Increase in Novartis's first-half net earnings by 29%
In a significant shift for the pharmaceutical giant, Novartis has announced that Mukul Mehta will take over as the new chief financial officer (CFO) next year, following the retirement of current CFO Harry Kirsch after 22 years with the company.
Mehta, who currently holds the position of head of business planning and analysis in digital finance and tax, will assume his new role in March 2022. His appointment comes at a crucial time for Novartis, as the company prepares to face a patent cliff event with the expected entry of generic versions of its flagship drug, Entresto, into the market in the second half of 2025.
The impact of generic competition on Entresto sales is substantial, with projections showing a dramatic drop from approximately $3 billion annually to around $900 million by 2026. This decline is due to generics undercutting prices by 70–90%, according to recent reports. Novartis anticipates this competition starting mid-2025, although the precise timing depends on ongoing intellectual-property and regulatory litigation.
Despite this looming challenge, Novartis is optimistic about its sales prospects outside the U.S., where patent protections last longer. For instance, the company expects to maintain revenue streams in Europe, where patent protection for Entresto lasts until November 2026, and in Japan, where protection continues until around 2030.
Meanwhile, Harry Kirsch, who has been at the helm of Novartis' financial affairs since 2013, is stepping down due to retirement. During his tenure, Kirsch played a crucial role in the company's growth, overseeing its net sales which amounted to nearly $27.3 billion in the first half of 2025, representing a 12% increase. Sales of Entresto for chronic heart failure also reached $4.6 billion in the same period, an increase of 22%.
Notably, the Basel-based firm's performance has been strong across its portfolio. Novartis CEO Vas Narasimhan highlighted the strong performance of Kisqali, a treatment for breast cancer, and Pluvicto, a treatment for prostate cancer. However, the impact of generic competition was evident in the first half of 2025, with the firm's sales reduced by two percent due to this factor.
As Novartis navigates this patent cliff event, it is pursuing strategies to mitigate the impact and maintain innovation-led growth. The company's focus remains on delivering for patients and shareholders, with Mehta's appointment as CFO set to contribute to this goal.
In a related development, Murdo Gordon will succeed Kirsch as Novartis' CFO, although the specific timing of this transition is yet to be confirmed. Gordon's appointment is part of recent company updates and he is expected to step into the CFO role following Kirsch's tenure.
This situation marks a significant milestone for Novartis, with potential near-term volatility but the company is well-positioned to navigate these challenges and continue its growth trajectory.
- Mukul Mehta, currently the head of business planning and analysis in digital finance and tax, will be taking on the role of chief financial officer (CFO) at Novartis in March 2022.
- Novartis is anticipating a patent cliff event with the entry of generic versions of Entresto into the market in the second half of 2025, which is projected to significantly impact sales.
- According to projections, Entresto sales may drop from approximately $3 billion annually to around $900 million by 2026 due to competition from generics.
- Despite the looming challenge of Entresto's generic competition, Novartis remains optimistic about its sales prospects outside the U.S., where patent protections last longer in places like Europe and Japan.
