Press Release: Novartis delivers mid single digit -2-

Operating income was USD 11.7 billion (+15%, +13% cc), mainly driven by higher sales and lower legal expenses, partly offset by increased M&S and R&D investments and higher amortization.

Net income was USD 24.0 billion, benefiting from the USD 14.6 billion gain from the divestment of our investment in Roche. EPS was USD 10.71.

Core operating income was USD 16.6 billion (+8%, +6% cc) benefiting from higher sales, partly offset by increased M&S and R&D investments. Core operating income margin was 32.1% of net sales, increasing by 0.4 percentage points (+0.5 percentage points cc).

Core net income was USD 14.1 billion (+7%, +5% cc). Core EPS was USD 6.29 (+9%, +7% cc), growing faster than core net income and benefiting from lower weighted average number of shares outstanding.

Free cash flow increased to USD 13.3 billion (+14% USD). This was mainly driven by higher operating income adjusted for non-cash items and lower payments for legal provisions, partly offset by the USD 650 million upfront payment to in-license tislelizumab from an affiliate of BeiGene, Ltd.

Innovative Medicines net sales were USD 42.0 billion (+8%, +6% cc), with volume contributing 9 percentage points to growth. Generic competition had a negative impact of 3 percentage points, mainly due to Ciprodex, Afinitor, Diovan and Gleevec/Glivec. Pricing had a negligible impact on sales growth. Pharmaceuticals BU grew +7% (cc) driven by Entresto, Cosentyx, Zolgensma and Kesimpta. Oncology BU grew 4% (cc) driven by Promacta/Revolade, Kisqali, Jakavi and Tafinlar + Mekinist.

Sandoz net sales were USD 9.6 billion (0%, -2% cc), with volume contributing 7 percentage points to growth, including 1 percentage point relating to contract manufacturing revenue reclassification. Volume growth was more than offset by a negative price impact of 9 percentage points. Sales in Europe declined -2% (cc), sales in the US declined -15% (cc). Global sales of Biopharmaceuticals grew to USD 2.1 billion (+10%, +7% cc), driven by continued growth ex-US and Ziextenzo (pegfilgrastim) US.

Q4 key growth drivers

Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in

order of contribution to Q4 growth) including:

Entresto (USD 949 million, +34% cc) sustained strong growth

with increased patient share across markets, driven

by demand as the essential first choice therapy for

rEF heart failure

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Cosentyx (USD 1,243 million, +13% cc) saw strong growth driven

by continued underlying demand across indications

in the US and Europe and strong volume growth in China

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Kesimpta (USD 147 million) sales were driven by launch uptake,

strong access and increased

demand based on a superior benefit-risk profile; now

approved in 64 countries

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Kisqali (USD 285 million, +58% cc) sales grew across all geographies

driven by the longest overall survival benefit reported

in HR+/HER2- advanced breast cancer

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Zolgensma (USD 342 million, +36% cc) growth was driven by expanded

access in Europe and Emerging Growth Markets

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Tafinlar + (USD 458 million, +14% cc) saw growth driven by adjuvant

Mekinist melanoma and NSCLC indications

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Promacta/Revolade (USD 518 million, +12% cc) showed growth across all

regions, driven by increased use in chronic ITP and

as first-line treatment for severe aplastic anemia

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Ilaris (USD 284 million, +23% cc) strong sales were driven

by growth across most regions

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Xolair (USD 373 million, +15% cc) continued growth, driven

by both the chronic spontaneous urticaria and severe

allergic asthma indications

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Jakavi (USD 408 million, +12% cc) growth was driven by strong

demand in the myelofibrosis and polycythemia vera

indications

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Mayzent (USD 81 million, +46% cc) continued to grow in MS

patients showing signs of progression despite being

on other treatments

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Tasigna (USD 508 million, +1% cc) mainly driven by US and

Emerging Growth Markets, partly offset by decline

in Europe

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Kymriah (USD 143 million, +4% cc) sales grew in Japan, US,

and Emerging Growth Markets. Coverage continued to

expand, with >350 qualified treatment centers in 30

countries

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Sandoz (USD 555 million, +11% cc) continued to grow across

Biopharmaceuticals all regions

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Emerging Growth Grew +11% (cc) overall. China declined (-3% cc) to

Markets* USD 659 million. Demand continues to increase, sales

impacted by stock compensation in anticipation of

NRDL price reductions, and COVID-19 related regional

lockdowns

*All markets except the US, Canada, Western Europe,

Japan, Australia, and New Zealand

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Net sales of the top 20 Innovative Medicines products in 2021

Q4 2021 % change FY 2021 % change

USD m USD cc USD m USD cc

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

Cosentyx 1 243 12 13 4 718 18 17

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

Entresto 949 33 34 3 548 42 40

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

Gilenya 656 -14 -12 2 787 -7 -9

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

Lucentis 508 -4 -2 2 160 12 8

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

Tasigna 508 -1 1 2 060 5 4

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

Promacta/Revolade 518 10 12 2 016 16 15

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

Tafinlar + Mekinist 458 12 14 1 693 10 8

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

Jakavi 408 9 12 1 595 19 16

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

Xolair 373 11 15 1 428 14 12

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

Sandostatin 345 -5 -4 1 413 -2 -3

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

Zolgensma 342 35 36 1 351 47 46

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

Galvus Group 278 -5 0 1 092 -9 -8

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

Ilaris 284 18 23 1 059 21 22

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

Gleevec/Glivec 233 -20 -19 1 024 -14 -15

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

Afinitor/Votubia 174 -33 -31 938 -13 -14

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

Kisqali 285 55 58 937 36 36

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

Exforge Group 197 -20 -20 901 -8 -11

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

Diovan Group 189 -16 -14 773 -23 -25

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

Kymriah 143 1 4 587 24 22

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

Ultibro Group 148 -8 -5 584 -6 -10

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

Top 20 products total 8 239 5 7 32 664 10 8

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

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February 02, 2022 01:00 ET (06:00 GMT)