Novartis Expands U.S. Manufacturing with $23 Billion Investment, Advances IgAN Portfolio
Novartis commits $23 billion to U.S. manufacturing expansion with new facilities in North Carolina, California, and Florida, while advancing its immunoglobulin A nephropathy drug portfolio with positive Phase III results for Vanrafia.
Novartis is expanding its U.S. manufacturing footprint with new facilities in North Carolina, California, and Florida. The company has committed $23 billion to U.S. expansion, influenced by tariff policies from the previous U.S. administration. Following discussions with the CEO, the company announced new manufacturing and research facilities in North Carolina and California, with plans for a radioligand therapy site in Florida.
The Swiss pharmaceutical giant also agreed to cap U.S. drug prices and provide certain treatments directly to patients. Novartis has a market capitalization of over $300 billion and is one of the world's largest healthcare companies. The company sells its products globally, with the United States constituting close to one-third of total revenue.
Novartis announced on February 13 final results from the Phase III ALIGN study, stating that Vanrafia (atrasentan) showed a positive difference in eGFR change from baseline vs. placebo at Week 136 in the ALIGN study, 4 weeks after study treatment ended, with results favoring Vanrafia across multiple timepoints, measures of kidney function, and in patients additionally receiving SGLT2 inhibitors. Clinically meaningful results were observed compared to placebo in eGFR change from baseline at the end of study treatment at Week 132, and in the prespecified exploratory group of patients additionally receiving sodium-glucose co-transporter-2 inhibitors.
Vanrafia attained accelerated approval in the U.S. and China for the reduction of proteinuria in adults with IgAN in 2025, and Novartis has plans to submit for traditional approval in 2026. ALIGN offers the longest follow-up period in pivotal Phase III studies for IgAN, and safety was consistent with previous findings. In addition to Vanrafia, Novartis is continually advancing its multi-asset IgAN portfolio, including Fabhalta and investigational compound zigakibart.
The company's focus areas are extensive, spanning oncology, immunology, neuroscience, respiratory care, and cardiovascular, renal, and metabolic diseases. Novartis develops and manufactures innovative drugs with key areas of drug development including oncology, immunology, neuroscience, respiratory, and cardiovascular, renal, and metabolic. It also has an established medicines business, which includes off-patent franchises.
Novartis has demonstrated robust financial health with revenue of $56.67 billion with a 3-year growth rate of 7.8%. The company's operating margin is 31.22%, indicating efficient cost management, and net margin is 24.73%, reflecting strong profitability. Return on equity is 32.11%, showcasing effective use of shareholder equity. Balance sheet strength is evident with a debt-to-equity ratio of 0.77 and a current ratio of 1.12, indicating a solid financial position.
Despite issuing $4 billion in new debt over the past three years, Novartis maintains a strong Altman Z-Score of 3.92, suggesting financial stability. The company is currently offering investors a 2.9% dividend yield, far above the 1.1% of the S&P 500 index and the 1.7% average for the pharmaceutical sector. The dividend has been steadily increasing, though not annually, for over 20 years, and the payout ratio is around 45%. Over the past two decades, the payout ratio has never exceeded 100%.
The company has highlighted five drugs that are advancing through the pipeline or are gaining new indications. Right now, older drugs are losing share to generic competition, leading revenue to flatline, but Novartis looks well on its way to offsetting the future revenue losses that come with patent expirations.