Press Release: Novartis delivers continued strong -3-

harboring alterations leading to METex14 skipping

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Tafinlar + Granted FDA accelerated approval for the treatment

Mekinist of adult and pediatric patients with unresectable

or metastatic solid tumors with BRAF V600E mutation

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Regulatory updates

Scemblix Received CHMP positive opinion for the treatment of

adult patients with Philadelphia chromosome-positive

CML in chronic phase, previously treated with two

or more tyrosine kinase inhibitors

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Results from ongoing trials and other highlights

Kisqali New CDK4/6i data at ASCO 2022, from the Ph3 MONALEESA-2

study, reinforces Kisqali as the only drug in class

with consistently proven overall survival benefit

in HR+/HER2- advanced or metastatic breast cancer.

Kisqali plus letrozole maintained an OS benefit for

postmenopausal patients with HR+/HER2- metastatic

breast cancer treated in the first-line, including

patients who required dose modification. An OS benefit

was also observed in all subgroups treated with Kisqali

and letrozole

Further follow-up of MONALEESA-3 showed Kisqali plus

fulvestrant achieved a median OS of more than five-and-a-half

years (67.6 months) in the first-line setting for

postmenopausal women living with HR+/HER2- advanced

or metastatic breast cancer. Data presented at ESMO

Breast Cancer Congress 2022

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Kesimpta New data from the Ph3 ASCLEPIOS I/II trials and ALITHIOS

open-label extension show that after four years nearly

8 out of 10 of people with relapsing multiple sclerosis

(RMS) treated continuously with Kesimpta had no evidence

of disease activity (NEDA-3), compared with 5 out

of 10 of those who switched to Kesimpta at a later

date after initial teriflunomide treatment

Zolgensma Nature Medicine publication of Zolgensma data demonstrated

nearly all children with two and three copies of the

SMN2 gene treated presymptomatically achieved age-appropriate

milestones, including sitting, standing and walking.

All children were free of respiratory and nutritional

support, and serious, treatment-related adverse events

Scemblix Scemblix showed superior efficacy with more-than-two-fold

improvement in major molecular response rate vs. Bosulif(R)

(bosutinib) at 96 weeks (37.6% vs. 15.8%). Long-term

safety remains consistent, with discontinuation rates

due to adverse events more than three times lower

in the Scemblix vs. Bosulif(R) arm (7.7% vs. 26.3%).

Data presented at the 2022 ASCO and EHA annual meetings

Tislelizumab First-line tislelizumab plus chemotherapy showed median

overall survival of 17.2 months vs. 10.6 months for

chemotherapy and reduced risk of death by 34% in patients

with advanced esophageal squamous cell carcinoma.

Data presented at ESMO World Congress on Gastrointestinal

Cancer

Tafinlar + Treatment with Taf + Mek resulted in 47% ORR vs. chemotherapy

Mekinist (11%) and reduced risk of progression or death by

69%, showing significant efficacy improvement in patients

aged 1 to 17 years old with BRAF V600 low-grade gliomas

requiring first systemic treatment. Data presented

at ASCO 2022

Kymriah In the final ELIANA analysis, 55% of patients with

relapsed or refractory B-cell acute lymphoblastic

leukemia (ALL) who were treated with Kymriah were

still alive after more than five years. 44% of patients

who experienced remission within three months of infusion

were still in remission at the five-year mark, demonstrating

the long-term benefit and curative potential of one-time

Kymriah infusion. The safety profile remained consistent

with previously reported results, without late adverse

effects in these heavily pretreated patients. Data

presented at EHA 2022

Piqray Biomarker analysis from the Ph3 SOLAR-1 study showed

Piqray plus fulvestrant has clinical benefit regardless

of the presence of ESR1 mutations and genes implicated

in CDK4/6 inhibitor resistance. Data presented at

ASCO 2022

Sabatolimab Submission in MDS is expected to be based on the ongoing

Ph3 trial as, in isolation, the Ph2 STIMULUS-MDS-1

readout is not supportive of an early submission.

Ph2 will be presented later this year

Icenticaftor Ph2b in COPD demonstrated dose response across multiple

efficacy endpoints, study results to be presented

by the end of 2022. Out-licensing planned

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 half of 2022, Novartis repurchased a total of 61.7 million shares for USD 5.4 billion on the SIX Swiss Exchange second trading line under the up-to USD 15 billion share buyback announced in December 2021. In addition, 1.2 million shares (for an equity value of USD 0.1 billion) were repurchased from employees. In the same period, 10.8 million shares (for an equity value of USD 0.5 billion) were delivered as a result of options exercised and share deliveries related to participation plans of employees. Novartis aims to offset the dilutive impact from equity based participation plans of employees over the remainder of the year. Consequently, the total number of shares outstanding decreased by 52.1 million versus December 31, 2021. These treasury share transactions resulted in an equity decrease of USD 5.0 billion and a net cash outflow of USD 5.2 billion.

As of June 30, 2022, net debt increased to USD 9.5 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 net cash outflow for treasury share transactions of USD 5.2 billion, partially offset by USD 4.2 billion free cash flow during the first half of 2022.

As of Q2 2022, the long-term credit rating for the company is A1 with Moody's Investors Service and AA- with S&P Global Ratings.

2022 outlook

Barring unforeseen events; growth vs. prior year in cc

Innovative Medicines Sales expected to grow mid single digit

Core operating income expected to grow mid to high

single digit, ahead of sales

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Sandoz Sales expected to grow low single digit (revised upwards

from broadly in line)

Core operating income expected to be broadly in line

with prior year (revised upwards from to decline low

to mid single digit)

Group Sales expected to grow mid single digit

Core operating income expected to grow mid single

digit

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Our guidance assumes that we see a continuing return to normal global healthcare systems, including prescription dynamics, and that no Gilenya and no Sandostatin LAR generics enter in the US.

In June 2022, an appeals court held the Gilenya US dosing regimen patent invalid. Novartis plans to petition the appeals court for further review to uphold validity of the dosing regimen patent. There is no generic competition in the US at this time. In Q2, Gilenya US sales were USD 332 million, US sales have been steadily declining due to competitive pressures.

Foreign exchange impact

If mid-July exchange rates prevail for the remainder of 2022, the foreign exchange impact for the year would be negative 6 to negative 7 percentage points on net sales and negative 7 to negative 8 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures(1)

Excluding Roche

income(2) Reported

Q2 Q2

Group 2022 2021 % change Q2 2021 % change

USD m USD m USD cc USD m USD cc

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

Net sales 12 781 12 956 -1 5 12 956 -1 5

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

Operating income 2 228 3 479 -36 -30 3 479 -36 -30

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As a % of sales 17.4 26.9 26.9

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Core operating income 4 270 4 345 -2 5 4 345 -2 5

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July 19, 2022 01:00 ET (05:00 GMT)