Press Release: Novartis delivers mid single digit -3-

R&D update - key developments from the fourth quarter

New approvals

Leqvio Approved in the US as the first and only small interfering

(inclisiran) RNA (siRNA) therapy for LDL-C reduction. Leqvio provides

effective and sustained LDL-C reduction of up to 52%

vs placebo

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Cosentyx Approved in the US for ERA and JPsA (forms of juvenile

idiopathic arthritis). Cosentyx is now the first biologic

indicated for ERA, and the only biologic treatment

approved for both ERA and PsA in pediatric patients

in the US

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Scemblix Approved in the US for the treatment of CML in: 1)

(asciminib) adult patients with Philadelphia chromosome-positive

CML in chronic phase (Ph+ CML-CP), previously treated

with two or more tyrosine kinase inhibitors (TKIs).

2) Adult patients with Ph+ CML-CP with the T315I mutation

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Regulatory updates

Kymriah FDA and EMA accepted a Supplemental Biologics License

Application and Type II Variation, respectively, in

adult patients with relapsed or refractory follicular

lymphoma after two prior lines of treatment

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Cosentyx Regulatory submissions made in ERA and JPsA in Europe

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Branaplam FDA granted fast track designation for the treatment

(LMI070) of Huntington's Disease

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Alpelisib FDA granted priority review for the treatment of PIK3CA-related

(BYL719) overgrowth spectrum

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Trastuzumab Sandoz submitted a Biologics License Application to

the FDA for a biosimilar used to treat human epidermal

growth factor receptor 2 positive (HER2-positive)

breast cancer and metastatic gastric cancers

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Results from ongoing trials and other highlights

Ensovibep In early January 2022, the Ph2 EMPATHY Part A study

in acute COVID-19 ambulatory patients, met its primary

endpoint of viral load reduction over eight days.

Ensovibep continues to maintain potent in vitro pan-variant

activity against all variants of concern identified

so far, including Omicron. On 17 January 2022, Novartis

exercised its option to in-license and plans to seek

expedited regulatory authorizations globally

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Cosentyx Ph3 SUNRISE and SUNSHINE studies met their primary

endpoint in moderate to severe hidradenitis suppurativa

(HS). Safety was consistent with the known profile

of Cosentyx

Ph3 JUNIPERA study (children with active ERA and jPSA)

two-year results demonstrated a 72% reduction in the

risk of flare with Cosentyx versus placebo. Safety

was again consistent with known profile

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Ligelizumab Ph3 PEARL 1 and PEARL 2 studies in chronic spontaneous

urticaria, met their primary endpoints of superiority

for ligelizumab versus placebo at Week 12, but not

versus omalizumab (Xolair). Novartis is continuing

to evaluate the data and will provide an update in

due course

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Scemblix Ph3 ASCEMBL trial (3L Ph+ CML -- CP) showed improved

(asciminib) major molecular response and lower discontinuation

rate vs bosutinib at 48 weeks. Data was presented

at ASH 2021

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Leqvio Ph3, ORION-9, -10 and -11 pooled post-hoc analyses

(inclisiran) data demonstrated effective and sustained lipid lowering

compared to placebo across a range of atherogenic

lipids, when used in addition to other lipid-lowering

therapies. Results were presented at the American

Heart Association Scientific Sessions 2021

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Kymriah Ph2 ELARA study showed strong efficacy in high-risk

patients with relapsed or refractory follicular lymphoma

based on a subgroup analysis from 17 month median

follow-up. Data was presented at ASH 2021

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YTB323 One of the Novartis CAR-T cell therapies being developed

T-Charge(TM) using T-Charge(TM). Ph1 data in DLBCL demonstrated

73% complete response rate at month three in 15 patients.

Data was presented at ASH 2021

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PHE885 One of the Novartis CAR-T cell therapies being developed

T-Charge(TM) using T-Charge(TM). Ph1 data in multiple myeloma demonstrated

100% best overall response in 11 patients. Data was

presented at ASH 2021

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Ianalumab Ph2b study in Sjögren's disease met its primary

(VAY736) endpoint, defined as change in ESSDAI from baseline

at 24 weeks. Efficacy was demonstrated on systemic

extra-glandular manifestations and displayed good

tolerability

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Kisqali Ad-hoc exploratory analysis from the Ph3 MONALEESA

program showed that Kisqali in combination with ET

consistently provided significant OS benefit compared

to ET alone across most common intrinsic tumor subtypes.

Data was presented at SABCS 2021

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Ociperlimab Option, collaboration and license agreement with BeiGene,

Ltd. for TIGIT inhibitor ociperlimab. Two Ph3 trials

are underway in non-small cell lung cancer and additional

studies ongoing in a wide range of solid tumors

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Gyroscope Entered into a definitive agreement to acquire Gyroscope

Therapeutics Therapeutics, including an investigational, one-time

gene therapy currently in Ph2 for geographic atrophy*

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DLX313 Global co-development and co-commercialization agreement

(UCB0599) / with UCB for potentially disease-modifying therapies

UCB7853 DLX313 (UCB0599), with opt-in for UCB7853, in Parkinson's

Disease

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* Closing of the transaction is subject to customary closing conditions including regulatory approvals. Until closing, Novartis and Gyroscope Therapeutics will continue to operate as separate and independent companies.

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 2021, Novartis repurchased a total of 30.7 million shares for USD 2.8 billion on the SIX Swiss Exchange second trading line, including 19.6 million shares (USD 1.8 billion) under the up to USD 2.5 billion share buyback announced in November 2020, 8.6 million shares (USD 0.8 billion) to mitigate dilution related to participation plans of associates and 2.5 million shares (USD 0.2 billion) under the up to USD 15 billion share buyback announced in December 2021. In addition, 1.5 million shares (USD 0.1 billion) were repurchased from associates. In the same period, 10.3 million shares (for an equity value of USD 0.8 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 21.9 million versus December 31, 2020. These treasury share transactions resulted in a decrease in equity of USD 2.1 billion and a net cash outflow of USD 3.0 billion.

As of December 31, 2021, the net debt decreased to USD 0.9 billion compared to USD 24.5 billion at December 31, 2020. The USD 23.6 billion decrease was mainly driven by the proceeds received from the Roche divestment of USD 20.7 billion and free cash flow during 2021 of USD 13.3 billion, partially offset by the USD 7.4 billion annual dividend payment and the net cash outflow for treasury share transactions of USD 3.0 billion.

The Group has not experienced liquidity or cash flow disruptions during 2021 due to the COVID-19 pandemic. We are confident that Novartis is well positioned to meet its ongoing financial obligations and has sufficient liquidity to support its normal business activities.

As of Q4 2021, the long-term credit rating for the company is A1 with Moody's Investors Service and AA- with S&P Global Ratings.

2022 outlook

(MORE TO FOLLOW) Dow Jones Newswires

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