Novartis AG · SIX:NOVN
Novartis — FY2004 Earnings Presentation
14 slides from Novartis's earnings presentation, Jan 20, 2005
Slide 1: Pharmaceuticals: Continued Strong Performance
Pharmaceuticals Continued Strong Performance Thomas Ebeling CEO, Novartis Pharma AG Agenda • Performance 2004 • Strategy and outlook 2005 2 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts 1
Slide 2: Key Messages; Strong Sales and Operating Income Growth
Key Messages • Strong positive margin development • Continued double-digit sales growth • Market share up to 4.50% from 4.42%1 • Five blockbuster brands • Top ranked sales force • Industry leading pipeline 1 IMS Healthcare Market 16 countries YTD November 3 FRESCO 2004 / Thomas Ebeling / 2005-01-20
Slide 3: Margin Improvement in All Functions; All Regions with Dynamic Growth
Margin Improvement in All Functions Key ratios1 2003 2004 Change in % pts Net Sales 100% 100% Cost of Goods Sold 14.7% 13.9% + 0.8 R&D 19.2% 18.8% + 0.4 Marketing & Sales 33.2% 33.0% + 0.2 General & Admin. 3.6% 3.5% + 0.1 Other Income & Expense 2.4% 3.3% - 0.9 Operating Income 27.6% 28.4% + 0.8 1 As
Slide 4: Dynamic Growth in Key Franchises; Increased Market Segment Share
Dynamic Growth in Key Franchises … Net sales 2004 Change in % (LC) in USD m vs. 2003 Cardiovascular 4 891 17 Nervous System 2 022 12 Resp./Derm. 1 875 17 A/B/G/H/I1 299 81 Infect. Diseases 269 8 Oncology 4 215 22 Transplantation 1 092 -5 Ophthalmics 775 19 Mature Products 3 059 -12 Pharma Total 18 4
Slide 5: Strong Performance of Top Products; Leading GP Brands
Strong Performance of Top 10 Products … Net sales 2004 Change in % (LC) in USD m vs. 2003 Diovan® 3093 22 Glivec®1 1 634 36 Lamisil® 1 162 14 Zometa® 1 078 17 Neoral® 1 011 -7 Lotrel ® 920 18 Sandostatin® 827 14 Lescol® 758 -2 Voltaren® 638 1 Trileptal® 518 29 1 Gleevec® in US 9 FRESCO 2004 / Thomas
Slide 6: Patient Oriented Marketing Initiatives; Top Rankings of Specialty Brands
Strong Patient Oriented Marketing Initiatives 11 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts Top Rankings of Specialty Brands Segment Brand share in % Rank Blockbuster1 >802 1 72 1 22 2 ≤2009 24 3 100 1 1 Expected for Femara® 2 In chronic myeloid leukemia Source: IMS 16 Countries YTD Octobe
Slide 7: Continued Dynamic Oncology Growth; US Top Ranked Sales Force
Continued Dynamic Oncology Growth Oncology market segment share of top 5 companies, MAT Q3 2004 Growth rate Roche/Genentech 14.6% + 25% Amgen 13.6% + 49% Novartis 9.1% + 30% Sanofi-Aventis 8.8% + 29% AstraZeneca 7.7% + 21% Source: IMS MIDAS Worldwide oncology sales adjusted 13 FRESCO 2004 / Thomas E
Slide 8: Europe #1 Field Force; Excellent Development Track Record
Europe – #1 Field Force Field force ranking of Pharma companies in Europe by CV1 prescribers 2001 2002 2003 2004 9 Pfizer 79 Pfizer 77 Pfizer 81 Novartis 77 AstraZeneca 78 Novartis 76 Novartis 80 Pfizer 76 MSD 73 MSD 75 AstraZeneca 79 AstraZeneca 70 Novartis 72 AstraZeneca 73 MSD 76 Sanofi 68 BMS 63
Slide 9: R&D Direction Key Innovative Products; Strong New Clinical Data
R&D Direction – Key Innovative Products SPP100 LAF237 PTK787 Hypertension Type 2 diabetes Colorectal cancer Renin VEGF FTY720 QAB149 Transplantation MS Asthma, COPD 17 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts Strong New Clinical Data ICL670 • Positive Phase III results for high doses1 FT
Slide 10: Novartis Pharmaceuticals Key Strategies
Agenda • Performance 2004 • Strategy and outlook 2005 19 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts Novartis Pharmaceuticals Key Strategies • Innovative blockbusters • Strong growth in both General and Specialty Medicines • Leading positions in attractive categories • Create premier pipeli
Slide 11: General Medicines Growth Drivers 2005; Strong LCM Program
General Medicines – Growth Drivers 2005 • New indications (PMI1 & HF2 ) roll-out globally • High strengths Co-Diovan® roll out in EU • Screening / compliance initiatives • Celebrity campaign • Screening / compliance initiatives • Approval and launch in EU3 • Increased penetration US • Improved profe
Slide 12: Strong Outlook; Specialty Medicines Growth Drivers 2005
Strong Outlook US asthma patients, in m Adult asthmatics treated 10 100% Moderate/severe allergic asthmatics 2 20% Inadequately 0.5 5% controlled Xolair® 2004 0.02 0.2% Current average Xolair® treatment cost of USD 12 000 p.a. 23 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts Specialty Medicin
Slide 13: Strong Pre-Marketing / Launch Initiatives in 2005
Strong Pre-Marketing / Launch Initiatives in 2005 1 Early Adjuvant PTK787 ICL670 1 Trade name pending FDA approval in US 25 FRESCO 2004 / Thomas Ebeling / 2005-01-20 / Analysts Growing Number of Blockbusters Anticipated 71 5 1 2000 2004 2008–2009 1 Products anticipated to maintain/reach blockbuster
Slide 14: Highly Attractive Late Stage Pipeline; Strong Newsflow in 2005
Highly Attractive Late Stage Pipeline First-in- Gold standard Large market Phase class potential potential Aclasta1 (osteoporosis) III 9 9 AAE581 (osteoporosis) II 9 9 PTK787 (colorectal cancer) III 92 9 9 ICL670 (iron overload) III 9 9 FTY720 (transplantation) III 9 9 9 LDT600 (hepatitis B) III 9 L