Novartis AG · SIX:NOVN

Novartis — Merrill Lynch Generics Conference 2008

12 slides from Novartis's conference presentation, Dec 1, 2008

  1. Slide 1: Expanding the boundaries of Generics

    Expanding the boundaries of Generics Merrill Lynch Generics Conference Andreas Rummelt Member of the Executive Committee Novartis Frankfurt, December 1, 2008 These materials contain certain forward-looking statements relating to the Group's business, which can be identified by the use of forward-loo

  2. Slide 2: Agenda; Sustained growth outlook for generics industry

    Agenda Generics market environment Sandoz strategy and performance Conclusion and outlook Sustained growth outlook for generics industry Growing ƒ World’s population to expand by 1/3 within 40 years population Aging ƒ Elderly segment to expand 3 times faster than world’s population population ƒ Heal

  3. Slide 3: Generics industry offers worldwide growth potential; Pace of consolidation is continuing

    Generics industry offers worldwide growth potential Retail generics industry estimates1, in USD bn CAGR2 % 2008-13 Characteristics 135 Worldwide 9 • Emerging Gx industry continues to grow 48 Rest of World 12 • Maturing Gx industry slows down 87 18 Rest of Americas 10 • -7-8% price erosion p.a. 27 5

  4. Slide 4: Challenge for Gx to finance future growth; Key success factors for generics

    Challenge for Gx to finance future growth Development of assets1 and EBIT (as % of sales) for Gx industry2 90 Asset Increasing asset1 intensity: intensity1 80 ƒ 2007: 86c of assets for each $ of sales 70 ƒ Increased +2.6 points per year 60 50 Financing 40 the growth? 30 20 Adjusted Declining profita

  5. Slide 5: 2008 characterized by continued productivity gains

    Agenda Generics market environment Sandoz strategy and performance Conclusion and outlook 2008 characterized by continued productivity gains 9M 2008 - Sandoz Growth vs. 9M 2007 USD m in USD in LC Net sales 5 753 +11% +1% Operating income 884 +12% Adjusted operating income1 1 132 +4.5% Return on net

  6. Slide 6: Strong platform for future growth; Broad and deep geographical presence

    Strong platform for future growth Comprehensive portfolio of generic medicines Retail ƒ Four main brands Generics ƒ >950 compounds2 available in >5,000 forms 87%1 ƒ High share of difficult-to-make products, >27% of net sales Antibiotics as “enabling platform” Anti- ƒ World leader in antibiotic manuf

  7. Slide 7: Continuing strong growth in emerging markets; Significant challenges in the US

    Continuing strong growth in emerging markets Maturing Generics Emerging Generics ƒ UK, Scandinavia ƒ France ƒ Netherlands ƒ Italy ƒ Germany ƒ Belgium ƒ Slovenia 9M 2008 Sales1 ƒ Russia ƒ Hungary ƒ Poland ƒ Czech Rep. ƒ Romania ƒ Australia ƒ China +1% 61% 39% +26% ƒ Japan ƒ India ƒ US ƒ Brazil ƒ Mexi

  8. Slide 8: Expanding the boundaries of Generics; Share gains in Germany

    Expanding the boundaries of Generics Enoxaparin ƒ Low molecular weight heparin (Lovenox®) ƒ Petition for rehearing of federal appeals court decision failed Originator: Sanofi-aventis ƒ Competitor’s exclusivity period is running and expiring Annual sales: ƒ Sandoz: Immunogenicity response to FDA file

  9. Slide 9: Strong growth in Central & Eastern Europe; Strong performance all over the world

    Strong growth in Central & Eastern Europe 9M net sales1 by country in USD m Russia Poland Romania Ukraine Others +21% +56% +31% +35% +28% 9M 9M 9M 9M 9M 9M 9M 9M 9M 9M 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 1 At period rates 17 | Merrill Lynch Generics Conference | Andreas Rummelt | Decem

  10. Slide 10: Sandoz with accelerating sales growth in Japan; Sales growth in Omnitrope

    Sandoz with accelerating sales growth in Japan Strong performance of Sandoz K.K. Japan domestic sales2 in USD m ƒ Successful Amlodipine launch • #10 in IMS • Top 6 product for Sandoz K.K. +37% ƒ Carboplatin became top product • Oncology key account established in 2008 ƒ Expanding customer base • DPC

  11. Slide 11: Binocrit strong EPO launch in Germany

    Binocrit® strong EPO launch in Germany German monthly gross sales development1 in USD m 12.5 Complex biosimilar ƒ Binocrit® as first 10.0 EPO biosimilar in Aranesp® Germany ƒ 25% price cuts after 7.5 biosimilar entry Reference product Parallel imports Erypo® Neorecormon® 5.0 Erypo® Dynepo® 2 2.5 Wit

  12. Slide 12: Sandoz focused on leadership in generics

    Sandoz focused on leadership in generics A global leader in fast-growing and dynamic generics market ƒ Strong global #2 Sandoz ƒ Broad and deep global presence ƒ Unmatched capabilities in difficult-to-make generics Gaining momentum through growth and operational excellence ƒ Goal to be first to mark

Novartis — Merrill Lynch Generics Conference 2008 on 6ix