Press Release: Novartis delivers double-digit -3-

ribociclib plus endocrine therapy (ET) compared to

ET alone significantly reduced the risk of recurrence

by 25% across a broad population of patients with

stage II and III HR+/HER2- early breast cancer, including

those with no lymph node involvement

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

Zolgensma Final data from Phase IIIb SMART study supports use

of Zolgensma in older and heavier SMA patients (1.5-9.1

years of age and weighing >=8.5kg to <=21kg) than

the children treated in previous clinical studies.

Nearly all treated patients maintained or improved

motor milestones after 52 weeks, with most switching

to the one-time gene therapy from chronically administered

disease-modifying therapy. Data presented at MDA 2024

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

BD&L Announced the planned acquisition of MorphoSys, including

pelabresib (late-stage BET inhibitor for myelofibrosis)

and tulmimetostat (early-stage dual EZH2 and EZH1

inhibitor for solid tumors or lymphomas). The transaction

aligns with Novartis strategic focus on oncology and

strengthens our efforts in developing next-generation

treatment options for cancer. Transaction is expected

to close in Q2 2024

Novartis has exercised its exclusive option to acquire

IFM Due. The acquisition gives Novartis full rights

to IFM Due's portfolio of STING antagonists, strengthening

the company's inflammatory diseases pipeline and building

on our efforts to innovate new treatments for inflammation-driven

conditions.

Novartis entered into a transaction with Arvinas including

an exclusive strategic license agreement for the worldwide

development and commercialization of ARV-766, a second

generation PROTAC(R) androgen receptor (AR) degrader,

complementing our radioligand therapy platform in

prostate cancer.

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

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.

In Q1 2024, Novartis repurchased a total of 10.3 million shares for USD 1.0 billion on the SIX Swiss Exchange second trading line under the up-to USD 15 billion share buyback announced in July 2023 (with up to USD 11.7 billion still to be executed). In addition, 1.0 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 7.7 million shares (for an equity value of USD 0.3 billion) were delivered as a result of share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 3.6 million versus December 31, 2023. These treasury share transactions resulted in an equity decrease of USD 0.9 billion and a cash outflow of USD 1.1 billion.

As of March 31, 2024, net debt increased to USD 15.8 billion compared to USD 10.2 billion net debt at December 31, 2023. The increase was mainly due to the USD 5.2 billion annual net dividend payment in March (which is the gross dividend of USD 7.6 billion reduced by the USD 2.4 billion Swiss withholding tax that was paid in April 2024, according to its due date), cash outflow for treasury share transactions of USD 1.1 billion and net cash outflow for M&A / intangible assets transactions of USD 1.2 billion, partially offset by USD 2.0 billion free cash flow.

As of Q1 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 high single to low double-digit (from mid-single-digit)

Core Expected to grow low double-digit to mid-teens (from high single-digit)

operating

income

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

Key assumptions:

-- Our guidance assumes that no Entresto generics and no Promacta generics

launch in the US in 2024

Foreign exchange impact

If late-April exchange rates prevail for the remainder of 2024, the foreign exchange impact for the year would be negative 2 percentage points on net sales and negative 4 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Novartis proposes Dr. Giovanni Caforio as Chair of the Board of Directors at the AGM in 2025

The 12-year term of Dr. Joerg Reinhardt as Chair of the Board of Directors ends as scheduled in 2025, when he will retire and not be available for re-election at the Annual General Meeting. Dr. Reinhardt joined Sandoz in 1982 and has held managerial positions with increasing responsibility in Sandoz and thereafter Novartis, including Head of the Vaccines and Diagnostics Division and Chief Operating Officer. In 2013, he was appointed Chair of the Board of Directors. During his leadership, Novartis transformed from a diversified healthcare enterprise to a focused medicines company.

The Board of Directors is proposing the nomination of Dr. Giovanni Caforio as Chair of the Board of Directors. Shareholders will vote on Dr. Caforio's nomination to the Board at the next AGM 2025.

Since joining Bristol Myers Squibb in 2000, Dr. Caforio has served in various senior roles at the company. From May 2015 to November 2023, Dr. Caforio was CEO and from May 2017 to March 2024, he served as Executive Chairman. Under his leadership, BMS successfully transformed into a global medicines company with strong capabilities across R&D and commercialization. Dr. Caforio was born and educated in Italy and holds Italian and US citizenship. He is a physician by training and received his M.D. from the University of Rome. Dr. Caforio is fluent in Italian, French, Spanish, Portuguese and English.

Key figures(1)

Continuing operations(2) Q1 2024 Q1 2023 % change

USD m USD m USD cc

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

Net sales 11 829 10 798 10 11

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

Operating income 3 373 2 618 29 39

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

As a % of sales 28.5 24.2

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

Net income 2 688 2 150 25 37

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

EPS (USD) 1.31 1.02 28 41

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

Cash flows from operating activities 2 265 2 852 -21

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

Non-IFRS measures

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

Free cash flow 2 038 2 684 -24

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

Core operating income 4 537 3 906 16 22

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

As a % of sales 38.4 36.2

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

Core net income 3 681 3 233 14 19

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

Core EPS (USD) 1.80 1.54 17 23

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

Discontinued operations(2) Q1 2024 Q1 2023 % change

USD m USD m USD cc

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

Net sales 2 503 nm nm

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

Operating income 238 nm nm

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

As a % of sales 9.5

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

Net income 144 nm nm

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

Non-IFRS measures

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

Core operating income 507 nm nm

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

As a % of sales 20.3

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

Total Company Q1 2024 Q1 2023 % change

USD m USD m USD cc

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

Net income 2 688 2 294 nm nm

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

EPS (USD) 1.31 1.09 nm nm

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

Cash flows from

operating activities 2 265 2 957 nm nm

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

Non-IFRS measures

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

(MORE TO FOLLOW) Dow Jones Newswires

April 23, 2024 01:00 ET (05:00 GMT)