Press Release: Novartis continues strong momentum -3-

Novartis

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Results from ongoing trials and other highlights

Kisqali Results from a four-year post-hoc analysis of the

(ribociclib) pivotal Phase III NATALEE trial showed the addition

of Kisqali to endocrine therapy (ET) in patients with

stage II and III HR+/HER2- eBC reduced the risk of

recurrence by 28.5% compared to ET alone. This invasive

disease-free survival benefit was consistent across

all pre-specified patient subgroups, including those

with node-negative disease. Results were also consistent

across secondary efficacy endpoints, with a trend

for improvement in overall survival. Safety and tolerability

remained consistent with previously reported results.

Data presented at ESMO Congress 2024.

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Leqvio In the Phase III V-MONO study, Leqvio demonstrated

(inclisiran) clinically meaningful and statistically significant

low-density lipoprotein cholesterol (LDL-C) lowering

versus both placebo and ezetimibe in patients who

were at low or moderate risk of developing atherosclerotic

cardiovascular disease (ASCVD) and not receiving lipid-lowering

therapy. Novartis plans to present results from this

trial at an upcoming medical meeting and share with

regulatory agencies including FDA.

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Kesimpta Data from the ALITHIOS open-label extension study

(ofatumumab) showed first-line Kesimpta treatment for up to six

years led to less disability and disease progression

in recently diagnosed (<=3 years) and treatment-naïve

people with relapsing multiple sclerosis (RMS), compared

to those who switched from teriflunomide.

In the separate US-based single-arm OLIKOS Phase IIIb

study, all clinically stable RMS patients who switched

from intravenous anti-CD20 therapy to Kesimpta showed

no new gadolinium-enhancing (Gd+) T1 lesions at 12

months. Data from both studies were presented at the

ECTRIMS 2024 Annual Meeting.

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Pelabresib Based on Novartis review of 48-week data from the

Phase III MANIFEST-2 study, longer follow-up time

is needed to determine, in consultation with Health

Authorities, the regulatory path for pelabresib in

myelofibrosis. We will continue to follow patients

in MANIFEST-2 and evaluate the potential for additional

studies to support registration. The 48-week data

will be presented at an upcoming medical meeting.

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XXB750 Novartis will not advance further development of XXB750

in resistant hypertension and heart failure, following

current scientific assessment and review of available

data from early investigational studies.

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BD&L Novartis, in collaboration with Versant Ventures,

established Borealis Biosciences, an independent,

discovery-stage biotechnology company focused on developing

next-generation RNA-based medicines for kidney diseases.

Under the agreement, Novartis has the option to acquire

two future development-ready programs to augment its

renal portfolio, a strategic area of focus for the

company.

Novartis entered into a collaboration agreement with

Generate: Biomedicines to discover and develop protein

therapeutics across multiple disease areas with generative

AI. The collaboration will combine Generate's AI platform

with Novartis expertise and capabilities in target

biology, biologics development, and clinical development

to create novel therapeutics and to accelerate the

pace of drug discovery and development.

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Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority.

During the first nine months of 2024, Novartis repurchased a total of 52.7 million shares for USD 5.7 billion on the SIX Swiss Exchange second trading line. These purchases included 45.4 million shares (USD 4.8 billion) under the up-to USD 15 billion share buyback announced in July 2023 (with up to USD 7.9 billion still to be executed). In addition, 7.3 million shares (USD 0.9 billion) were repurchased to mitigate dilution related to participation plans of associates, with the remainder of repurchases for this purpose to be executed in Q4 2024. Further, 1.1 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 9.1 million shares (for an equity value of USD 0.8 billion) were delivered as a result of share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 44.7 million versus December 31, 2023. These treasury share transactions resulted in an equity decrease of USD 5.0 billion and a net cash outflow of USD 5.5 billion.

As of September 30, 2024, net debt increased to USD 16.3 billion compared to USD 10.2 billion net debt at December 31, 2023. The increase was mainly due to the free cash flow of USD 12.6 billion being more than offset by the USD 7.6 billion annual dividend payment, net cash outflow for M&A / intangible assets transactions of USD 5.5 billion, and cash outflow for treasury share transactions of USD 5.5 billion.

As of Q3 2024, the long-term credit rating for the company is Aa3 with Moody's Ratings and AA- with S&P Global Ratings.

2024 outlook

Barring unforeseen events; growth vs prior year in Previous guidance

cc

-------------------------------------------------------- --------------------

Net sales Expected to grow low double-digit (from high single to

low double-digit)

--------------------- --------------------------------- --------------------

Core operating income Expected to grow high teens (from mid to high

teens)

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Key assumptions:

-- We assume Tasigna, Promacta and Entresto US generic entry mid-2025 for

forecasting purposes

Foreign exchange impact

If late-October exchange rates prevail for the remainder of 2024, the foreign exchange impact for the year would be negative 1 percentage point on net sales and negative 3 to negative 4 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures(1)

Continuing Q3 Q3

operations(2) 2024 2023 % change 9M 2024 9M 2023 % change

USD m USD m USD cc USD m USD m USD cc

------ ------ ---- ---- ------- ------- ---- ----

Net sales 12 823 11 782 9 10 37 164 34 017 9 11

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Operating income 3 627 1 762 106 123 11 014 7 187 53 61

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

As a % of sales 28.3 15.0 29.6 21.1

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Net income 3 185 1 513 111 121 9 119 5 934 54 62

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

EPS (USD) 1.58 0.73 116 127 4.50 2.84 58 67

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Cash flows from

operating activities 6 286 5 304 19 13 426 11 673 15

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Non-IFRS measures

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Free cash flow 5 965 5 043 18 12 618 11 019 15

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Core operating income 5 145 4 405 17 20 14 635 12 551 17 20

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

As a % of sales 40.1 37.4 39.4 36.9

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Core net income 4 133 3 585 15 17 11 822 10 320 15 18

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Core EPS (USD) 2.06 1.74 18 20 5.83 4.95 18 21

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Discontinued Q3 Q3

operations(2) 2024 2023 % change 9M 2024 9M 2023 % change

USD m USD m USD cc USD m USD m USD cc

---------------------- ------ ------ ---- ---- ------- ------- ---- ----

Net sales 2 476 nm nm 7 428 nm nm

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October 29, 2024 02:00 ET (06:00 GMT)