Novartis AG
CorpDigest
Novartis AG
Company History
Founded 1996 in Basel, Switzerland
Last reviewed: 2026-06-08 · By Swet Parvadiya
Novartis AG generated $54.5 billion in FY2025 net sales, operating as a pure-play innovative medicines powerhouse that commands a 42.2% core operating income margin by focusing exclusively on high-margin patented therapeutics. The company's strategic identity was defined in October 2023 when it completed the spin-off of its Sandoz generics division, deliberately severing a $10 billion business to concentrate all capital on oncology, immunology, and rare diseases. This pivot has resulted in a highly concentrated portfolio where growth is driven by next-generation assets like the radioligand therapy Pluvicto ($2.0 billion in FY2025 sales) and the CDK4/6 inhibitor Kisqali ($4.7 billion), which are rapidly scaling to offset the decline of legacy blockbusters like Entresto following US generic entry. With 75,267 employees and a market capitalization of $274 billion, Novartis allocates $10.8 billion annually to R&D, funding a pipeline of over 200 clinical projects and enabling aggressive acquisitions like the $2.9 billion purchase of MorphoSys. The company's future depends on its ability to execute a 5-6% constant currency sales CAGR through 2030, a target that requires the successful launch of eight late-stage pipeline assets and the continued expansion of its dominant position in radioligand therapy.
Daniel Vasella is an Italian-Swiss physician and business executive who served as the first CEO of Novartis from 1996 to 2002 and later as Chairman from 2002 to 2012. He played a pivotal role in the 1996 merger of Ciba-Geigy and Sandoz, navigating the cultural clashes and operational redundancies of the two百年old Swiss companies. Vasella's background as a medical doctor gave him a unique perspective on the pharmaceutical industry, driving his focus on innovative drug development and patient-centric research. During his tenure, he oversaw the acquisition of several major biotechnology companies, including the $5.1 billion purchase of Chiron Corporation in 2006, which significantly expanded Novartis's vaccine and oncology capabilities. Vasella was also known for his controversial decision to accept a $78 million severance package in 2013, which sparked public outrage and led to the Swiss 'Minder Initiative' against excessive executive compensation. Despite the controversy, Vasella is widely credited with transforming Novartis from a diversified chemical company into a focused, research-driven pharmaceutical powerhouse.
Markus U. Diethelm is a Swiss business executive who served as the CEO of Sandoz from 1991 to 1996 and as the first Chairman of the Board of Novartis from 1996 to 1999. He was the primary architect of the 1996 merger between Sandoz and Ciba-Geigy, a transaction that created Novartis and reshaped the global pharmaceutical industry. Diethelm's career at Sandoz spanned over three decades, during which he held various leadership positions in finance and operations. His leadership style was characterized by a focus on financial discipline and strategic long-term planning, qualities that were essential in navigating the complex integration of the two companies. After stepping down as Chairman of Novartis in 1999, Diethelm remained active in the business community, serving on the boards of several major Swiss corporations. He is widely respected in Switzerland for his role in creating a global pharmaceutical leader and for his commitment to maintaining the company's headquarters in Basel.
Alexander Clavel and Alfred Kern founded a chemical dye works in Basel, Switzerland, to produce fuchsine, marking the earliest origin of the Ciba-Geigy half of the Novartis merger.
Edouard Naville founded Sandoz in Basel to manufacture tartaric acid, establishing the second half of the corporate lineage that would eventually merge to form Novartis.
The $30 billion merger of Ciba-Geigy and Sandoz was completed, creating Novartis AG as one of the world's largest pharmaceutical and chemical conglomerates.
Novartis acquired the US biotechnology company Chiron Corporation for $5.1 billion, significantly expanding its vaccine and oncology franchises.
Novartis completed the acquisition of the remaining stake in Alcon, the world's largest eye care company, for approximately $28 billion, creating a dominant position in ophthalmology.
Novartis agreed to pay $390 million to settle US Department of Justice allegations regarding off-label marketing and kickbacks, a significant legal and financial milestone.
Vas Narasimhan became CEO at age 41, one of the youngest leaders of a major pharmaceutical company, initiating a strategic review that would eventually lead to the Sandoz spin-off.
Novartis acquired Chinook Therapeutics for $3.2 billion upfront plus $300 million in milestones, securing late-stage assets for rare kidney diseases.
On October 4, 2023, Novartis completed the 100% spin-off of its Sandoz generics division, transforming into a pure-play innovative medicines company.
Novartis acquired the German biotechnology company MorphoSys for $2.9 billion ($2.9 billion), strengthening its oncology pipeline with the anti-myelofibrosis drug pelabresib.
Novartis reported $54.5 billion in net sales for FY2025, with operating income reaching $17.644 billion and free cash flow at $17.596 billion, demonstrating strong performance post-Sandoz spin-off.
Entresto faced US generic entry in Q3 2025, resulting in a 43% quarterly sales decline in Q4 and marking the beginning of the end for the company's largest cardiovascular franchise.
Novartis acquired MorphoSys for $2.9 billion to strengthen its oncology pipeline, specifically acquiring the anti-myelofibrosis drug pelabresib and the CD38 antibody MOR202.
Novartis acquired Chinook for $3.5 billion ($3.2B upfront + $300M milestones) to secure late-stage assets for rare kidney diseases, including atrasentan for IgA nephropathy.
Novartis acquired The Medicines Company for $9.7 billion primarily to gain control of the cholesterol-lowering drug inclisiran, a small interfering RNA (siRNA) therapy.
Novartis acquired Advanced Accelerator Applications for $3.9 billion to establish a foothold in the emerging field of radioligand therapy for cancer.
Novartis acquired the remaining stake in Chiron Corporation for $5.1 billion to gain full control of its vaccine and oncology businesses.