Novartis AG · SIX:NOVN
Novartis — FRESCO 2005 Analyst Presentation
19 slides from Novartis's conference presentation, Jan 19, 2006
Slide 1: Pharma – Strong Performance: Outgrowing the Market
Pharma – Strong Performance Outgrowing the Market Thomas Ebeling CEO, Novartis Pharma AG Member of the Executive Committee of Novartis The following information contains certain forward-looking statements relating to the Company’s business, which can be identified by the use of forward-looking termi
Slide 2: Agenda; Key Messages 2005
Agenda • Performance 2005 • Strategy and Outlook 3 FRESCO 2005 / Thomas Ebeling / 2006-01-19 / Analyst Key Messages 2005 • Dynamic sales growth ahead of market • Top ranked sales force in all key markets1 • Improved operating income margin • Positive newsflow on key compounds • Top rated pipeline 1
Slide 3: Strong Pharma Net Sales Expansion; Return on Sales Increase
Strong Pharma Net Sales Expansion Full year 2005 Growth in % vs. 2004 USD m USD LC Net sales 20 262 10 9 Operating income 6 014 12 Return on sales 29.7% +0.7%-point Employees at year-end 49 308 4 Global market share up from 3.83 to 3.91%1 1 IMS 29 Countries Nov YTD 2005 5 FRESCO 2005 / Thomas Ebelin
Slide 4: Novartis Continues to Grow Ahead of Market; Net Sales Growth in All Regions
Novartis Continues to Grow Ahead of Market Global quarterly value growth rates, in % Health care market Novartis Pharma 11.3 10.4 9.6 7.7 8.1 8.3 7.8 7.3 6.9 7.3 6.5 6.4 6.4 5.3 5.5 5.5 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 1 Q4: Oct and Nov 2005 only Source: IMS 29 Countries 7 FRESCO 2005 / Thomas Eb
Slide 5: Key Growth Drivers Cardiovascular and Oncology; Market Segment Share Gains
Key Growth Drivers Cardiovascular and Oncology Both Exceed USD 5 bn Net sales full year 2005 in USD m1 Growth in LC vs. PY Cardiovascular 5 646 +15% Oncology 5 096 +20% Neuroscience 2 233 +9% Resp. / Derm. 1 793 -5% Transplantation 1 092 -1% Ophthalmics 834 +7% A/B/G/H2 473 +57% Infect. Diseases 278
Slide 6: 8 of Top 10 Products Growing; Diovan Delivers Strongest ARB Growth
8 of Top 10 Products Growing Top 10 product net sales full year 2005 in USD m2 Growth in LC vs. PY Diovan® 3 676 +19% Glivec®1 2 170 +32% Zometa® 1 224 +13% Lamisil® 1 133 -2% Lotrel® 1 075 +17% Neoral® 953 -6% Sandostatin® 896 +8% Lescol® 767 +1% Voltaren® 689 +7% Trileptal® 615 +18% 1 Gleevec® in
Slide 7: Strong Brands in General Medicines Specialty Segments; Oncology Positions
Strong Brands in Attractive General Medicines Specialty Segments • USD 320 m sales in 2005 in US1 • +71% growth in US vs. PY • Global sales of USD 418 m • +43% US growth, driven by successful DTC2 • Strong US NRx3 uptake with 6.5% market segment share • +11% growth in ex-US markets4 • US -27%4 due t
Slide 8: Latest Data Show Even Better than Expected Therapeutic Benefit
Latest Data Show Even Better than Expected Therapeutic Benefit • Clear advantage in overall survival vs. Interferon + Ara-C therapy1 • 93% survival without progression to advanced disease after 54 months of Glivec® as first-line therapy and 90% overall survival2 • Less than 1% of patients progress t
Slide 9: Successful In-Licensing Activities for Development Pipeline and Discovery
Successful In-Licensing Activities for Development Pipeline… • NVA237 (Ph II) in COPD1 • ANA975 (Ph I) for the treatment of Hepatitis C and B • RSV604 (Ph I/II) for respiratory syncytial virus infection • Seboren (Ph I) for hyperphosphatemia in dialysis Sebo GmbH patients • NM100060 (Ph I) nail lacq
Slide 10: A Successful Year in Clinical Development
A Successful Year in Clinical Development Strong data Key approvals • Rasilez®1 – aliskiren • Aclasta® Paget’s (EU) • Galvus®1 – vildagliptin • Diovan® post-MI5 • Exjade® • Diovan® CHF6 (EU) • FTY720 MS2 • Exjade® • Lucentis™3 • Femara® early adjuvant (US) • Telbivudine4 • Femara® extended adjuvant
Slide 11: Mid Single-Digit Branded Market Growth Expected; Key Strategies
Mid Single-Digit Branded Market Growth Expected Global net branded market value growth 6% + Medicare Part D in US 5% + Emerging markets + Aging population – USD 19bn lost to generics1 – Cost containment measures – Safety concerns 2005 2006 1 Estimated for US market; Goldman Sachs, Sep 05 Source: IMS
Slide 12: Strong Portfolio in Attractive Categories; Hypertension Coverage
1 Strong Portfolio in Attractive Categories Respira- Neuro- Infectious CVM1 Oncology tory science Diseases Key in- Diovan® Glivec® Xolair® Trileptal® Famvir® market Co-Diovan® Zometa® Foradil® Exelon® brands Lotrel® Femara® Comtan® Lescol® SAS LAR Stalevo® Exjade® Late- Exforge®2 AMN107 QAB149 FTY72
Slide 13: New Promising Oncology Compounds; Focused Late-Stage Pipeline
1 New Promising Oncology Compounds • Most selective Bcr-Abl inhibitor for CML AMN107 • Highly potent; inhibits 32 of 33 Glivec®-resistant Bcr-Abl mutants • Highly active, well-tolerated cytotoxic agent EPO906 • Potential for combination therapy • Novel inhibitor of protein deacetylation LBH589 • Bro
Slide 14: Good Start of Newsflow in 2006; New Commercial Models
1 Good Start of Newsflow in 2006 • 2301 Placebo controlled dose ranging study Galvus®1 • 2327 Non-inferiority trial to rosiglitazone • 2303 Add-on to metformin • 2305 Add-on to glimepiride • 2302 Long-term use Rasilez®1 • 2305 Add-on to amlodipine • 2307 Add-on to ramipril 1 Tradename pending regula
Slide 15: US Pilot for Category Captainship; Reduce Time to Market
2 US Pilot for Category Captainship Strategy in Hypertension • Focus on categories with multiple drug regimens • Shape treatment guidelines • Offer best product solutions for payors, physicians, patients • Cover all key mechanisms / combinations • Strong SOV1 leadership / category detailing • Powerf
Slide 16: Continue to Build on BD&L Excellence; Productivity Initiatives
4 Continue to Build on BD&L Excellence Number of announced deals, 2003–2005 20 17 15 13 7 7 6 4 4 3 3 3 2 Novartis Merck GSK Roche Astra J&J BMS SP Pfizer Wyeth Sanofi- Lilly Abbot Zeneca Aventis 1 All deals from Preclinical to Ph III / Registration Source: Woodmackenzie, Novartis 31 FRESCO 2005 / T
Slide 17: Novartis Pharma Well Positioned; 2006 Outlook
Novartis Pharma Well Positioned • Strong position in Hypertension, Oncology and key markets • Good balance between mass and specialty products • Comparatively low generic exposure in industry • Attractive and rich development pipeline • Leading field force and marketing performance • Strong in-licen
Slide 18: Appendix: Top Ranking and Market Segment Share
Appendix 35 FRESCO 2005 / Thomas Ebeling / 2006-01-19 / Analyst Top Ranking and Market Segment Share Top 10 products market segment share performance ∆ MS 2005-2004 Rank Market Segment Share, (%) (%-points) Diovan® 1 30 0 Glivec® 1 > 80 N.A. Zometa® 1 75 +4 Lamisil® 1 60 +1 Lotrel® 1 34 0 Neoral® 3
Slide 19: Continued Leading US Market Segment Share
Continued Leading US Market Segment Share Monthly value ARB market segment share Diovan Group In percent Cozaar / Hyzaar Group 45 40 YTD Nov 35 38.2% 30 YTD Nov 25 26.2% 20 15 10 5 0 2003/Jan 2003/Jul 2004/Jan 2004/Jul 2005/Jan 2005/Jul Source: IMS, Nov 2005 37 FRESCO 2005 / Thomas Ebeling / 2006-01