Novartis stock trades steady as Cosentyx growth and eye-care spin-off shape outlook

Novartis stock reflects a focused pharmaceuticals strategy after the Alcon spin-off, with recent results showing higher innovative medicines revenue and growing Cosentyx sales while investors weigh the pipeline and capital returns.

Novartis stock has been shaped in recent years by the Swiss group’s decision to focus on innovative medicines after separating its eye-care business and by steady growth in key immunology and oncology drugs. Against that backdrop, investors now closely track revenue trends in its core Innovative Medicines segment and the contribution from flagship products such as Cosentyx and Entresto, as well as the financial impact of past portfolio moves including the Alcon spin-off completed in 2019.

Innovative Medicines revenue above USD 30 billion

In its reporting for fiscal 2023, Novartis highlighted that its Innovative Medicines operations generated revenue of roughly USD 33 billion, underlining the central role of this segment in the streamlined group. Management has emphasized that this unit accounts for the vast majority of group sales and profit after a series of portfolio reshapings over the past decade. For investors, that reported figure provides a reference point for evaluating how successfully the company is extracting growth from its late-stage portfolio and recent launches.

Within that revenue base, the company has identified several growth drivers. In 2023, sales of key cardiovascular and immunology therapies such as Entresto and Cosentyx increased compared with the prior year, helping to offset declines in older, off-patent medicines. The company’s disclosures indicated that Entresto revenue rose year on year in 2023, as more physicians prescribed the treatment for heart failure across major markets. Cosentyx, used in conditions including psoriasis and ankylosing spondylitis, also expanded its contribution versus 2022, supported by volume growth in both the United States and Europe.

Cosentyx revenue up versus 2022

Novartis has described Cosentyx as one of its most important growth assets, and recent figures reflect that status. In 2023, Cosentyx sales increased compared with 2022, with management citing double-digit growth in several indications and geographic regions. That performance has been framed by the company as evidence that its strategy of investing in immunology is paying off, while also helping to offset generic competition elsewhere in the portfolio.

The higher contribution from Cosentyx complements the continued expansion of Entresto, which has steadily grown from a niche product into a multi-billion-dollar franchise. In its 2023 reporting, the group noted that Entresto sales rose compared with the previous year as treatment guidelines and prescribing habits evolved in favor of the drug. Together, the growth of these two products supports the company’s broader aim of maintaining a mid-single-digit group revenue growth profile over the medium term, even as some legacy drugs lose exclusivity.

Alcon spin-off reshapes revenue base

Novartis’ profile changed materially when it separated its eye-care business into Alcon in 2019. Before the transaction, the eye-care unit contributed several billion dollars in annual revenue and gave the group a significant presence in surgical and vision-care devices. The spin-off reduced reported group sales but simplified the business model and allowed the market to value the higher-margin innovative medicines activities separately from the more equipment- and consumables-oriented eye-care operations.

From a financial perspective, management has argued that the spin-off sharpened capital allocation. By focusing its balance sheet on pharmaceuticals and gene therapies, Novartis indicated that it could direct more resources into late-stage pipeline assets, targeted acquisitions, and share repurchases. In subsequent years, the company has continued to provide guidance emphasizing its expectations for mid-single-digit sales growth and higher-margin progression now that the portfolio is more concentrated on patented drugs and advanced therapies.

Key product Cosentyx underpins segment growth

Cosentyx sits at the heart of Novartis’ strategy in immunology. In the company’s 2023 figures, Cosentyx generated multi-billion-dollar revenue and expanded its sales compared with 2022, benefiting from broader adoption in diseases such as plaque psoriasis and psoriatic arthritis. The company has highlighted this performance as an illustration of how targeted biologics can sustain growth even as competition from biosimilars and other advanced therapies intensifies.

Regulatory developments have also played a role. Over the past several years, Novartis has secured label expansions for Cosentyx in new indications and age groups, which has widened the addressable patient population. These label changes, together with increased reimbursement coverage in key markets, have supported higher volumes and reinforced the drug’s position as a cornerstone of the company’s immunology franchise.

Representative product Cosentyx

Cosentyx, a monoclonal antibody targeting interleukin-17A, is one of Novartis’ most commercially important medicines. The drug is approved in major markets for conditions including plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondyloarthritis. In 2023, Cosentyx delivered multi-billion-dollar revenue and increased its sales compared with 2022, driven mainly by higher treatment volumes and continued geographic expansion.

The product’s performance is closely watched because it illustrates the company’s ability to sustain long-term franchises in competitive therapeutic areas. By investing in clinical trials to secure additional indications and in lifecycle management initiatives, Novartis is seeking to extend the period over which Cosentyx can contribute meaningfully to Innovative Medicines revenue. For shareholders, the drug’s trajectory is one of the main reference points for assessing how effectively the group is executing on its strategy of focusing on high-value specialty medicines.

Novartis stock and market positioning

Novartis shares are listed on SIX Swiss Exchange under the ISIN CH0012005267 and also trade as American depositary receipts in the United States. The stock reflects the company’s position as one of the largest global pharmaceuticals groups by market capitalization, with a portfolio spanning cardiovascular, oncology, immunology, neuroscience, and gene therapies. In recent years, the strategic shift toward a pure-play innovative medicines profile, backed by mid-single-digit revenue growth and a focus on higher-margin therapies, has been a central element of the equity story.

For investors, Novartis stock represents exposure to a diversified late-stage pipeline and established blockbuster drugs like Cosentyx and Entresto, balanced against the usual industry risks of patent expiries and regulatory uncertainty. The company’s decision to streamline its portfolio through transactions such as the Alcon spin-off and to return capital via dividends and share buybacks has been part of its effort to offer a predictable value proposition relative to other large pharmaceutical peers.

Novartis key data

• Company: Novartis AG
• ISIN: CH0012005267
• Ticker: SIX: NOVN
• Trading venue: SIX Swiss Exchange
• Sector / Industry: Health Care / Pharmaceuticals
• Index membership: SMI