Press Release: Novartis continues to grow with -3-

Xolair 323 -13 -3 1 365 -4 6

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Sandostatin 305 -12 -8 1 238 -12 -10

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Kisqali 357 25 33 1 231 31 38

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Ilaris 301 6 14 1 133 7 15

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Kesimpta 369 151 157 1 092 194 200

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Galvus Group 209 -25 -16 859 -21 -12

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Gleevec/Glivec 175 -25 -18 745 -27 -22

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Exforge Group 159 -19 -12 743 -18 -12

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Diovan Group 142 -25 -16 652 -16 -9

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Kymriah 139 -3 5 536 -9 -2

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Afinitor/Votubia 106 -39 -32 512 -45 -41

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Top 20 products total 7 877 -4 2 32 137 -1 5

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* Sales growth with/without true-up: US Cosentyx sales growth was impacted by a revenue deduction true-up (mainly due to higher than expected Medicaid patient mix), which was related to prior quarters in 2022

R&D update - key developments from the fourth quarter

New approvals

Pluvicto EC approval for treatment of patients with progressive

PSMA-positive metastatic castration-resistant prostate

cancer (mCRPC) who have been treated with androgen-receptor

pathway inhibition and taxane-based chemotherapy

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Results from ongoing trials and other highlights

Pluvicto Ph3 PSMAfore trial met its primary endpoint, demonstrating

statistically significant and clinically meaningful

improvement in radiographic PFS in patients with PSMA-positive

mCRPC who have been treated with androgen-receptor

pathway inhibition. No unexpected safety findings

were observed. Detailed data to be presented at an

upcoming medical meeting with submission to regulatory

authorities for approval planned for 2023

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Iptacopan Ph3 APPLY-PNH study met both primary and most secondary

endpoints demonstrating iptacopan's superiority over

anti-C5 treatment in adult PNH patients with residual

anemia despite prior anti-C5 treatment. Iptacopan

demonstrated an 80% difference to anti-C5 in the estimated

proportion of patients achieving >=2 g/dL Hb-level

increases from baseline and a 67% difference to anti-C5

in the estimated proportion of patients achieving

>=12 g/dL Hb levels without the need for red blood

cell transfusions. Iptacopan also provided blood-transfusion

independence for almost all patients with no serious

cases of breakthrough hemolysis and clinically meaningful

patient-reported fatigue improvements. Data presented

at ASH 2022

Ph3 APPOINT-PNH study (evaluating iptacopan in complement-inhibitor-naïve

PNH patients) met its primary endpoint. With iptacopan,

a significant proportion of patients achieved clinically

meaningful Hb-level increases of >=2 g/dL from baseline

without the need for blood transfusions at 24 weeks.

Detailed data to be presented at an upcoming medical

meeting and included in iptacopan PNH global regulatory

submissions planned in 2023

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Kisqali Ph2 RIGHT Choice trial demonstrated approximately

one year PFS benefit of Kisqali plus ET over combination

chemotherapy (24 months compared to 12.3 months; HR=0.54;

p=.0007) in the 1L setting for pre- and perimenopausal

patients with aggressive forms of HR+/HER2- mBC, including

patients with visceral crisis. RIGHT Choice is the

first randomized study comparing a CDK4/6i plus ET

vs. combination CT in aggressive HR+/HER2- mBC. Data

presented at SABCS 2022

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Leqvio New long-term data from the ORION-3 open-label study

demonstrated effective and sustained reductions in

LDL cholesterol over four years of treatment. At any

time throughout the trial, approximately 80% of patients

reached an LDL-C level of <70mg/dL. Data presented

at AHA 2022

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Ganaplacide/ Novartis and Medicines for Malaria Venture announced

lumefantrine-SDF that ganaplacide/ lumefantrine would advance to a

combination Ph3 study in patients with acute uncomplicated malaria

due to Plasmodium falciparum

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Branaplam Novartis ended the development of branaplam in Huntington's

Disease based on an overall assessment of potential

benefit-risk from the Ph2b VIBRANT-HD study

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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.

In 2022, Novartis repurchased a total of 126.2 million shares for USD 10.8 billion on the SIX Swiss Exchange second trading line, including 115.3 million shares (USD 9.9 billion) under the up-to USD 15 billion share buyback announced in December 2021 and 10.9 million shares (USD 0.9 billion) to mitigate dilution related to participation plans of associates. In addition, 1.4 million shares (USD 0.1 billion) were repurchased from associates. In the same period, 12.3 million shares (for an equity value of USD 0.9 billion) were delivered as a result of option exercises and share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 115.3 million versus December 31, 2021. These treasury share transactions resulted in a decrease in equity of USD 10.0 billion and a net cash outflow of USD 10.6 billion.

As of December 31, 2022, the net debt increased to USD 7.2 billion compared to USD 0.9 billion at December 31, 2021. The increase was mainly due to the USD 7.5 billion annual dividend payment and the net cash outflow for treasury share transactions of USD 10.6 billion, partially offset by USD 11.9 billion free cash flow during 2022.

As of Q4 2022, the long-term credit rating for the company is A1 with Moody's Investors Service and AA- with S&P Global Ratings.

2023 outlook

Barring unforeseen events; growth vs prior year in cc

Innovative Medicines Sales expected to grow low-to-mid single digit

Core OpInc expected to grow mid-to-high single digit

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Novartis ex. Sandoz Sales expected to grow low-to-mid single digit

(IM + Corporate) Core OpInc expected to grow mid-to-high single digit

Novartis incl. Sandoz Sales expected to grow low-to-mid single digit

(IM + Sandoz + Corporate)* Core OpInc expected to grow mid single digit

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* Novartis Group guidance, assuming Sandoz would remain within the Group for the entire FY 2023

Barring unforeseen events; growth vs prior year in cc

Sandoz Sales expected to grow low-to-mid single digit

Core OpInc expected to decline low double digit, reflecting

required stand-up investments to transition Sandoz

to a separate company and continued inflationary pressures

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Our guidance assumes that we see a continuing return to normal global healthcare systems, including prescription dynamics, and that no Sandostatin LAR generics enter in the US in 2023. We continue to expect that the planned Sandoz spin-off is completed in H2 2023.

Foreign exchange impact

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February 01, 2023 01:00 ET (06:00 GMT)