Novartis CEO Vasant Narasimhan announced at the J.P. Morgan Healthcare Conference in San Francisco that the company will continue pursuing bolt‑on acquisitions and keep its capital allocation priorities unchanged.
The strategy focuses on targeted acquisitions in high‑margin innovative medicines, especially neuroscience and gene therapy. Recent deals include Kate Therapeutics for up to $1.1 billion, Chinook Therapeutics for approximately $3.2 billion, and MorphoSys AG for about $2.9 billion, underscoring a preference for smaller, complementary transactions over large standalone deals.
Novartis reported net sales of $48.5 billion in 2025, up 5 % year‑over‑year, with a core operating income margin of 40 % and free cash flow of $7.8 billion. These figures give the company the financial flexibility to pursue bolt‑on deals while maintaining a strong balance sheet.
Narasimhan said the company is in a “luxury position” with free cash flow, allowing flexibility in deal sizes, but strategic and scientific fit remain paramount. He noted that 30 deals were signed last year, mostly early‑stage, highlighting a focus on value creation rather than sheer volume.
The continued focus on bolt‑on acquisitions and unchanged capital allocation priorities signals a disciplined growth strategy that should reinforce Novartis’s high‑margin portfolio and support long‑term shareholder value.
The announcement confirms Novartis’s commitment to incremental growth through bolt‑on acquisitions, positioning the company to capture opportunities in high‑growth therapeutic areas while maintaining a strong balance sheet.
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