Novartis Ag · SIX:NOVN
Novartis — Lehman Brothers Florida conference 2003
22 slides from Novartis's conference presentation, Jun 7, 2003
Slide 1: Novartis 2002: Outperforming the Market, Investing in the Future
Novartis 2002: Outperforming the Market Investing in the Future Larry Perlow, MD Senior Vice President and General Manager Novartis Pharmaceuticals, USA The following information contains certain "forward-looking Statements", relating to the Company’s business, which can be identified by the use of
Slide 2: Agenda; 2002 Results – Key Figures
Agenda • 2002 Results • Focus on Pharmaceuticals • Outlook 3 2002 Results – Key Figures in CHF m 2002 2001 Change in % in CHF in LC in USD2 Sales 32 412 31 643 +2 +11 +11 Operating income 7 887 7 277 +8 +10 +17 as a % of sales 24.3 23.0 Net income 7 313 7 024 +4 +13 as a % of sales 22.6 22.2 Free Ca
Slide 3: Strong Sales Growth in 2002 Driven by Pharmaceuticals and Generics
NVS: Strong Sales Growth in 2002 Driven by Pharmaceuticals and Generics Full Year 2002 Sales from Ongoing Businesses CHF 32.4 Bio (+11% Local Currency) CIBA Vision CHF 1.8 Bio Infant & Baby (+6% LC) CHF 2.1 Bio (+3% LC) 1Q03 1Q03 Results: Results: Medical Nutrition CHF 1.1 Bio (+4% LC) April April 1
Slide 4: Novartis Operating Margin up 1.3% Points
Novartis Operating Margin up 1.3% Points • COGS improvement driven by COGS 24.9% 23.5% product mix and gains in productivity • Marketing & Sales investments M&S 33.9% 33.9% maintained in support of launches in Pharmaceuticals R&D 13.2% 13.4% G&A 5.0% 4.9% ROS 23.0% 24.3% 2001 2002 7 Agenda • 2002 Re
Slide 5: Broad Range of Strategic Products Drive Pharmaceutical Growth
Broad Range of Strategic Products Drive Pharmaceutical Growth Sales 2002 Growth Brands (1 to 10) Market segment CHF m (% LC) Diovan®/Co-Diovan® Hypertension 2 580 +49 Sandimmun®/Neoral® Transplantation 1 607 -5 Lamisil® Fungal infections 1 355 +4 Lotrel® Hypertension 1 011 +35 Glivec®/Gleevec™ Oncol
Slide 6: Novartis 2002 Growth Rate Consistently Ahead of Market
Novartis 2002 Growth Rate Consistently Ahead of Market 20 Worldwide 15 Market 10 Novartis 5 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec USA 20 15 Market 10 Novartis 5 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Source: IMS 11 Novartis Has The Fastest Growing CV Franchise… The 2 Fas
Slide 7: ARB Segment Growth Is Accelerating
ARB Segment Growth Is Accelerating... Driven By “Mono ARB” Portion Of Business... Mono ARB & ARB+HCT Combo Segment 60% NRx MAT Growth 50% 40% ARB + HCT Segment Growth 30% 20% 10% ARB Only Segment Growth 0% Jan-01 Jul-01 Jan-02 Jul-02 Dec-02 Source: IMS 13 Continuing to Outpace Competition After Beco
Slide 8: New Dosages Offer Broadest Range of Double Digit Efficacy
New Dosages Offer Broadest Range Of Double Digit Efficacy... New 160 mg starting dose and 160/25 HCT combination dose Systolic Diastolic -1.70 -4.00 160 (n=97) -10.57 160/12.5 (n=96) -12.60 160/25 (n=94) -13.45 Placebo (n=93) -16.12 All data p < 0.001 -18.66 -23.24 1 Blood pressure lowering Source:
Slide 9: ADA Recommends 1st line Use of ARBs in Hypertensives with Type 2 Diabetes
ADA Recommends 1st line Use of ARBs in Hypertensives with Type 2 Diabetes Marval Study: In type II diabetes and uncontrolled BP>130/80mg Hg: Diovan reduced urine albumin excretion by 44% 20 P < 0.001 10 Change in UAER From 0 Baseline, % (–8%) –10 –20 –30 Valsartan –40 Amlodipine (–44%) –50 0 4 8 12
Slide 10: Lotrel Addresses Unmet Market Needs
Lotrel® Addresses Unmet Market Needs– Efficacy, Protection and Convenience Targets: Moderate-to-Severe Hypertensives, Failures on ACEI or Norvasc/CCB Monotherapy Over 50% of ACE monotherapy starts will not reach BP goals Most Patients Require 2+ Agents To Achieve Goals; Compliance Issues Lotrel® : 9
Slide 11: Novartis Oncology Full Year 2002 Sales – Exceeded Expectations
Significant Reductions in Microalbuminuria Source: Fogari R, et al., Clin Drug Invest., 1997; 13: 50-55 21 Novartis Oncology Full Year 2002 Sales – Exceeded Expectations Sales 2002 – CHF 3.8 bn (+28% LC) All others (-8%) 11% 31% Aredia® + Zometa® GleevecTM/Glivec® (-6%) (+303%) 26% 7% Femara® 25% (+
Slide 12: The Two Most Successful Oncology Launches
The Two Most Successful Oncology Launches Oncology sales world-wide from date of launch Sales USD m 160 120 80 40 0 Year 1 Year 2 Year 3 Glivec®/Gleevec™ 6/01 Zometa® 10/00 Gemzar 6/95 Taxol 3/93 Camptosar 4/94 Rituxan 12/97 Herceptin 10/98 Source: IMS MIDAS worldwide oncology sales 23 Dramatically
Slide 13: Strong Progression-Free Survival with Glivec/Gleevec
Strong Progression – Free Survival with Glivec®/Gleevec™ % without progression 100 Glivec®/Gleevec™ 90 80 IFN+Ara-C 70 60 Estimated PFS1 at 18 months 50 Glivec®/Gleevec™ 92.3% (p < 0.001) 40 IFN+Ara-C 73.6% 30 Imatinib 20 IFN+Ara-C 10 = Censored observations 0 0 3 6 9 12 15 18 21 24 Months since ran
Slide 14: Zometa: Managing a Blockbuster Lifecycle
Zometa® : Managing a Blockbuster Lifecycle Advanced cancer Early cancer No cancer Therapy PMO1, Bone Prevention of Indication induced bone Paget’s metastases BM disease loss Dosing Every 3-4 Every 3-6 Once a schedule Once a month weeks months year Broad impact on “Bone health” 1 Post-menopausal oste
Slide 15: An Outstanding Launch. DTC Campaign Now Underway
An Outstanding Launch. DTC Campaign Now Underway 12% DTC Elidel® 10% NRx Share 8% 6% Cutivate 4% Elocon Protopic 2% 0% 02 02 2 02 02 02 02 02 2 2 2 03 03 1/ 1/ 1/ 0 1/ 1/ 1/ 1/ 1/ /0 /0 /0 1/ 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ /1 /1 /1 1/ 2/ 10 11 12 29 Comprehensive Lifecycle Management1 Launch cream Launc
Slide 16: Zelnorm: Three Key Phases to Build a Blockbuster
Zelnorm™ Three Key Phases to Build a Blockbuster Sales New indications Patient awareness Improved diagnosis Safety perception Time 31 Adoption Rates Continue To Increase Each Week On A Linear Trend 70% GE 60% 50% Adoption Rate 40% 30% PCP 20% 10% 0% 02 03 03 2 2 2 2 2 2 10 2 10 2 02 02 2 2 11 2 02 0
Slide 17: Hesitant doctors are initiating trial in a handful of patients
Hesitant doctors are initiating trial in a handful of patients; GEs are accelerating Productivity of Rxing 13 GE 12 11 10 9 Productivity 8 7 6 5 PCP 4 3 2 1 1/3/03 2/7/03 9/6/02 1/24/ 03 1/31/ 03 8/16/02 8/23/02 8/30/ 02 9/13/ 02 9/20/02 9/27/02 10/4/ 02 10/11/02 10/18/02 10/25/02 11/1/ 02 11/8/ 02
Slide 18: Lifecycle Plans Targeting Large GI Markets
Lifecycle Plans Targeting Large GI Markets1 Global estimate – millions of sufferers 180 150 113 75 Lifestyle modification OTC Prescriptions CC IBS GERD FD Global prevalence: 10% 15% 20% 25% 1 Patient overlap exists across targeted markets Sources: Tally et al., Am. J. Epidemiology, 1995;142:76–83; N
Slide 19: Strategic Outlook and Priorities 2003
Agenda • 2002 Results • Focus on Pharmaceuticals • Outlook 37 Strategic Outlook and Priorities 2003 • Focus on Healthcare with Pharmaceuticals at its core • Pursue sustainable growth strategy: − Differentiation and competitive investments in global brands − Leadership in key franchises – gain market
Slide 20: US Pharma Market Expansion to Continue
US Pharma Market Expansion to Continue Novartis Pharmaceuticals sales by region in % 26% 22%E Rest of World 31% 30%E 32% Europe 36% 42% 48%E US 33% 1997 2002 2005 Source: Full Year Results 2002, Strategic Plan October 2002 39 Continued Portfolio Rejuvenation Pharmaceuticals sales by category Gleevec
Slide 21: Strong Patent Protected Portfolio; Pipeline Update
Strong Patent Protected Portfolio Patent expiries 2002–2006 Share of sales, moving annual total (MAT) September 2002 (in %) 80 69 60 56 41 40 40 35 34 33 31 22 18 18 16 20 15 13 13 12 12 10 5 2 0 Esai Amgen Wyeth Novartis Aventis GSK BI S-P MSD Abbott BMS Roche AZN Lilly Takeda Pharmacia J&J Sanofi
Slide 22: Number of Blockbusters Will Increase Substantially; Financial Outlook 2003
Number of Blockbusters1 Will Increase Substantially 2002 2007E Cardiovascular Diovan® Diovan®, Lotrel® Arthritis/pain Prexige™ Oncology Glivec®/Gleevec™, Zometa® Gastrointestinal Zelmac®/Zelnorm™ Dermatology Lamisil® Transplantation Neoral® 1 Peak sales > USD 1 bn (assumed exchange rate: USD 1 = CHF