New Data for FTY720 -- Aiming to Become the First Orally Effective Multiple Sclerosis Treatment -- Show Sustained Benefits Over Two Years

EAST HANOVER, N.J., Sept. 28 /PRNewswire-FirstCall/ -- The developmental oral therapy FTY720 (fingolimod) has demonstrated sustained benefits over two years in patients suffering from various relapsing forms of multiple sclerosis, indicating that it could provide an important new option for treating this disabling neurological disease estimated to affect more than 2.5 million people worldwide and 400,000 people in the U.S.

New Phase II data presented today show that up to 77% of patients taking once-daily oral FTY720 remained free of relapses over two years. They also maintained a low rate of inflammatory disease as measured by magnetic resonance imaging (MRI).

The results were presented at the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) meeting in Madrid, Spain. They provide longer term data regarding the clinical profile of FTY720, following the publication of one-year Phase II data in the New England Journal of Medicine on September 14, 2006.

New preclinical data also presented at the congress suggest that FTY720 may work through multiple modes of action. In addition to its anti-inflammatory effects, preclinical data suggest that FTY720 may have the potential to reduce neurodegeneration and enhance repair of the central nervous system (CNS) affected by MS.

MS is a progressive and debilitating disorder of the CNS, that frequently affects young people, women twice as often as men. It is one of the most common inflammatory and neurodegenerative disorders of the central nervous system, causing problems with muscle control and strength, vision, balance, sensation and mental functions. MS typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses") followed by complete or partial restoration of functions.

"The results presented at ECTRIMS are very promising, and if confirmed by Phase III data, FTY720 could contribute significantly to improving the quality of life of patients with relapsing MS," said Professor Ludwig Kappos, chief

trial investigator and head of the Outpatient Clinic Neurology-Neurosurgery at the University Hospital in Basel, Switzerland. "The data show that FTY720 may offer important clinical benefits. In addition, it is given conveniently in the form of a once-daily pill."

FTY720 a new approach to treating MS

FTY720, the first oral sphingosine 1-phosphate receptor (S1P-R) modulator, may represent a new approach to the treatment of MS through its unique mode of action.

In MS, inflammatory lymphocytes (T-cells) are believed to be responsible for the destruction of the protective myelin coating, which surrounds the nerves in key areas of the brain and spinal cord. This destruction hinders the ability of nerves to send electrical signals, resulting in problems with muscle movement, coordination, balance and cognition.

FTY720 binds to the sphingosine 1-phosphate receptor-1 (S1P1) on circulating lymphocytes and reversibly traps a proportion of them in the lymph nodes. As a result, FTY720 lowers the number of activated T-cells circulating in the bloodstream and central nervous system. Preclinical data suggest that FTY720 may also impact the neurodegenerative component of MS and promote endogenous repair.

FTY720 has been developed by Novartis and licensed from Mitsubishi Pharma Corporation.

Phase III clinical trials program underway

The positive Phase II results support further evaluation of FTY720 through a large-scale program of Phase III studies in relapsing-remitting MS, which started earlier this year.

This includes a Phase III clinical trials program called FREEDOMS (FTY720 Research Evaluating Effects of Daily Oral therapy in Multiple Sclerosis). The 24-month, randomized, double-blind, placebo-controlled study program plans to include over 2,000 patients worldwide with the relapsing-remitting form of multiple sclerosis between the ages of 18 and 55. Study participants will be randomized equally to receive once-daily oral treatment with FTY720 1.25 mg or 0.5 mg or placebo.

For more information about the study, including eligibility criteria and location of U.S. study sites, patients can call the following toll-free number: 866-788-3930, or visit http://www.clinicaltrials.gov/.

Details of new Phase II data

The data presented at ECTRIMS are from an 18-month active drug extension of a core six-month placebo-controlled study in patients with various forms of relapsing multiple sclerosis. The results show that at six months, FTY720 reduced inflammatory disease activity as seen on MRI by up to 80% and relapse rates by more than 50%, compared to placebo. In the extension phase, placebo patients were switched to active therapy.

Over two years of continuous FTY720 treatment, MRI and clinical disease activity remained low, resulting in an annualized relapse rate of 0.2 with up to 77% of patients remaining relapse free. More than 80% of patients were free from lesions showing active inflammation on MRI. Patients who received placebo for the first six months also experienced a marked improvement after switching to FTY720, and the improvement was sustained through month 24.

The large-scale study was conducted at 32 centers in 11 countries (in Europe and Canada). In the initial placebo-controlled phase, 281 patients were randomized equally to receive FTY720 (1.25 mg or 5 mg) or placebo once-daily for six months. Of the 255 patients who completed this part of the study, 98% volunteered to continue in the extension phase. Patients in the placebo group were then re-randomized to receive either 1.25 mg or 5 mg of FTY720 in a

dose-blinded manner. Those already on FTY720 continued with their original treatment.

In the six-month placebo-controlled phase of the study, the most frequent adverse events reported for FTY720 were dose-dependent upper respiratory tract infections (mainly nasopharyngitis) and dyspnea, plus diarrhea and nausea. FTY720 treatment was associated with initial dose-dependent decreases in heart rate and expiratory air flow. Clinically asymptomatic increases in alanine aminotransferase (liver enzyme) and an increase in blood pressure were also observed. No unexpected adverse events emerged in patients treated for up to 24 months compared with the six-month placebo-controlled phase. There was no further elevation of blood pressure with continued treatment beyond the effect seen at six months. The ongoing Phase III study program includes comprehensive monitoring, which will provide further characterization of the safety profile of FTY720.

Disclaimer

This release contains certain forward-looking statements relating to Novartis' business, which can be identified by the use of forward-looking terminology such as "aiming to become the first orally effective multiple sclerosis treatment," "could provide," "suggest," "may work," "may have the potential," "could change," "may offer," "plans to include," "may represent," "are believed to be," "may also impact" or similar expressions, or by express or implied statements regarding whether or not fingolimod will ever be approved by health authorities for marketing, whether or not fingolimod will be the first orally effective MS treatment, the potential long-term impact of a patient's use of fingolimod, the potential commencement of Phase III studies of fingolimod in the US, the potential regulatory approval of fingolimod in any jurisdiction, or potential future revenue from fingolimod. Such forward-looking statements reflect the current views of Novartis regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with fingolimod to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Phase III studies of fingolimod will be permitted to commence in the US, or that fingolimod will be approved for any indications or labeling in any market. Nor can there be any guarantee of potential future sales of fingolimod. Neither can there be any guarantee regarding the long-term impact of a patient's use of fingolimod. In particular, management's expectations regarding fingolimod could be affected by, among other things, unexpected clinical trial results, including new clinical trial results and additional analysis of existing results; unexpected regulatory actions or delays or government regulation generally; Novartis' ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry and general public pricing pressures, and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

About Novartis

Novartis Pharmaceuticals Corporation develops, manufactures, markets and sells leading innovative prescription drugs used to treat a number of diseases and conditions, including those in the cardiovascular, metabolic, cancer,

organ transplantation, central nervous system, dermatological, gastrointestinal and respiratory areas. The company's mission is to improve people's lives by pioneering novel healthcare solutions.

Novartis has been a leader in the neuroscience area for more than 50 years, having pioneered early breakthrough treatments for Alzheimer's disease, Parkinson's disease, Attention Deficit Hyperactivity Disorder, epilepsy, schizophrenia and migraine, many of which continue to be regarded as "gold standards" to this day. Novartis Neuroscience continues to be at the forefront of research and development of new compounds, is committed to addressing unmet medical needs and to supporting patients and families affected by these disorders.

Located in East Hanover, New Jersey, Novartis Pharmaceuticals Corporation is an affiliate of Novartis AG -- a world leader in offering medicines to protect health, treat disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis is the only company with leadership positions in both patented and generic pharmaceuticals. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics and leading self-medication OTC brands. In 2005, the Group's businesses achieved net sales of USD 32.2 billion and net income of USD 6.1 billion. Approximately USD 4.8 billion was invested in R&D. Novartis Group companies employ approximately 91,000 people and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com/.

Media contacts: Denise Brashear Novartis Pharmaceuticals Corporation +1 862 778 7336 (direct) +1 917 453 2665 (mobile) denise.brashear@novartis.com Emily Baier Feinstein Kean Healthcare +1 617 761 6708 (direct) +1 646 321 1630 (mobile) emily.baier@fkhealth.com