The Swiss pharmaceutical multinational Novartis has closed the third quarter of the year with a net profit of 1.196 billion dollars (1.072 billion euros), which implies a 70% drop compared to the same period of the previous year. This sharp decline is mainly explained by a negative impact of 1.900 billion dollars (1.704 billion euros) after failing to meet the objectives in the research of the drug against myotonic dystrophy del-desiran.
In parallel, the company recorded total revenues of 14.522 billion dollars (13.032 billion euros), which represents a year-on-year increase of 4%. However, the operating profit between July and September decreased by 61%, to 1.843 billion dollars (1.653 billion euros), reflecting the effect of the extraordinary items linked to the experimental drug.
The effort in Research and Development (R&D) surged by 75% compared to the previous year, to 5.150 billion dollars (4.621 billion euros), by integrating the accounting adjustment related to del-desiran. At the same time, the line item for other expenses nearly quintupled, to 1.575 billion dollars (1.413 billion euros).
"This charge occurred after the results of the phase III Harbor study in patients with DM1 --myotonic dystrophy type 1-- were known in September 2026, which did not reach its primary objective. Signs of clinical activity were observed in the secondary objectives and exploratory analyses. Novartis is evaluating the complete set of data and plans to engage in dialogue with health authorities about the development trajectory of this asset," they indicate in their quarterly accounts report regarding the impact of the drug.
The clinical setback had an immediate reflection in the stock market: at the beginning of September, Novartis shares fell by around 10% on the Zurich Stock Exchange following the publication of the study results. However, during the session on this Tuesday, the pharmaceutical company's shares were appreciating by around 1.5% in the Swiss market.
If impairments and other extraordinary items are excluded, the company's adjusted net profit shows a positive evolution, with an increase of 8%, to 4.655 billion dollars (4.176 billion euros), reflecting the strength of the underlying business.
In the accumulated results of the first nine months of the year, Novartis' net profit stood at 7.609 billion dollars (6.826 billion euros), 34% below that recorded a year earlier. In contrast, revenue in that period increased by 2%, reaching 42.043 billion dollars (37.720 billion euros).
Looking towards the end of 2026, the company has revised its forecasts upwards and now anticipates single-digit growth in adjusted operating profit, whereas it previously expected a decline. Regarding net sales, it maintains its guidance for a single-digit increase for the entire year.
"Novartis recorded solid sales growth in the third quarter, as the performance of priority brands and new launches more than compensated for the erosion caused by generics, demonstrating the renewal capacity of our business," highlighted Vas Narasimhan, CEO of Novartis.
"Although the results of the study with del-desiran in DM1 were not as expected, the data showed signs of clinical activity, so we are evaluating the development strategy for this drug. It is worth noting that our programs for facioscapulohumeral muscular dystrophy (FSHD) and Duchenne muscular dystrophy (DMD) continue to progress favorably," he added.