Press Release: Novartis delivered sales growth in Q2 and further advanced the pipeline; Full-year guidance reaffirmed

Ad hoc announcement pursuant to Art. 53 LR

Second quarter

-- Net sales grew +1% (cc1, +3% USD), with core operating income1 flat (cc

and USD)

-- Sales growth driven by priority brands including Kisqali (+43% cc),

Kesimpta (+32% cc), Scemblix (+89% cc), Pluvicto (+43% cc) and

Leqvio (+59% cc)

-- Core operating income margin1 was 41.2%, -70 basis points (cc)

-- Q2 operating income declined -3% (cc, -2% USD); net income down -19% (cc

and USD)

-- Q2 core EPS1 declined -1% (cc, 0% USD) to USD 2.41

-- Q2 free cash flow1 was USD 5.6 billion (-12% USD)

-- H1 net sales down -2% (cc, +1% USD) with core operating income -7% (cc,

-6% USD)

-- Q2 selected innovation milestones:

-- Rhapsido EC and JP approval in CSU, Phase III CIndU data presented

at EAACI

-- Itvisma EC approval as the only gene replacement therapy for a

broad SMA patient population

-- Kisqali 6-year eBC follow up data showed clinically meaningful

overall survival; FDA granted pediatric exclusivity, adding a

6-month period of exclusivity to all existing patents listed in

the Orange Book

-- Del-zota BLA submitted to the FDA for accelerated approval in DMD

-- Del-brax positive Phase I/II biomarker data in facioscapulohumeral

muscular dystrophy (FSHD)

-- Full-year 2026 guidance2 reaffirmed

-- Net sales expected to grow low single-digit and core operating

income expected to decline low single-digit

Basel, July 21, 2026 -- Commenting on Q2 2026 results, Vas Narasimhan, CEO of Novartis, said:

"Novartis delivered a solid second quarter, returning to sales growth driven by continued momentum from Kisqali, Kesimpta, Scemblix and Pluvicto. We are encouraged by the early trajectory of our recent launches, Rhapsido in CSU and Itvisma. We also made meaningful pipeline progress, highlighted by updated Kisqali overall survival data in early breast cancer and the FDA accelerated approval submission for del-zota in DMD. We are on track for multiple important readouts ahead in the second half, and remain on track to deliver our full-year guidance and mid-term outlook."

Key

figures

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Q2 2026 Q2 2025 % change H1 2026 H1 2025 % change

USD USD USD

m(3) m(3) USD cc m(3) USD m(3) USD cc

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

Net sales 14 408 14 054 3 1 27 521 27 287 1 -2

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

Operating

income 4 750 4 864 -2 -3 8 985 9 527 -6 -7

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

Net income 3 257 4 024 -19 -19 6 413 7 633 -16 -17

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

EPS (USD) 1.71 2.07 -17 -18 3.37 3.91 -14 -15

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

Free cash

flow 5 561 6 333 -12 8 891 9 724 -9

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

Core

operating

income 5 940 5 925 0 0 10 837 11 500 -6 -7

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

Core net

income 4 578 4 710 -3 -4 8 372 9 192 -9 -10

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

Core EPS

(USD) 2.41 2.42 0 -1 4.39 4.69 -6 -8

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

1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 43 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 7. 3. USD millions unless indicated otherwise.

Strategy

Our focus

Novartis is a "pure-play" innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies -- the US, China, Germany and Japan.

Our priorities

1. Accelerate growth: Renewed attention to deliver high-value medicines

(NMEs) and focus on launch excellence, with a rich pipeline across our

core therapeutic areas.

2. Deliver returns: Continuing to embed operational excellence and deliver

improved financials. Novartis remains disciplined and shareholder-focused

in our approach to capital allocation, with substantial cash generation

and a strong capital structure supporting continued flexibility.

3. Strengthen foundations: Unleashing the power of our people, scaling data

science and technology and continuing to build trust with society.

Financials

Second quarter

Net sales were USD 14.4 billion (+3%, +1% cc), with volume growth contributing 18 percentage points, offset by 14 percentage points from generic competition. Pricing had a negative impact of 3 percentage points, and currency had a positive impact of 2 percentage points.

Operating income was USD 4.8 billion (-2%, -3% cc), declining mainly due to lower gross profit, partly offset by lower SG&A expenses.

Net income was USD 3.3 billion (-19%, -19% cc), impacted by higher income taxes and higher interest expense. EPS was USD 1.71 (-17%, -18% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 5.9 billion (0%, 0% cc), in line with the prior-year quarter. Core operating income margin was 41.2% of net sales, decreasing 1.0 percentage point (0.7 percentage points in cc).

Core net income was USD 4.6 billion (-3%, -4% cc), mainly due to higher interest expense. Core EPS was USD 2.41 (0%, -1% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 5.6 billion (-12%), due to lower net cash flows from operating activities.

First half

Net sales were USD 27.5 billion (+1%, -2% cc), with volume growth contributing 15 percentage points, offset by 14 percentage points from generic competition. Pricing had a negative impact of 3 percentage points, and currency had a positive impact of 3 percentage points.

Operating income was USD 9.0 billion (-6%, -7% cc), declining mainly due to lower gross profit, partly offset by lower legal related costs and lower SG&A expenses.

Net income was USD 6.4 billion (-16%, -17% cc), mainly due to lower operating income, higher income taxes and higher interest expense. EPS was USD 3.37 (-14%, -15% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 10.8 billion (-6%, -7% cc), declining mainly due to lower gross profit. Core operating income margin was 39.4% of net sales, decreasing 2.7 percentage points (2.3 percentage points in cc).

Core net income was USD 8.4 billion (-9%, -10% cc), mainly due to lower core operating income and higher interest expense. Core EPS was USD 4.39 (-6%, -8% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 8.9 billion (-9%), due to lower net cash flows from operating activities.

Q2 priority brands

Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q2 growth) including:

Kisqali (USD 1 695 million, +43% cc) sales grew strongly across

all regions, with continued market share growth in

the early breast cancer indication as well as leadership

in metastatic breast cancer.

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Kesimpta (USD 1 424 million, +32% cc) sales grew across all

regions, driven by increased demand and strong access.

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Scemblix (USD 562 million, +89% cc) sales grew across all regions,

with continued strong momentum from the newly diagnosed

patients-line indication in the US, Japan and Germany.

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Pluvicto (USD 651 million, +43% cc) sales showed continued

strong demand in the pre-taxane metastatic castration-resistant

prostate cancer (mCRPC) setting in the US, and access

expansion ex-US.

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Cosentyx (USD 1 824 million, +10% cc) sales grew driven by

US performance including growth in HS and IV. Ex-US,

growth in Europe and most emerging markets was partly

offset by a decline in China.

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Leqvio (USD 480 million, +59% cc) sales grew across all regions,

with continued uptake in China following NRDL inclusion.

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