rebate. It's more limited. I think there we can manage. We think we have good options to manage the ability to launch Rapsido globally. Of course, we'll have tighter pricing corridors, but that's something we think we can manage. Ianalumab is more complex as we get to launches in 2027 in the G7 plus countries. There, of course, it's on the entire market of US net price, not just Medicaid. So we're working through strategies. Absolutely, it's our aspiration to get these medicines launched in all of these markets given to patients that need them. But we certainly can't adversely affect the US market.
Speaker #8: Launch strategies important for assets like . And thank you .
Speaker #3: Yes , I is high think this on our minds . We're working through our strategies here on on Rapsodo . Given that it's already launched , of course we would be exposed on the first pillar of the MFN approach , which is on the Medicaid rebate .
Speaker #3: It's more limited. And I think there we can manage. We think we have good management of the options to be able to launch Rapsodo globally.
Speaker #3: Of course , we'll have tighter pricing corridors , but that's something we think we can manage . You is more complex as we get to launches in 2027 .
Speaker #3: the In g7+ countries there , of course , it's on the entire market of US net price , not just Medicaid . And so we're working through strategies .
Speaker #3: Absolutely . It's our aspiration to get these medicines launched in all of these markets given to patients that need them . But we certainly can't adversely affect the US market .
Vasant Narasimhan: And so we're just going to have to be thoughtful about looking at where are there opportunities to price appropriately for the value that Ianalumab brings. Given the PPP adjustments and some of the other elements of how pricing is looked at, are there things we can do to manage this? It's all in the works. I think we'll have a better sense over the course of this year on Ianalumab. But on Rapsido, we feel confident we have a way forward to get a global launch moving ahead.
Speaker #3: And so we're just going to have to be thoughtful about looking at where are there opportunities to price appropriately for the value that brings , given the PGP adjustments and some of the other elements of how pricing is looked at , are there things we can do to manage this ?
Speaker #3: It's all in the works . I think we'll have a better sense over the course of this year . On AB , but on Rapsodo , we feel confident we have a way forward to get a global launch .
[Analyst] (Citi): Thank you.
Vasant Narasimhan: Next question.
Operator: Thank you. Next question is from Steve Scala from TD Cowen. Please go ahead.
Speaker #3: Moving ahead .
Speaker #8: Thank you .
Speaker #3: Next question .
[Analyst] (TD Cowen): Well, thank you so much. On Pelacarsen, Novartis has said previously that a delay in the Horizon trial readout would stem either from overestimating the baseline risk or underestimating the treatment effect. Do you have a sense of what is at work here? I would think the baseline risk, if it were overestimated, would question the value of lowering Lp(a) in the first place. And I would think that Novartis should have a better handle on treatment effect based on early studies. So any color of Novartis's view at this point would be helpful. Thank you.
Speaker #4: Thank you . Next question is from Steve Scala from TD Cowan . Please ahead go .
Speaker #9: Well , thank you so on public Carson . Novartis has said that previously a delay in the horizon trial readout would stem either from overestimating the baseline risk or underestimating the treatment effect .
Speaker #9: Do you have a sense of what is at work here ? I would think the baseline risk , if it were overestimated , would question the value of interact or lowering LPA first place .
Speaker #9: And I would think that a better should have handle on on treatment effect based on early studies . So any color of Novartis view at this point would be Thank you helpful .
Vasant Narasimhan: I wish we knew, Steve. Honestly, obviously, I can only give you an opinion. I can't actually give you a fact because we're completely blinded and we have no database insights. We believe that we have appropriately estimated the baseline risk. And that's up to many rounds of looking at it. So it might be that that baseline risk is more prominent at a higher Lp(a) threshold. I think in my mind, it really comes down to what Lp(a) threshold are we appropriately thinking about the baseline risk and how at, and this is again, I think no way to know if this is correct, but my assumption is that at lower Lp(a) levels, there could be more interactions with LDL and other risk factors, and that Lp(a) becomes more dominant as you get to higher Lp(a) levels.
Speaker #9: .
Speaker #3: I wish we knew Steve . Honestly , I honestly I can only give you a opinion . I can't actually give you a facts because we're completely blinded and we have no data based insights .
Speaker #3: You know , we we believe that we have appropriately estimated the baseline risk . And that's up to many rounds of looking at it .
Speaker #3: So it might be that that baseline is more risk prominent at higher LP . Little a thresholds I think in my mind it really comes down to what LP little a threshold are we appropriately thinking about the baseline risk and how at and this is again I think in not no way to know if this is correct , but my assumption my is that at lower little A LP , levels , there could be more interactions with and other risk LDL factors .
Vasant Narasimhan: And because the risk goes up almost linearly with a higher Lp(a) level, that becomes the dominant risk factor. So the studies obviously have some portion of patients at the 70 to 90 to 70 to 100. We've, I think, announced in our papers that overall our median is 108. So that's kind of our best guess in terms of the risk profile and how we've estimated it. Obviously, we would love for this to be that our treatment effect is larger than we expect. And that would be the reason for this, but there's just no way to know that at this time.
Speaker #3: And that LPA becomes more dominant as you get to higher LP . Little A levels . And because the risk goes up almost linearly , that a higher LP , little A , that becomes the dominant risk factor .
Speaker #3: And so the study is obviously have some portion of patients at the 70 2 to 90 , 70 to 100 . We've I think , announced in our papers that , you know , overall our median is 108 .
Speaker #3: So you know that's that's a kind of our best guess in terms of the risk profile and how how we've we've estimated obviously we would love for this to be that , that our treatment effect is larger than we expect .
[Analyst] (Citi): Thank you.
Vasant Narasimhan: Next question.
Operator: Thank you. Next question comes from Richard Vosser, J.P. Morgan. Please go ahead.
Speaker #3: And that would be the reason for this. But there's just no way to know that at this time.
Speaker #9: Thank you .
Speaker #3: Next question .
[Analyst] (J.P. Morgan): Hi. Thanks for taking my question. Just a question on Invisma. Just how should we think about the ramp of that product in the US and ex-US? I could imagine that there are some patients that are potentially waiting for the therapy. So have you seen warehoused patients and how should we think about the launch? Thanks so much.
Speaker #4: Thank you . Next question comes from Richard Foster , JP Morgan . Please go ahead .
Speaker #6: Thanks for Hi . taking my question .
Speaker #10: Just a question its on visma . Just how should we think about the of that of in ramp the US and ex US could imagine that there are some patients that are potentially waiting for the therapy .
Vasant Narasimhan: Yeah, thanks, Richard. In general, for gene therapies, we see often a pretty fast ramp as we get through the kind of prevalent pool of patients. Then it kind of comes down to a more steady state. I think over the next 2 to 3 years, we would expect really at Invisma to penetrate the majority of the kind of relevant patient pool that it has and then come back down as we saw with Zolgensma more to a steady state because of the nature of the one-time therapy. So I think relative to other brands, the ramp will be on the faster side. It won't be in 6 months, but I think over the first few years, we'll get to peak relatively quickly and then come down from there. We do have, I think, warehouse patients. We do have patients that we really understand.
Speaker #10: So, have you seen warehouse patients, and how should we think about the launch? Thanks very much.
Speaker #3: Yeah, thanks, Richard. In general, for gene therapies, we often see a pretty fast ramp as we get through the kind of prevalent pool of patients.
Speaker #3: And then it kind of comes down to a steady more state . And I think over the next 2 to 3 years , we would expect really at Visma to penetrate the majority of the kind of relevant patient pool that it has and then come back down , as we saw with Zolgensma more to a steady state because of the nature of the one time therapy .
Speaker #3: So I think relative to other brands , the ramp will be on the faster side . It won't be , you know , in six months .
Speaker #3: But I think over the first few years we'll get to peak relatively quickly . And then and then come down from there do have , .
Vasant Narasimhan: We also have strong access, we think, in many markets. As we build that access forward, I think that will really allow us to maximize the medicine. Next question.
Speaker #3: I And we think we warehouse patients , we do have patients that we also have really understand . And we strong access . We think in many markets and as we build that access forward , I think that will really allow us to maximize the medicine .
Operator: Thank you. Next question is from Graham Parry from Citi. Please go ahead.
Speaker #3: Next question .
Speaker #4: Thank you . And next question is from Graham Parry from Citi . Please go ahead .
[Analyst] (J.P. Morgan): Great. Thanks for taking my questions. So reiterate the best wishes for Harry, of course. And then the question on Kisqali and the outlook for the year. So how much of the gross-to-net impact that was impacting fourth quarter carries through into the next year because of a different channel mix versus how much is one-off? And so to what extent does that give you an easy base for comparison in 2025 into 2026? And then any thoughts you have on the risk that oral SIRDs might pose to encroaching on CDK4/6 combinations in the adjuvant setting? Thank you.
Speaker #11: Thanks for taking my great questions. I reiterate the best wishes for Harry. Of course. And so, question on Kisqali and the outlook for the year.
Speaker #11: So, how much of the gross-to-net impact that was impacting fourth quarter carries into the next year through because of a different channel mix, versus how much is one-off?
Speaker #11: And so to what that give you extent does an easy base for comparison , in 2025 into 2026 ? And then any thoughts you have on the risk that might oral serds pose to encroaching on Cdk4 six combinations in the adjuvant setting ?
Vasant Narasimhan: Thanks, Graham. Great to have you back. On Kisqali, I think the higher gross-to-net, we believe, is a one-time effect where we saw higher Medicare utilization than we had forecast in 2025. We do expect as the early breast cancer launch continues to accelerate and our mix shifts to younger and younger patients that this will net out back towards where we had historically expected. I think we should be fine from that point forward. Harry wants to add something.
Speaker #11: Thank you
Speaker #3: Thanks , . Graham , and great to have you back on on Kisqali . You know , I think the the higher gross to nets we believe is a one time effect where we saw higher Medicare utilization than we had forecast in in 2025 .
Speaker #3: We do expect as breast the early cancer launch continues to accelerate and our mix shifts to younger and younger , that patients this will net out back .
Speaker #3: Towards where we had historically expected . And I think we we should be we be fine from should that point forward . And Harry wants to
Harry Kirsch: Yeah, just hi, Graham. Thank you very much. And by the way, everybody, for your nice words. So on Kisqali, I mean, one thing to note is that actually in Q1 2025, we had a positive gross-to-net at Mukul, as Mukul pointed out. So in Q1, that's a higher base due to one-timers. As Vas mentioned, the Q4, what we have noted here out of period adjustments. So if you take that out, it's really the true Q4 performance. And then the Q4 of 2026, there should be a bit of a lower base because of this negative this year. But overall, basically, these gross-to-net adjustments are all out of period. So one-timers and the underlying is what you see.
Speaker #1: Yeah .
Speaker #1: Graham . Thank you add something . very much . And by the Just . way , Hi , everybody , for your nice words .
Speaker #1: So , you know , I mean , one thing to note is that actually in quarter one of 25 , where the positive growth to net at mukul as Mukul pointed out .
Speaker #1: in So quarter one , that's a higher base . You know , due to a as was one timers mentioned , the quarter for what you what we have noted here out of period adjustments .
Speaker #1: It’s take out that, so if you really the true quarter for performance. And then Q4 of '26, there should be a bit of a lower because of this negative year.
Speaker #1: this But but overall the basically these gross net adjustments are all out of period . So one timers and the underlying is what you see .
Vasant Narasimhan: Then with respect to the oral SIRDs, we've had a lot of discussion, and we feel confident that when we look at the profile of Kisqali and what we hear from physicians, that physicians want a CDK4/6 inhibitor for patients who can benefit. They, of course, need to look for an endocrine therapy option. Certainly, the oral SIRDs now have the opportunity over time to become the standard-of-care endocrine therapy option. We already know that roughly half of patients in the early breast cancer setting in the US are already now on a CDK4/6. As we continue to penetrate that base of patients, we think that the opportunity will be CDK4/6 plus the choice of historical endocrine therapy or the oral SIRDs. That's how this market will play out.
Speaker #3: And then with respect to the oral oral serds , you know , we've had a lot of discussion we feel and confident that when we look at the profile of Kisqali and what we hear from physicians that physicians want a Cdk4 six inhibitor for patients who can benefit .
Speaker #3: And they, of course, need to look for an endocrine therapy option. Certainly, the oral SERDs now have the opportunity, over time, to become the standard of care endocrine therapy option.
Speaker #3: We already know that roughly half of patients in the early breast cancer setting in the US are already now on a CDK four six .
Speaker #3: And as we continue to penetrate that base of patients , think that we the opportunity will be Cdk4 six plus the choice of historical endocrine therapy or the oral steroids .
Vasant Narasimhan: At the margin, could there be some physicians who choose an older endocrine therapy plus a CDK4/6 or an oral SIRD and not a CDK4/6? Certainly, that dynamic will happen, but we don't expect that to be the predominant approach in the US or in any of the other core markets. That's what gives us confidence in the $10 billion+ guidance that we have and are sticking to. Next question.
Speaker #3: And that's how this market will play out at the margin. Could there be some physicians who choose an older endocrine therapy plus a CDK4/6 or an oral SERD and not a CDK4/6?
Speaker #3: Certainly , that dynamic will happen , but we don't expect that to be the predominant approach in the US or in other core any of the That's what markets .
Speaker #3: That gives us confidence in the $10 billion-plus guidance, and we are sticking to that. Next question.
Operator: Thank you. Next question today is from Seamus Fernandez, Guggenheim Securities. Please go ahead.
Speaker #4: Thank you . Next question today is from Seamus Fernandez , Guggenheim Securities . Please go ahead .
[Analyst] (Guggenheim Securities): Oh, thanks very much. And just would echo, Harry will miss you for sure. Vas, hoping you could maybe give us your thoughts on the overall food allergy opportunity within your overall portfolio. Obviously, Xolair has done extraordinarily well in this space with excellent growth opportunity. Just hoping to get your perspective on that as well as the opportunity that you see potentially within your broader portfolio, not just for the BTK, but beyond. Thanks so much.
Speaker #12: thanks Oh , very much . And just would echo Harry will miss you for sure . Hoping you could maybe give us your thoughts the on allergy food overall opportunity .
Speaker #12: know You within your overall portfolio . Obviously Xolair has done extraordinarily well in this space with , you know , excellent growth opportunities .
Speaker #12: Just hoping to get your perspective on that as well as the opportunity that you see potentially within your broader portfolio , not just for the BTK , but beyond .
Vasant Narasimhan: Yeah, thanks, Seamus. We've had a long history looking at food allergy. It goes back to a medicine some of you will remember called QGE031, which was a high-affinity anti-IgE that was supposed to be a follow-on for Xolair. In the end, we weren't able to show a stronger effect than Xolair has ultimately shown in food allergy. So we know the space well. Once we saw the phase 2 data for Remibrutinib in food allergy, I think it changed our perspective to really think now, how could we build this out to be a significant market opportunity? So we'll be sharing that data, as I mentioned, in the coming month or 2. And with that dataset and now the agreement with FDA on how to advance into phase 3 studies, we see the option for a safe oral medicine to be able to hopefully be given broadly to patients.
Speaker #12: Thanks so much .
Speaker #3: Yeah . Thanks , Seamus . We've had a long history looking at food allergy . It goes back to medicine . Some of you will remember called QD 031 , which was a high affinity Ige Anti-ige that was supposed to be a follow on for Xolair .
Speaker #3: In the end , we able to show weren't stronger effect than than Xolair . shown Ultimately in food allergy . So we know the space well .
Speaker #3: You know , once we saw the phase two data for Remibrutinib and food allergy , I think it changed our perspective to really think , now , how could we build this out to be a significant market opportunity ?
Speaker #3: sharing that we'll be So data . mentioned As I , in the coming month or two . you know , And with that data set and now the agreement with FDA on how to advance into phase three studies , we see the option for a safe oral medicine to able to be hopefully be given broadly to patients .
Vasant Narasimhan: And you know that a lot of the patients in food allergy that are most interested or at risk to be treated are children. And so versus ongoing injections, having an oral, high-efficacy, safe option, we think would be pretty compelling. So I think overall, we see food allergy as a multi-billion-dollar opportunity. Certainly, with the potential to make something major out of this, we're going to obviously run through the phase 3 program. We're excited to share the phase 2 data as well. And then beyond that, now we are evaluating: are there other opportunities within the pipeline earlier at Novartis and, of course, externally, as always, to see, can we further bolster our food allergy portfolio? So I think it's definitely a shift, but something we're getting quite excited about. Next question.
Speaker #3: And you know that a lot of patients the in food allergy that are most interested or at risk to be treated are children .
Speaker #3: And so versus ongoing injections , having an oral high efficacy , safe option , we think would be pretty So I compelling . overall think we see food allergy as a multibillion dollar opportunity .
Speaker #3: And certainly, with the potential to make something major out of this, we're going to obviously run through the Phase, Phase Three program.
Speaker #3: We're excited to share the phase two data as well. And then beyond that, now we are evaluating, are there other opportunities within the pipeline?
Speaker #3: Earlier at Novartis and of course , externally , as always , to see can we further bolster our food allergy its So I think portfolio .
Operator: Thank you. Next question is from James Gordon, Barclays. Please go ahead.
Speaker #3: a definitely a shift , but something we're getting quite excited about Next . question .
Speaker #4: Thank you . Next question is from James Gordon , Please go Barclays . ahead .
[Analyst] (Barclays): Hello, James Gordon from Barclays. Thanks for taking the question. The question was on Pelacarsen and what a win now looks like. So you talked about a potentially lower event rate. But where is the latest magnitude of efficacy bar? Because I think the original design was a 20% benefit in the broader population and a 25% benefit in a narrow population with a longer study and maybe some other tweaks. Is that still the minimum? Is there a possibility that you could actually have a benefit for either of those groups that was statistically significant but didn't quite hit that hurdle? So would that still be a product with strong commercial prospects?
Speaker #13: .
Speaker #12: .
Speaker #13: James: Hello, Gordon from Barclays. Thanks for taking the question. The question was on pelacarsen and what a win now looks like.
Speaker #13: you talked So about a potentially lower event rate . But where is the latest magnitude of efficacy . Because I think the original design was a 20% benefit in the broader population .
Speaker #13: And a 25% benefit narrower in the population . But with study and the longer maybe some other tweaks , is that still the minimum ?
Speaker #13: Is there a possibility that you could actually have a benefit those for either of groups that were statistically significant , but hit that didn't quite hurdle ?
Vasant Narasimhan: Yeah, thanks, James. So you are correct. It is powered for 20% in the 70 mg/dL group and 25% for the 90 mg/dL group. We can win on the study with a relative reduction that's lower than that. And so certainly, there is the opportunity to win with CVR in the mid-teens. I think we'd have to evaluate, I think, for patients who have no other option. And if we were to win at that lower level, what would be the right approach to bring it to market? And that's something we'll have to see based on the data. But that's certainly something we'd have to look at. Of course, we hope for a, I mean, how much higher CVR impact either at the lower cutoff or the higher cutoff. But we're going to ultimately have this to be data-driven.
Speaker #13: That still be so, would— and if a commercial strong product with prospects—
Speaker #13: ?
Speaker #3: James . are It So you correct . Yeah . Thanks , is a 20% powered for 20% in the 70mg per DL group and 125% for the 90mg per We DL group .
Speaker #3: Can WIN study on the A relative with reduction, lower than that. And so certainly there is the opportunity to win with CVR in the, I think we'd have to, mid-teens.
Speaker #3: evaluate , I think for patients who have no other option . And if we were to win at that lower level , right approach to bring be the what would it to market ?
Speaker #3: that's And have to see something we'll on the based based that's we'd have certainly something to look data . But at . Of course , we mean , much for .
Speaker #3: hope higher I CVR impact either at the lower cutoff or the higher cutoff , going to have but we're this to ultimately have be driven .
Vasant Narasimhan: There have been no other changes, though, from a protocol standpoint, from a study design standpoint. Everything is as it was when we originally started the study with respect to powering, etc.
Speaker #3: data be There have been no other though , changes , from a study standpoint , from a protocol standpoint , is as it was everything we when originally started the study with respect to powering , etc.
[Analyst] (Barclays): Thank you.
Vasant Narasimhan: Next question.
Operator: Thank you. Next question is from Michael Leuchten from UBS. Please go ahead.
Speaker #3: .
Speaker #13: Thank you .
Speaker #3: Next question .
Speaker #4: Thank you . Next question is from Michael Luton from Jefferies . Please go ahead .
[Analyst] (UBS): Thank you. Question for Harry, please, given it's your last time with us, and thank you. Harry, the SG&A expenses in the fourth quarter were extremely tight. Very good performance. Dara helped you to gear the margin in underlying terms. As I think about the margin for 2026, obviously, you do have the Avidity dilution. But if that SG&A control continues, I struggle to see how you're going to get as much dilution, especially if Avidity doesn't quite close as quickly as maybe it could. So can you just talk about the repeatability of that SG&A performance in the fourth quarter into 2026?
Speaker #14: Thank you . Question for Harry . Please . Given it's your time at last thank you . us . And The expenses in the fourth quarter were extremely tight .
Speaker #14: Very good performance there . Helped you to . Gear the margin underlying terms , as I think about the margin for 2026 , obviously you do have the ability dilution .
Speaker #14: But if that control struggle to see continues , I how you're going to get as much dilution , especially if avidity doesn't close as quite quickly as it could .
Harry Kirsch: Yeah, thank you, Michael. Actually, any 2026 question is kind of for Mukul, so I will hand over in a second. But historically, we always had quite an increase in Q4. So we took this year to say, "Look, this is inefficient. Do you have such a peak in a quarter where you have one to two weeks of Christmas and you have also in the US Thanksgiving and so on? It shouldn't be actually a big peak here." So we took that in order to even it out. And overall, we will continue on Mukul. Of course, we'll drive productivity programs, right? But Avidity, just one thing.
Speaker #14: maybe can you just talk So about the repeatability of that SG&A fourth performance in the quarter
Speaker #1: Thank you , Yeah .
Speaker #1: Michael . Actually , any into 2026 ? 2026 question is kind of for will Mukul . So I hand over in a second .
Speaker #1: But you know had , historically we always quite an increase in quarter four . So we took this year to say is look this inefficient .
Speaker #1: to have such a peak in , in a such a quarter where you have , you know , You know , 1 to 2 weeks of and you Christmas also the have US Thanksgiving and shouldn't be on .
Speaker #1: So actually, a big it. So, we peak here. Took in that too, to even order a bit out and overall continue on.
Harry Kirsch: I mean, a day before Q3 earnings, when we took you all through the Avidity deal, we said it would be a 1% to 2% margin point dilution effect given the unusually high development cost burden the next 2 to 3 years of a late-stage development product with a very expensive medicine from a COGS, especially when it is under contract manufacturing. So not everybody has figured this into the consensus. It's okay when people don't follow everything we say, but we have mentioned it to you. And 1 to 2 points, if you say 1.5, that's pretty much what you get when you have a low single-digit increase on sales and a low single-digit decrease in operating income. So we feel we have implemented exactly that; without Avidity would have been unchanged margin, basically. But Mukul, what do you think?
Speaker #1: we will Of course will drive productivity . Right . programs But avidity just one thing . I mean , we a when a quarter three earnings , you know day before took you when we all through the avidity deal , we said it would be a 1 to 2% margin point dilution effect given the unusual high development cost burden .
Speaker #1: The next a late 2 to 3 years of stage development product with a very expensive medicine from a Cox , especially when it is under under contract manufacturing .
Speaker #1: So everybody has figured not into the this consensus , right ? It's okay when people don't follow everything we say , but we have mentioned it to you and 1 to 2 points .
Speaker #1: If you say one and a half , it's pretty much what you get when you have a low single digit increase on sales and a low single digit decrease in operating income .
Speaker #1: we feel we have So implemented exactly that avidity would have without been Margin unchanged . basically . But what do you think ?
[Analyst] (Barclays): Yeah. No, Harry said it all. I think the short answers, the short add-ons to the answer that Harry gave was the SG&A cost control productivity plans within the organization. It's something that we as a company feel very proud of and what has been achieved in the last four or five years. And as we go into our next five-year journey, this will absolutely continue going forward. There is a certain bit of margin dilution that we had predicted. And that's the reason that we gave clarity on H1, H2. Because if you look at how once the GX for this year are going to come off the base, we actually see core operating income starting to grow. And that kind of sets the base or sets the expectations for what to expect of our P&L in the next four years to come.
Speaker #2: Yeah , Harry said it all . I think as the short answer is the short add ons to the answer that Harry gave was the cost control , productivity plans within the organization is something that we as a company feel very proud of .
Speaker #2: On what has been achieved last in the four or five years. And as we go into our next five-year journey, this will absolutely continue going forward.
Speaker #2: There is a certain bit of margin dilution that we had predicted , and if we . And reason that we that's the gave clarity on H1 , h2 because if you look at how once the go for this year are going to come off the base , we see actually core operating income starting to grow and that kind of , the sets base or sets , the sets , the for what expectations to expect of our PNL in the next .
Vasant Narasimhan: Thank you both. Next question.
Operator: Thank you. We'll take the next question. This is from Thibault Boutherin from Morgan Stanley. Please go ahead.
Speaker #2: For years to come .
Speaker #3: both . Thank you Next question .
Speaker #4: Thank you question . And next . We'll take the this is from Thibault Boucheron from Morgan Stanley . Please go ahead .
[Analyst] (Morgan Stanley): Yes, thank you. Just a question on Cosentyx and the dynamic in the HS market. It looks like the shares have been stabilizing for some time between Cosentyx and the main competitor in terms of NBRX and TotalScript. So from here, is it fair to assume that both drugs would grow in line with the market? And I think Novartis used to say the HS market, we should expect a growth around 15%. So I just want to know if it's the type of growth that you're still seeing today.
Speaker #15: Yes . Thank you . Just a question on the Cosentyx and dynamic in the market . It looks like the shares have been stabilizing for some time between Cosentyx and the main competitor in terms of NB and total scripts .
Speaker #15: So from here , is it fair to assume that both drugs should grow in line with the market ? think Novartis And I to say the market we should expect a growth around 15% .
Vasant Narasimhan: Yeah, thanks for the question, Thibault. 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. And then we see the two other medicines splitting the remainder. We're doing very well in the naive population. And then in the switched segment, we see our competitor performing very well. So I think that's kind of the dynamic. We've seen that dynamic kind of stabilize now. So we would expect that dynamic to continue going forward. So I think both all brands will grow based on the market. Now, clearly, the market potential here is quite large. It's just a matter of how effective we are at getting patients to come in to get treatment. So we continue to see this kind of $3 to $5 billion market opportunity.
Speaker #15: So just want to know the type of if it's growth that you're still seeing today .
Speaker #3: Yeah . Thanks for the question , Thibault . So you rightfully point out we've seen stabilization in the overall NBR share in the market .
Speaker #3: I noted , we're kind As of in this 48 to 50% range . And see the two other then we medicines splitting the remainder .
Speaker #3: very We're doing well in the naive population . And then in the switch switch segment we see our competitor well . So performing very I think kind of the that's dynamic .
Speaker #3: We've seen that dynamic kind stabilize now . So we would of expect that dynamic to continue forward . So going both I think brands will grow based all on the market .
Speaker #3: clearly the market Now potential here is quite large . It's just a matter of how are effective we at getting patients to come in to get to get to get So we continue treatment .
Vasant Narasimhan: But could it be larger if we were able to mobilize with two competitors and potentially more future competitors coming in, the market growing faster, certainly? And we'd, of course, want to capitalize on that. And that's part of the reason why we study Rapsido in HS because we see the opportunity here to build this market, hopefully with a high-efficacy, safe oral to then go make the market even larger. So something we'll continue to work to build and hopefully get more of these patients who are kind of lost to treatment. Probably we're on a TNF, ultimately not successful, get those patients back into the medical home and back on therapy. Next question.
Speaker #3: to see this kind of 3 to $5 billion market But could opportunity . it be larger if we were able to mobilize with two competitors and potentially more future competitors coming in the market , growing faster ? Certainly .
Speaker #3: to see this kind of 3 to $5 billion market But could opportunity . it be larger if we were able to mobilize with two competitors and potentially more future competitors coming in the market , growing faster ?
Speaker #3: And we of course want to And that's part of the capitalize on that . reason why we study Rapsodo in in us , see the because we opportunity here to build this market , hopefully with a high efficacy , safe oral go make the to then market even something we'll larger .
Speaker #3: to work continue So build hopefully get to and more of these patients who are kind of lost to treatment . Probably . We're TNF , ultimately not successful .
Speaker #3: on a Get those back medical home into the patients and back therapy on . Next question .
Operator: Thank you. Just a reminder, if you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. We will now take the next question. This is from James Quigley from Goldman Sachs. Please go ahead.
Speaker #4: a Just reminder if you ask a would like to question , you will need Thank you . to star one and one on your press telephone and wait for to be your name announced .
[Analyst] (Goldman Sachs): Great. Thank you for taking my questions and my thanks and congrats to Harry as well for the next chapters. My question's on the Lp(a) portfolio. So as you showed in the slides, you've started a new trial, a phase 2 trial for DIA235. Firstly, what are the dosing intervals they're going to be testing for that drug? And secondly, at the meeting management event, Vas, you were saying that if Horizon were positive, that could then lead a decision to move some of the longer-acting Lp(a) straight into phase 3. So are there other assets in the portfolio that you're holding back, waiting for Horizon to move into phase 3? Is this phase 2 a function of a pushout in Horizon, or is it just you want to see more data beforehand before making a final decision here on which assets to take forward? Thank you.
Speaker #4: take the next We will now question . This is from Quigley from James Goldman go ahead Sachs . Please .
Speaker #16: Thank you for taking my questions . And Great . my and congrats to Harry as for the my thanks well chapters . My question is on the LP portfolio .
Speaker #16: So as you showed in the slide , you started a new trial , a phase two trial for DII two , three , five .
Speaker #16: Firstly , what are the dosing intervals ? They're going to be testing for that drug . And secondly , at the media management event , as you are saying , that horizon if were positive , that could that could then lead a decision to move some of the long acting LP , a straight into phase three .
Speaker #16: So are there other assets in the that you're portfolio holding waiting for back to move horizon into phase three ? this of a of a of push out phase two a function in is it just or you want to horizon , see more data before making beforehand a final decision ?
Vasant Narasimhan: Yeah, thanks, James. So for DIA235, our partner, Argo Biopharma, I think publicly released that this has had already strong data in the early phase 2 study and has a potential for an annual dosing interval. And we are prepared to move that program directly into phase 3 based on the Horizon dataset. So there's no change in our plan. There might be different things happening between our studies and their studies, etc. But our strategy very much is based on the Horizon readout to then, based on the data we've seen with DIA235 on an annual dosing interval, to move that forward then into late-stage studies. We do have, of course, a range of other programs earlier stage as well on a range of cardiovascular assets.
Speaker #16: Here on which assets to take forward ? Thank you .
Speaker #3: Yeah . Thanks , James . So for Dia 235 . Our partner Argo Biosciences , I think publicly released that this is has had , you know , already strong data early phase two in the study and has a potential for an annual dosing interval .
Speaker #3: And we are prepared to move that study that program directly into phase three based on horizon the data set . So there's no change in our plan .
Speaker #3: I don't there might be different things happening between our studies and their studies and etc. , but our strategy very much is on the based horizon readout to then based on we've the data seen with Dia two , three , five on an annual interval , to move that dosing forward , then into late stage studies , we do have , of course , a range of other programs .
Vasant Narasimhan: We've talked about that in the past: HMG-CoA reductase, annual PCSK9, of course, the ANGPTL3 siRNA, and then combination programs as well that we're working on both at the six-month interval and at the one-year interval. Both because we need to lifecycle-manage Leqvio, but also be prepared that if pelacarsen's positive, the Horizon's positive, to be ready to come with what we think will be the preferred market option. We want to be ready for all these eventualities.
Speaker #3: Earlier as stage well . cardiovascular range of On on a talked about that in the past assets . We've . HMG-CoA reductase annual Pcsk9 .
Speaker #3: Of course , the angiotensin two siRNA . And then combination programs as well that we're working on both at the six month interval and at the one year interval .
Speaker #3: And so both because we need the lifecycle manage leqvio , but also be prepared that if pelacarsen is positive , the horizon is to positive , to come be ready with what we think will be the preferred market option .
[Analyst] (Goldman Sachs): Great. Thank you.
Operator: Thank you. And the next question is from Peter Verdult, BNP Paribas. Please go ahead.
Speaker #3: We want to be ready for all these eventualities.
Speaker #16: Great . Thank you .
Speaker #4: Thank you . And the next question is from Verdot , BNP Paribas . Peter Please go ahead .
[Analyst] (BNP Paribas): Yeah. Thanks, Peter Verdult, BNP. Just a follow-up for you, Vas, on the pipeline. Just on this basket of cell therapy programs in autoimmune, I think some of them do read out next year. Just wonder if you've got it in the top of your head in terms of which ones, which indications, and perhaps a general temperature check on your behalf in terms of your level of enthusiasm for these programs. Thank you.
Speaker #8: Thanks , Peter . BNP , Yeah . just a follow up for you on the pipeline . Just on these basket of cell therapy programs in autoimmune .
Speaker #8: I think some of them do read out next year . Just just wondering if you've got it in top of your head in terms of which ones which indications and perhaps a general temperature check on your behalf in terms of your level of enthusiasm for these you programs ?
Vasant Narasimhan: Yeah, thanks, Peter. We remain enthusiastic. We have a huge effort internally on YTB as a first instance, currently in pivotal studies aligned with FDA over 4 indications, and then with follow-on programs that are now in proof-of-concept studies, in 4 additional indications as well, and then additional exploratory work that's ongoing. And then behind that, trispecific and bispecific monoclonals also to explore, can there be alternative options for certain patient groups in the immune reset? I think the first readouts we'll have will be in SLE lupus nephritis. That's building off of the data we presented last year on 20-23 or 24 patients where we showed, I think, pretty spectacular results for those patients in terms of rewinding the progress of their disease other than the permanent damage that had happened to the kidneys. And so quite exciting data.
Speaker #8: Thank
Speaker #8: .
Speaker #3: Yeah . Thank you .
Speaker #3: We remain enthusiastic. We have a huge effort internally on TB. The first instance is currently in pivotal studies, aligned with FDA over four indications.
Speaker #3: And then with follow on programs that are in proof of now concept studies in three for additional as indications well . And then additional exploratory work that's ongoing .
Speaker #3: Then, and that behind, try and bispecific monoclonals also to explore. Can there be alternative options for certain patient groups in the immune reset?
Speaker #3: I think the first readouts we'll have will be in SLE , lupus nephritis . That's building off of the data we presented last year on 20 , 23 or 24 patients , where we showed , I think , pretty spectacular results for those patients in terms of rewinding the progress of their other disease , than the permanent damage that had happened to the kidneys .
Vasant Narasimhan: That's allowed us, I think, to move forward on that study quite quickly. But we also are advancing all the other programs. And some of them, if we're fortunate, might even be able also to read out next year depending on enrollment patterns and enrollment timelines. So we're advancing these as fast as possible. Depending on the program, many of them have alignment with FDA that we can file off of a single arm and then continue on to provide data on randomized datasets. Others need the randomized upfront. So that all varies based on indication. But I think a lot of enthusiasm and focus inside the company. Thank you.
Speaker #3: so And quite exciting data that's allowed us , I think , to move forward on that study quite , quite quickly . But we also are advancing all the other programs and some of them , if we're fortunate , might even be able also to read out next year , depending on enrollment patterns and enrollment timelines .
Speaker #3: So we're advancing these as fast as possible depending on the program . Many of them have alignment with FDA that we can file off of a single arm .
Speaker #3: And then continue on to provide data on randomized data sets. Others need the randomized upfront. So that all varies based on indication.
Operator: Thank you. We'll now take the next question. This is from Michael Leuchten from UBS. Please go ahead.
Speaker #3: But I think a lot of enthusiasm and inside the focus company.
Speaker #8: Thank you .
Speaker #4: Thank you . We'll now take the next question . And this is from Michael Leuchten from Jefferies . Please go ahead .
[Analyst] (UBS): Oh, thank you for the follow-up. Vas, just on Scemblix, you helpfully provide the shared data across lines of therapy for the product. It looks like it's plateauing in first line in the US a little bit over the last few quarters. What's stopping the momentum to continue?
Speaker #14: thank you for the follow up . Oh , Was just on Scemblix . You helpfully the provide share data across lines of therapy product .
Speaker #14: Looks like for the IT, it's plateauing in first line in the US a little bit over the last few quarters. What's stopping the momentum to continue?
Vasant Narasimhan: Yeah, thanks, Michael. So we have looked into that. One thing to note is the data is very noisy because with CML, it's a rare disease. Most physicians only see one or two patients. And so the data here always is getting restated. Overall, our view based on our internal assessments is we continue to see steady share growth on the frontline setting. Actually, I would say our frontline share growth is ahead of our plan and our original planning assumptions. And so we see the opportunity here to really continue to grow. We have really strong broad access. One of the biggest things we're trying to overcome is perception that we don't have strong access. So get that access perception to where we want it to be.
Speaker #3: Yeah . Thanks , Michael . have looked So we into that . You know one thing to note is , our very is because noisy the data with with CML it's a rare disease .
Speaker #3: physicians Most only see 1 or 2 And patients . so you know the data here always is getting restated . Overall our view based on our assessments is we internal continue to see steady share growth on the frontline setting .
Speaker #3: I would say our Actually , frontline share growth is ahead of our plan . original planning . assumptions And And so we see the opportunity here to really continue to grow .
Speaker #3: We have really strong , broad access . One of the biggest trying to things we're is perception that overcome have we don't strong access .
Vasant Narasimhan: And then, of course, as we've outlined in the past, you do have Gleevec loyalists out there who want to stay with a product that they've used for a long period of time. That will be more of a refractory group. But to get from the mid-20s up to the 40% to 50% share range is absolutely what our ambition is, and we see a path to get there.
Speaker #3: access So get that perception to where we want it to be . And then of course , as we've outlined past , you have do Gleevec in the loyalists out there who want to with a stay used for a that they've product long period of time that will be more of a refractory group .
Speaker #3: But to get from the mid 20s up to the is 40 to 50% share range our absolutely what ambition we see a get is .
[Analyst] (UBS): Thank you.
Vasant Narasimhan: Next question. Or I think this might be the last question, operator.
Operator: Thank you. So the last question today is from James Quigley from Goldman Sachs. Please go ahead.
Speaker #3: And
Speaker #3: path to there .
Speaker #14: Thank you .
Speaker #3: question or this might be the last question . Operator . Next
Speaker #4: you Thank . So the last question today is from James Quigley from Goldman Sachs . Please go ahead
[Analyst] (Goldman Sachs): Hello. Thank you for taking the follow-up. I've got one quick one on Zigakibart. The data's been pushed out a little bit in order to have the eGFR data on the label at launch. But as you think about sort of the strategy here with your other assets, whether you had the UPCR data first and then adding the eGFR data, is this a case that the data were quite close together so it was worth having a delay? Just trying to understand the rationale here versus the other mechanism. Or is there something around the Zigakibart mechanism that could lead to a stronger benefit on eGFR relative to UPCR? Thank you.
Speaker #4: .
Speaker #16: Hello . follow up . taking the Thank you for I've got one quick one on . The data has been pushed out a little bit in order to have the data EGFR on the label at launch , but as you think about sort of the strategy here with , with your other assets , whether you had the upcr data first and then adding the , the this a case GFR data , is that the were quite data close together ?
Speaker #16: So it was worth having having a delay just trying to understand the rationale here versus the other mechanism . Or is there something around the mechanism that could lead to a stronger benefit on EGFR relative to Upcr ?
Vasant Narasimhan: Yeah, it's a great question, James. I think when we looked at the number of competitors entering in the anti-APRIL space, we asked ourselves, given we already have a strong portfolio in the nephrologist's office, what would give us the most compelling data package to kind of cut through all of the various launches that are ongoing? And we felt coming right away with hopefully the second medicine with a full approval, clear proteinuria reduction, and eGFR benefit would give us a very compelling proposition. I mean, theoretically, assuming everything goes as we hope, we would have 3 medicines in IgAN with eGFR outcomes benefit across Fabhalta, Venrafia, and Zigakibart. And that would give us a very compelling proposition. So we thought that was prudent given that the time that passes here is 3 quarters. It's not the end of the world.
Speaker #16: Thank you .
Speaker #16: Thank you .
Speaker #3: James . I question , think when we looked at the number It's a great of competitors entering in in the anti-april space , we asked ourselves , given we already have a portfolio strong in the nephrologists office , what would give us the most data compelling package to kind of cut through all of the various launches that are that are ongoing .
Speaker #3: And we felt coming right away with hopefully the second medicine with a full approval , clear proteinuria reduction and EGFR benefit would give us a very compelling proposition .
Speaker #3: I mean, theoretically, assuming everything goes as we hope, we would have three medicines in IgAN with eGFR outcomes benefit across the board and Ben Rafia Kibar, and that would give us a very compelling proposition.
Vasant Narasimhan: And then we would have a much more compelling dataset to provide to FDA.
Speaker #3: So we thought that was prudent , given that the time that passes here is three quarters , it's not the end world . And then we would have of the a much more compelling data set to provide to FDA .
[Analyst] (Goldman Sachs): Got it. Thank you.
Vasant Narasimhan: All right. Well, thank you all very much for joining the conference call. We'll look forward to keeping you up to speed. We wish you all a great 2026. Thank you.
Speaker #16: Great . Thank you .
Speaker #3: All right . Well , thank you all very for much joining the look forward conference call . to We'll keeping you up to speed .
Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker #3: And we wish you all a great , great 2026 . Thank you .
