Novartis targets 5%-6% annual sales growth until 2030 on key drugs

Novartis projected currency-adjusted sales growth of 5–6% through 2030 and raised peak sales forecasts for Kisqali to at least $10 billion (from $8 billion) and Scemblix to at least $4 billion (from $3 billion), noting eight approved drugs with $3–10 billion peak potential. The company is using pipeline strength and the proposed $12 billion Avidity Biosciences acquisition (expected H1 2026) to offset patent expiries—saying the deal lifts its 2024–29 annual sales growth to 6% but will impose a 1–2 percentage-point drag on margins—and is targeting a core operating margin of at least 40% by 2029 (41.2% in the first nine months of 2025). Although Q3 results were roughly in line with forecasts, weaker margins and a slowdown in older-product sales remain investor risks.

Analysis

Novartis projected currency-adjusted sales growth of 5%–6% through 2030 and upgraded peak-sales forecasts for key oncology assets, raising Kisqali to at least $10 billion (from $8 billion) and Scemblix to at least $4 billion (from $3 billion); management also highlighted eight approved drugs with $3–10 billion peak potential. These guidance upgrades were presented alongside a planned $12 billion acquisition of Avidity Biosciences, which the company says lifts its 2024–29 annual sales growth to 6% (from 5%) but will create a 1–2 percentage-point drag on core operating margin.

Novartis reported third-quarter results roughly in line with forecasts but noted weaker margins and a plateau in older-product sales such as Entresto, leaving execution risk on the table despite pipeline momentum. The Avidity deal is expected to close in H1 2026, and management targets a core operating margin of at least 40% by 2029 versus 41.2% in the first nine months of 2025, implying limited near-term margin expansion and potential integration costs.

Market sentiment is moderately positive given the upgraded drug trajectories, but the core investment thesis now hinges on commercial uptake of Kisqali and Scemblix, successful integration of Avidity, and stabilization of legacy-product sales to prevent sustained margin erosion.

Key Decisions for Investors

• Consider a modest overweight to Novartis to capture upside from upgraded Kisqali and Scemblix forecasts, but size positions conservatively to reflect integration and patent-expiry risk
• Monitor quarterly uptake and peak-sales trajectory for Kisqali and Scemblix, watch Avidity deal milestones and any announced integration or one-off charges, and track core operating margin progress toward the 40% by-2029 target before increasing exposure
• Use hedges or reduce exposure if upcoming quarters show continued margin compression or persistent declines in older-product sales, as those trends would materially weaken free-cash-flow and valuation