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Drugs Kisqali, Kesimpta drive growth

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CEO announces $10 billion share buyback

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CFO Kirsch to retire in March 2026

(Rewrites to add tariff focus, quotes after press call)

By Miranda Murray and Patricia Weiss

BERLIN, July 17 (Reuters) - Swiss drugmaker Novartis

nudged up its full-year earnings forecast on Thursday,

citing strong second-quarter sales of key drugs such as Kisqali,

and said potential new U.S. tariffs would not affect its 2025

guidance.

The company is facing the possibility of steep U.S. tariffs

on drugs, though CEO Vas Narasimhan has said that Novartis can

manage their effects.

"We have adequate inventory in the U.S. for this year, and

we feel fully confident that for this year, any new tariffs

would not impact our guidance," he told journalists after the

results.

Novartis now expects full-year core operating income to

increase by a low-teens percentage, compared with the low

double-digits cited previously.

"Medium term, we're putting in place the various elements of

a plan to ensure that we can mitigate any impact," said

Narasimhan, most importantly a commitment to spend $23 billion

to build and expand facilities in the United States.

"Given enough time, we should be able to get there and avoid

significant impacts from tariffs," he added.

In the long term, Novartis wants to restructure its

production for the U.S. market, with a push for key products to

also be produced there, reversing a previous policy to expand

capacity in Europe and other regions to serve the United States.

Shares fell as much as 2.8% before recovering slightly to

trade down 0.7% at 1140 GMT.

Jefferies analysts attributed the share decline to weaker

than expected sales due to a miss by psoriasis drug Cosentyx,

while JP Morgan noted that finance chief Harry Kirsch's

retirement announcement may have tempered investor enthusiasm.

Kirsch will retire in March 2026 and be replaced by Mukul

Mehta, who currently heads the business planning and analysis,

digital finance and tax division.

Novartis also announced a new share buyback programme worth

up to $10 billion, set to run until the end of 2027.

Second-quarter operating income, adjusted for special items,

was up 20%, at $5.9 billion, slightly above analyst forecasts,

while sales climbed 12% to $14 billion.

The company's promising Kisqali drug saw revenue jump 64% to

$1.2 billion, while sales of its blockbuster heart medication

Entresto rose 24% to $2.36 billion - though analysts expect

headwinds from the market entry of a cheaper generic drug from

the second half.

The decline is likely to be modest at first but could

accelerate significantly three to six months after the patent

expires, according to the CFO.

Novartis suffered a legal setback this week in its attempt

to block MSN Pharmaceuticals from launching a generic version of

Entresto, after a U.S. court denied a request for a preliminary

injunction.