Basel, March 31, 2025 – Novartis announced today the appointment of Karen Hale to the expanded role of Chief Legal and Compliance Officer for Novartis, effective April 14, 2025. She will continue to report to Vas Narasimhan, M.D., CEO of Novartis and remain on the Executive Committee of Novartis (ECN). Klaus Moosmayer, currently Chief Ethics, Risk & Compliance Officer of Novartis, has decided to leave the company and will step down from the ECN to pursue his next chapter of leadership outside Novartis. The ...

"Klaus has been integral to building trust with society by solving our legacy compliance topics and putting an ethics, risk and compliance system in place, which is regarded highly internally and externally. The impact he has had on our company, our people and our reputation will be long-lasting," said Vas Narasimhan, CEO of Novartis. "I want to thank Klaus for his extraordinary leadership since he joined the company and ECN and wish him the very best as he pursues his next chapter. I have confidence that K ...

Core Viewpoint - The FDA has approved Novartis' Pluvicto® for earlier use in patients with PSMA-positive metastatic castration-resistant prostate cancer (mCRPC), significantly expanding the eligible patient population and offering a new treatment option before chemotherapy [2][4][8]. Summary by Sections Approval and Indication Expansion - Pluvicto® is now approved for patients with PSMA-positive mCRPC who have been treated with an androgen receptor pathway inhibitor (ARPI) and are suitable for delaying chemotherapy, effectively tripling the number of eligible patients [2][3][7]. Clinical Trial Results - The Phase III PSMAfore trial demonstrated that Pluvicto reduced the risk of radiographic progression or death by 59% (HR=0.41; p<0.0001) compared to a change in ARPI, and it more than doubled the median radiographic progression-free survival (11.6 months vs. 5.6 months) [3][7]. - The overall survival analysis favored Pluvicto with a hazard ratio of 0.91, but was not statistically significant due to a high crossover rate from the control arm [4][6]. Safety Profile - Pluvicto exhibited a favorable safety profile, with most adverse events being Grade 1-2, including dry mouth (61%), fatigue (53%), nausea (32%), and constipation (22%) [5][6]. Market Impact and Patient Access - The expanded indication allows for earlier use of Pluvicto, addressing the need for effective therapies as nearly half of mCRPC patients do not live long enough to receive a second treatment [7][8]. - Novartis has established multiple RLT manufacturing facilities in the US to meet supply needs and ensure prompt delivery of Pluvicto to treatment sites [7][9]. Commitment to Education and Support - Novartis has launched the RLT Institute to educate healthcare providers on integrating radioligand therapy into clinical practice, ensuring safe administration and patient access [10][12]. - The company offers patient support services to assist with treatment initiation and insurance coverage [11][12].

Core Insights - The medical sector is increasingly adopting artificial intelligence (AI) for drug synthesis, precise measurement, and faster diagnosis [1] - AI applications in healthcare are enhancing diagnostics, treatment, and operational efficiency, with a projected market value of $95.65 billion by 2025 [4] AI Applications in Healthcare - Generative AI and surgical robotics are being utilized in diagnostic settings to detect image abnormalities that may be missed by human eyes [2] - AI is also improving electronic health records, predictive analytics, and real-time alerting systems [2] Focus on Healthcare Giants - Five healthcare companies are highlighted for their extensive AI applications: Medtronic plc (MDT), Eli Lilly and Co. (LLY), Boston Scientific Corp. (BSX), Novartis AG (NVS), and Abbott Laboratories (ABT) [3][6] Company-Specific Insights Medtronic plc (MDT) - MDT is integrating AI into surgical systems and has developed an AI-powered surgical video management platform [8] - The GI Genius project enhances colorectal cancer detection, increasing survivability by identifying polyps [9] - Expected revenue and earnings growth rates for MDT are 3.4% and 5%, respectively [11] Eli Lilly and Co. (LLY) - LLY focuses on cardiometabolic health, neuroscience, oncology, and immunology, with a strong portfolio in diabetes treatment [12][13] - The company collaborates with OpenAI and invested $409 million in Genetic Leap for AI-driven drug discovery [14] - Expected revenue and earnings growth rates for LLY are 33% and 80.7%, respectively [15] Boston Scientific Corp. (BSX) - BSX is investing in AI-driven health IT solutions to enhance healthcare delivery and clinical outcomes [16] - The company is also focusing on AI-enhanced medical education tools and patient engagement solutions [17] - Expected revenue and earnings growth rates for BSX are 13.8% and 13.6%, respectively [18] Novartis AG (NVS) - NVS is applying AI in generative chemistry, AE brain, and AI nurse applications to innovate patient technologies [19][20] - Expected revenue and earnings growth rates for NVS are 4.1% and 8.5%, respectively [21] Abbott Laboratories (ABT) - ABT utilizes AI for advanced medical imaging and predictive algorithms for heart attack prevention [22] - The company holds a strong position in point-of-care testing across various healthcare areas [23] - Expected revenue and earnings growth rates for ABT are 5.7% and 10.3%, respectively [23]

Core Insights - Novartis (NVS) received FDA approval for Fabhalta (iptacopan) for treating adults with C3 glomerulopathy (C3G), marking it as the first and only approved treatment for this rare kidney disease [1][6] - The approval is supported by data from the phase III APPEAR-C3G study, which demonstrated significant proteinuria reduction in patients [2][3] - Novartis shares have increased by 20.3% over the past year, contrasting with a 2% decline in the large-cap pharmaceutical industry [2][6] Drug Development and Market Performance - Fabhalta is an oral Factor B inhibitor, and prior to this approval, patients relied on supportive care and immunosuppression for C3G [2] - The APPEAR-C3G study showed clinically meaningful proteinuria reduction as early as 14 days and sustained at 12 months [3] - Fabhalta also received approvals for other indications, including paroxysmal nocturnal hemoglobinuria (PNH) and primary IgA nephropathy (IgAN) [4][5] Financial Performance and Future Outlook - Novartis reported fourth-quarter 2024 results that exceeded expectations, with net sales projected to grow in the mid to high single digits for 2025 [9] - The company is focusing on label expansions of existing drugs to counteract generic competition and is pursuing strategic acquisitions to enhance its pipeline [10][11] - An acquisition of Anthos Therapeutics for $925 million upfront, with potential additional payments of up to $2.15 billion, is expected to strengthen Novartis' position in the market [12] Pipeline and Strategic Initiatives - Novartis is advancing late-stage development of additional therapies for IgAN, including atrasentan and zigakibart [8] - The company is evaluating Fabhalta for a range of rare kidney diseases, indicating a broad strategy to address unmet medical needs [7]

Core Insights - Novartis announced FDA approval for oral Fabhalta® (iptacopan) as the first and only treatment for adults with C3 glomerulopathy (C3G) to reduce proteinuria [1][4][9] Company Developments - Fabhalta is the only oral inhibitor targeting the alternative complement pathway, believed to address the underlying cause of C3G, which previously had no approved treatments [2][8] - The approval is seen as a historic milestone for the C3G community, providing a potential new standard of care [2][3] - Novartis has received multiple approvals for Fabhalta, including for primary immunoglobulin A nephropathy (IgAN) and paroxysmal nocturnal hemoglobinuria (PNH) [9][10] Clinical Study Results - The Phase III APPEAR-C3G study demonstrated that Fabhalta significantly reduced proteinuria, with effects observable as early as 14 days and sustained over 12 months [4][5] - The study included a 6-month randomized, double-blind treatment period followed by a 6-month open-label period where all participants received Fabhalta [4][11] Market Context - C3G is an ultra-rare kidney disease, typically diagnosed in young adults, with a poor prognosis where approximately 50% progress to kidney failure within 10 years [3][12] - The average age of diagnosis is around 23 years, highlighting the urgent need for effective treatments in this demographic [3][12] Safety Profile - Fabhalta exhibited a favorable safety profile with no new safety signals identified; common adverse reactions included nasopharyngitis and viral infections [6][8] - The treatment is available only through a Risk Evaluation and Mitigation Strategy (REMS) due to the risk of serious infections [6][17] Future Directions - Novartis is advancing additional therapies for kidney diseases, including atrasentan and zigakibart, targeting conditions with high unmet needs [10][23] - The company aims to transform care in kidney health by addressing the underlying causes of diseases and improving patient outcomes [23]

Core Insights - Novartis has received FDA approval for oral Fabhalta® (iptacopan), marking it as the first and only treatment for C3 glomerulopathy (C3G) [2][3][10] - The approval is seen as a historic milestone for the C3G community, providing a therapy that targets the underlying cause of the disease [3][4] - Fabhalta is an oral inhibitor of the alternative complement pathway, which was previously not available for C3G patients who relied on supportive care and immunosuppression [3][10] Company Developments - The pivotal Phase III APPEAR-C3G study demonstrated that Fabhalta significantly reduced proteinuria, with effects observable as early as 14 days and sustained over 12 months [5][6][10] - The safety profile of Fabhalta was favorable, with common adverse reactions including nasopharyngitis and viral infections, and it is available through a Risk Evaluation and Mitigation Strategy (REMS) [7][10] - This approval is the third for Fabhalta, following its previous approvals for primary immunoglobulin A nephropathy (IgAN) and paroxysmal nocturnal hemoglobinuria (PNH) [11][10] Industry Context - C3G is an ultra-rare kidney disease, typically diagnosed in young adults, with a poor prognosis where approximately 50% of patients progress to kidney failure within 10 years [4][10] - Novartis aims to transform care in kidney diseases, focusing on conditions with significant unmet needs and developing treatments that target the underlying causes of these diseases [16][10] - The company is also advancing other therapies for kidney diseases, including atrasentan and zigakibart, which are in late-stage development [12][10]

Core Insights - Novartis reported positive safety and efficacy results from phase III studies of investigational gene therapy OAV101 IT for spinal muscular atrophy (SMA) in patients aged 2 to under 18 years [1][5] Study Results - In the phase III STEER study, OAV101 IT showed a statistically significant 2.39-point improvement on the Hammersmith Functional Motor Scale Expanded (HFMSE) compared to a 0.51-point increase in the sham control group, indicating better motor function [2][7] - The phase IIIb STRENGTH study demonstrated stabilization of motor function over 52 weeks in patients who had previously discontinued treatment with Spinraza or Evrysdi [3] Market Performance - Year to date, Novartis shares have increased by 14.6%, outperforming the industry growth of 7.2% [4] Regulatory Plans - Based on the success of the studies, Novartis plans to file for regulatory approval of OAV101 IT in multiple regions in the first half of 2025 [9] Additional Studies - OAV101 IT was also evaluated in a phase I/II STRONG study, which included approximately 170 patients with SMA and followed up for up to 6.4 years [8]

Investment Rating - The investment rating for the pharmaceutical industry is "Outperform the Market" (maintained) [1] Core Insights - The main growth driver remains the launch of innovative products, particularly in the GLP-1 category, with significant revenue increases reported by companies like Eli Lilly and Novo Nordisk [3] - The report highlights the strong performance of key products across various therapeutic areas, including oncology, metabolism, and immunology, with notable sales growth percentages [3] Summary by Sections 01 Overview of Overseas Pharmaceutical Companies Q4 2024 and Annual Performance - Eli Lilly's revenue increased by 32% in 2024, driven by GLP-1 products [3] - Novo Nordisk's sales reached approximately $40.5 billion, a 25% increase, with significant contributions from GLP-1 products [29] - AstraZeneca and Merck also reported strong growth, with revenue increases of 21% and 10% respectively [3] 02 Performance Review of Overseas Pharmaceutical Companies - Eli Lilly's Q4 sales reached $13.5 billion, a 45% increase, with GLP-1 products contributing significantly [18] - Novo Nordisk's GLP-1 products achieved sales of approximately $22.5 billion, with a 20% increase in the diabetes segment [29] - JNJ's pharmaceutical segment reported $14.3 billion in Q4, with oncology products driving growth [40] R&D Investment - The top 15 pharmaceutical companies invested over $150 billion in R&D in 2024, a 7% increase year-on-year, with a research expense ratio of 21.8% [8] Sales Performance in China - Seven overseas pharmaceutical companies reported combined sales of approximately 515 billion RMB in Q4 2024, with a year-on-year growth of 10% [14]

Core Viewpoint - Novartis has received a positive opinion from the CHMP for the label expansion of Fabhalta, an oral Factor B inhibitor, for treating adults with C3 glomerulopathy, a rare kidney disease with no current approved treatments [1][2]. Group 1: Fabhalta's Approval and Clinical Data - The European Commission is expected to make a final decision on Fabhalta's marketing authorization in two months [2]. - The CHMP's recommendation is based on data from the APPEAR-C3G study, which demonstrated a 35.1% reduction in proteinuria in patients treated with Fabhalta compared to placebo [2]. Group 2: Market Position and Financial Performance - If approved, Fabhalta will be the only drug targeting the underlying cause of C3G [3]. - Novartis shares have increased by 6% over the past year, outperforming the industry average of 1.3% [3]. Group 3: Sales and Future Prospects - Fabhalta generated $57 million in sales in Q4, driven by growth in PNH and IgA nephropathy treatments [4]. - The drug is under review in the U.S. for C3G, with the FDA granting Priority Review status [5]. Group 4: Pipeline and Strategic Acquisitions - Novartis reported better-than-expected Q4 2024 results, with net sales projected to grow in the mid to high single digits in 2025 [6]. - The company is focusing on label expansions and strategic acquisitions to enhance its pipeline, including the acquisition of Anthos Therapeutics for $925 million, with potential additional payments of up to $2.15 billion [8][9]. Group 5: Recent Acquisitions - In 2024, Novartis acquired MorphoSys AG, adding late-stage and early-stage candidates to its pipeline [10].