Novartis CEO says pharma giant has the firepower for big M&A deals: 'Can never be done'

Novartis "can ne'er beryllium done" erstwhile it comes to large acquisitions successful its assemblage arsenic it ever needs to look for the adjacent "great asset," CEO Vas Narasimhan told CNBC.

In bid to offset the deed from generics contention Novartis has been connected a buying spree, acquiring much than 35 companies implicit the past year. The Swiss drugmaker announced its biggest woody successful a decennary connected Sunday, erstwhile it announced it has agreed to bargain U.S. biotechnology institution Avidity Biosciences for astir $12 billion. 

The acquisition volition springiness the Basel, Switzerland-based pharma elephantine entree to Avidity's immense pipeline of promising experimental drugs. Novartis said 2 of Avidity's 3 starring drugs that are expected to beryllium launched earlier 2030 person the imaginable to make billions of dollars successful sales.

"We are driven by subject and the technology, successful this lawsuit this was a cleanable acceptable for america … If you instrumentality a look astatine our escaped currency travel it approaching $20 cardinal a year, truthful we person capable firepower to bash deals similar this and to bolster the maturation illustration of the company," Narasimhan told CNBC's "Europe Early Edition." 

Novartis delivered a 7% summation successful third-quarter nett income to $13.9 cardinal arsenic it continues to grapple with contention for immoderate of its blockbuster drugs. Operating income jumped 27% to $5.46 cardinal successful the period, somewhat supra expert expectations.

Novartis shares fell 3.4% astatine the commencement of the Tuesday trading session. The banal has risen immoderate 17% since the commencement of the year, outperforming an 8% emergence connected the Swiss Market Index.

The institution said its show successful the 4th was driven by maturation successful income of drugs including crab treatments Kisqali, Pluvicto and Scemblix, arsenic good arsenic its aggregate sclerosis cause Kesimpta, which each saw precocious treble digit gross growth.

Novartis has raised guidance for the past 10 quarters, including doubly this year. Analysts astatine UBS had expected the drugmaker to up its forecasts again this quarter. However, the drugmaker stuck to its guidance for income to turn by a "high azygous digit" percent and adjusted operating income to turn by a "low teens" percentage.

Its cardinal drugs Entresto, Promacta, and Tasigna are facing nonaccomplishment of exclusivity successful the U.S., which resulted successful a antagonistic interaction of 7 percent points. Revenue deduction adjustments, chiefly successful the U.S. led to a antagonistic interaction of 2 percent points owed to pricing, the steadfast said successful a Tuesday net statement.

Investors are intimately watching planetary updates connected tariffs and U.S. President Donald Trump's efforts to little cause prices for U.S. consumers.

Pharma giants Pfizer and AstraZeneca person precocious struck "most favoured nation" (MFN) agreements with the U.S. administration. The argumentation aims to slash cause costs by tying the prices of immoderate medicine successful the U.S. to the importantly little ones abroad. For the Pfizer and AstraZeneca deals, it volition little the outgo of drugs for U.S. consumers portion providing the companies a three-year reprieve from tariffs.

"Following PFE and AZN MFN agreements, we expect much announcements crossed EU and US pharma successful the coming weeks. Broad capitalist anticipation is to spot a akin statement for Novartis. We look to spot Novartis's views connected the expected interaction of immoderate statement connected 2026+ earnings," said analysts astatine UBS.

In September, Novartis pledged it would destruct the terms differential betwixt drugs successful the U.S. and different industrialized nations.

In September Novartis besides said it would not beryllium impacted by a 100% tariff announced by the White House connected branded pharmaceutical products due to the fact that of its $23 cardinal concern successful U.S. based infrastructure.