Q4 2020 Novartis AG Earnings Call

[music].

Operator: Good morning and good afternoon, and welcome to the Novartis Q4 and full year 2020 results release conference call and live audio webcast. Please note that during the presentation, all participants will be in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions by pressing star and one at any time during the conference. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. Should anyone need assistance during the conference call, they may signal the operator by pressing star and one. With that, I would like to hand over to Mr. Sameer Shah, Global Head of Investor Relations. Please go ahead, sir.

Good morning, and good afternoon, and welcome to the Novartis Q4, and full year 'twenty and 'twenty results release conference call and live audio webcast. Please note that during the presentation. All participants will be in a listen only mode and the conference is being recorded after the presentation there'll be an opportunity to ask.

And by pressing star and one at any time, joining the conference a recording of the conference call, including the Q&A session will be available on our website. Shortly after the call and should anyone need assistance during the conference call and they may signal the off price up by pressing star and one with that I would like to time Davidson Mr.

<unk> Shah Global head of Investor Relations. Please go ahead Sir.

Operator: Thank you very much, and good morning and good afternoon to everybody, and thank you for taking the time to join us for this Q4 and four-year results presentation. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors. These may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements. Please refer to the Company's Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors, and thank you again for joining us. I'll hand over to Vasant Narasimhan.

And good morning, and good afternoon terrorism and.

Thank you for taking the time to join and some of its Q4 for the repos presentation.

The information presented today contains forward looking statements that involve known and unknown risks and factors and other factors. These may cause actual results to be materially different from any future results performance or achievements expressed or implied by such statements. Please refer to the company's.

Form 20-F on file with the U S Securities and Exchange Commission for a description of some of the work.

And thank you again for joining us and I'll hand across to the season.

Samir Shah: Thank you, Samir. And I also wanted to say thank you all for joining today's conference call. If we move to slide three, with me today are a number of my ECN colleagues, Harry, Susanna, Murray Frantz, John Tsai, Richard, and Shannon. And we'll be available to take your questions and also will be joining me for parts of the presentation.

And.

Thank you Samir and I also wanted to say thank you all for joining today's conference call. If we move to slide three with me today I have a number of my and <unk>.

Colleagues, Harry Susanna and Marie France.

And so Richard and Shannon and.

And we will be available to take your questions and also will be joining me for parts of the presentation.

Vasant Narasimhan: So if we move to slide five, over the past three years, we've been executing on a strategy we set out in 2018. To focus the company, focus on certain geographies to accelerate our growth, and focus on five strategic priorities that we remain committed to and believe, in the long run, will enable Novartis to sustainably grow and sustainably have an impact on health care around the world and deliver on our purpose to reimagine medicine. Now, when you look at some of the proof points, as we've set out on this journey, we believe we're making good progress. There is always more to do, and there are always things to learn, but we're making good progress. We're 100% focused now as a medicines company. We have a leading pipeline across 10 therapeutic areas, four advanced therapy platforms, and are unique in that we have only 8% of our sales in one product and over 15 blockbusters.

So if we move to slide five over the past three years, we've been executing on the strategy. We set out in 2018 to focus the company focus on certain geographies to accelerate our growth and to focus on five strategic priorities, we remain committed to and believes and the long run well enabled and novartis.

To sustainably grow and sustainably have impact on health care around the world and deliver on our purpose to re imagine medicine and then.

When you look at some of the proof points as we've set out on this journey and we believe we're making good progress always more to do always things to learn but we're making good progress. We're 100% focused now as of the medicines company. We are of leading pipeline across 10 therapeutic areas for advanced therapy platforms are unique and that having only 8%.

Of our sales and one product and over 15 blockbusters, we've achieved $2 billion and cost savings over the last three years of leading data science platform, that's enabling us to weather. This pandemic and I believe sets us up for the medium and long term consistently improving ESG scores now with sector leading performance of.

Vasant Narasimhan: team.

Vasant Narasimhan: Next slide. So ESG has achieved $2 billion in cost savings over the last three years, a leading data science platform that's enabling us to weather this pandemic, and I believe sets us up for the medium and long term. Consistently improving ESG scores, now with sector-leading performance for key indices. And from a culture standpoint, record high engagement scores across multiple different measures.

The four key indices and from a culture standpoint record high engagement scores across multiple different measures.

Vasant Narasimhan: Now moving to slide six, when you look at how the strategy is translated into operations, we see solid operational performance over the past three years with sales growing 5% from $42 billion now to approaching $49 billion, and core op-ink growing double digits at 10% exceeding now $15 billion. And we've reached our goal, our initial goal of Innovative Medicine's core margin to 35% on our way to our midterm goal of the high 30s, which we are well on track to achieve. Now, turning to this year's performance, sorry, the 2020 performance and Q4 performance, on slide seven, you can see a breakdown of some of the key drivers. As you saw in our release, net sales for the full year were up 3%, and core operating income was up 13%.

Now moving to slide six when you look at how the strategy has translated into the operational performance, we see solid operational performance over the past three years with sales growing 5% from 42 billion out of approaching $49 billion core op and growing double digit at 10% exceeding the $15 billion and we've reached our.

And our initial goal of innovative medicines core margin to 35% on our way to our midterm goal of the high thirties.

We are well on track to achieve.

Now turning to this year's performed sorry of the 2020 performance in Q4 performance on slide seven you can see of breakdown some of the key drivers as you saw and our release net sales for the full year were up 3% and core operating income up 13%. Our overall performance in Q4 as well as the full year were driven by our key group.

Vasant Narasimhan: Our overall performance in Q4, as well as the full year, was driven by our key growth drivers in Tresto and Synthetix, continuing to demonstrate double-digit growth, and a broad range of oncology medicines also demonstrating double-digit growth. And taken together, we now have over half of our sales coming from our key growth drivers and launches in innovative medicines, positioning us well for the future and positioning us well to overcome the patent expiries we have in this period and continue to drive growth through 2025 and beyond. Now moving to slide eight.

The drivers of Entresto and because the big continuing.

Continuing to demonstrate double digit growth a broad range of oncology medicines also demonstrating double digit growth and taken together, we now have over half of our sales coming from our key growth drivers and launches and the innovative medicines and positioning us well for the future and positioning us well to overcome.

The patent Expiries, we have and this period and continue to drive growth through 2025 and beyond.

Now moving to slide eight.

Vasant Narasimhan: I wanted to dive into a few of the products in Sandoz before turning it over to my colleagues. First, Zolgensma, full year sales were $920 million in the first full year since launch. The medicine is now registered in 37 countries. We're making very good progress in the rollout of this medicine around the world. As you saw in Q4, we had sales of $254 million, which were lower than Q3.

I wanted to dive into a few of the products and sandoz before turning it over to my colleagues.

First on Xeljanz My full year sales were $920 million and the first full year since launch and the medicine is now registered and.

37 countries, we're making very good progress and the rollout of this medicine around the world as you saw in Q4, we had sales of $254 million, which were lower than Q3. This was driven primarily by COVID-19 related impact of delaying new starts of hospitals face disruption.

Vasant Narasimhan: And this was driven primarily by COVID-19-related impact, delaying new starts as hospitals face disruption. And we saw physicians delaying starts or switching to the product, as well as delays in reimbursement decisions in some of the European and emerging markets we're currently working with. We expect this impact to continue through the first half of 2021, where we would expect sales in that Q3, Q4 range before an acceleration in the second half of the year. But we remain confident in the longer-term potential of the medicine in the IV form to reach ultimately $2 billion. It remains the treatment of choice for newly diagnosed patients. We're seeing about 15 percent of patients in the EU in the older than two-year age range.

And we saw physicians delaying starts or switches to the products.

As well as delays and reimbursement decisions and some of the European and emerging markets. We're currently working with we expect the impact to continue through the first half of 2021, we would expect sales in the Q3 Q4 range before and acceleration in the second half of the year, but we remain confident and the longer term potential of.

The medicine in the IV form to reach ultimately $2 billion and remains the treatment of choice for newly diagnosed patients we're seeing about 15% of patients in the EU and the older than two of your age range. We're on our way to get access and nine EU countries, which would be about 25% of the population.

And we have important formal reimbursement decisions in 15 countries over the coming year to two years. So taken together, we think we're on the right track. When you look at the I T program, we continue to await the animal data, which we expect to have and the middle of this year to the back half of this year's old remove the.

Vasant Narasimhan: We're on our way to getting access in nine EU countries, which would be about 25 percent of the population, and we have important formal reimbursement decisions in 15 countries over the coming year to two years. So taken together, we think we're on the right track. When you look at the IT program, we continue to await animal data, which we expect to have in the middle of this year or in the back half of this year. Remove the partial clinical hold if the data confirms the safety profile.

A partial clinical hold if the data is.

Confirms the safety profile, we are working with the FDA to finalize the design of a pivotal confirmatory study, which we would then rapidly plan on implementing we continue to progress. Our 10 early stage portfolio of programs in gene therapies with two <unk> and clinical trial starts planned in 2021.

Now moving to slide nine.

I also wanted to say a word regarding our performance in China now as you saw and in our release we were.

Really pleased with our growth in China with sales growing 16% second fastest amongst multinationals in China. Our goal is to double our sales and the country by 2020 for making China, the second largest market for the.

Novartis and the World are key growth drivers similar to what we've seen in other geographies of our entresto because of some Texas as well as sort of other oncology strategic balance what's very notable I think is the number of NR Dl listings, we achieved we believe the highest and the industry in 2020.

Vasant Narasimhan: We are working with the FDA to finalize the design of a pivotal confirmatory study, which we then rapidly plan on implementing. We continue to progress our 10 early stage portfolio programs in gene therapies with two INDs and clinical trial starts planned in 2021. Now, we're moving to slide nine.

We also have a rich pipeline with seven approvals as expected in 2021. So taken together, we think we're on the right track to reach our goals and China and really continuing to drive dynamic growth of this important market.

And moving to slide 10.

With respect of Sandoz, you saw and the full year of Sandoz matter of the sales guidance largely in line for the full year and the quarter Importantly, Sandoz was able to drive 15% core operating income growth and moving as core margin up to 24, 2% and some of the pushes and pulls for Sandoz a continued strong biopharmaceutical has performed.

Vasant Narasimhan: I also wanted to say a word regarding our performance in China. Now, as you saw in our release, we were very pleased with our growth in China, with sales growing 16%, the second fastest amongst multinationals in China. Our goal is to double our sales in the country by 2024, making China the second largest market for Novartis in the world. Our key growth drivers, similar to what we've seen in other geographies, are Entresto, Cosentex, as well as our other oncology strategic variants. What's very notable, I think, is the number of NRDL listings we achieved. We believe it will be the highest in the industry in 2020.

<unk> of 19% growth primarily in the European market, but also held back a bit by our retail the retail declines we saw driven by COVID-19, and the U S. Oral solids business that we know and retain I think taking a longer term view on sandoz, we remain determined to build a business that can grow mid.

Double digit with margins and the mid to high 20 is a really competitive with the top end of the peer set and we expect to be able to do that through a robust biosimilar pipeline as well as high and low coverage amongst small molecule through the 2024 period.

Vasant Narasimhan: We also have a rich pipeline with seven approvals expected in 2021. So, taken together, we think we're on the right track to reach our goals in China and really continue to drive dynamic growth. We're moving to slide 10. With respect to Sandoz, you saw that for the full year, Sandoz met its sales guidance largely in line for the full year and the quarter. Importantly, Sandoz was able to drive 15 percent core operating income growth, moving its core margin up to 24.2 percent.

Now moving to slide 11.

I did want to say a word about the company's efforts to overcome the COVID-19 challenges, we see and the marketplace Harry will talk a little bit more about our guidance, but certainly when you look at the health care systems performance over the back half of last year, we continued to see a situation where health care systems didn't return.

Fully to their pre pandemic levels here on the left hand side of the chart you see two examples and dermatology, we continue to see of patient visits and <unk> below the pre pandemic levels and the bottom you can see and the oncology market depending on the cancer setting you have of biopsy and surgery rates below pre pandemic levels also of the <unk>.

Vasant Narasimhan: Some of the pushes and pulls for Sandoz continued strong biopharmaceutical performance of 19 percent growth, primarily in the European markets, but also held back a bit by our retail retail declines we saw driven by COVID-19 and the U.S. oral solids business that we now retain. I think taking a longer term view on Sandoz, we remain determined to build a business that can grow mid single digits with margins in the mid to high 20s, really competitive with the top end of the peer set. And we expect to be able to do that through a robust biosimilar pipeline, as well as high LOE coverage amongst small molecules through the 2024 period. Now moving to slide 11.

D K four six market.

So for the first half of the 2020 of 2021, we expect to continue to see a.

Challenges for the certain therapeutic areas, such as dermatology and ophthalmology as well as of the Sandoz retail we expect that some of our new launches will be impacted though we expect to continue to see solid progress and you'll hear more about that from very front and on preparing for these launches to accelerate and the back half of the year such as consumed and.

Nathan and we also know products that involve hospital initiation, such as Kim Ryan alluded, there and the old Gen will face a tougher situation and the first part of the year again, we would plan to overcome that and this period and then hopefully if the acceleration and the second half of the year.

Vasant Narasimhan: I did want to say a word about the company's efforts to overcome the COVID-19 challenges we see in the marketplace. Harry will talk a little bit more about our guidance, but certainly, when you look at the health care systems' performance over the back half of last year, we continue to see a situation where health care systems didn't return fully to their pre-pandemic levels. Here on the left side of the chart, you see two examples in dermatology.

Now moving to slide 12.

The turning to our innovation performance and innovation milestones in Q4, we saw the approval of <unk> in the EU six months ahead of schedule and you saw the positive FDA AD com for Entresto and preserved ejection fraction heart failure as well as and the number of other notable achievements of number of designation.

The cheaper of Taco Pan and Legalism map I think demonstrating the potential of these medicines as they continue to progress and late stage development. We also signed an important and licensing deal and to lose the mab with Beijing and for anti PD, one, which we hope will be able to file later this year and the U S and the other mark.

Vasant Narasimhan: We continue to see patient visits and NBRX below pre-pandemic levels. On the bottom, you can see in the oncology markets, depending on the cancer setting, you have biopsy and surgery rates below pre-pandemic levels, including the CDK4-6 market. So for the first half of 2021, we expect to continue to see challenges for certain therapeutic areas, such as dermatology and ophthalmology, as well as for Sandos retail. We expect that some of our new launches will be impacted, though we expect to continue to see solid progress, and you'll hear more about that from Mary Frantz on preparing for these launches to accelerate in the back half of the year, such as Kesimpt And we also know products that involve hospital initiation, such as Kimriah, Lutathera, and Zolgensma, will face a tougher situation in the first part of the year. Again, we would plan to overcome that during this period and then hopefully see acceleration in the second half of the year. Now moving to slide 12.

I also wanted to say a word as I know there've been a number of questions on <unk> and an update on the CFO now first and foremost it's important to note that there are no safety or efficacy or product related concerns with respect to LIFO and the CRO the as.

As I mentioned the EU fully approved of this product out of the same facilities that we also filed for the U S. FDA. The <unk> was related to facility inspection related conditions, primarily related to the documentation and controls certain control systems out of third party manufacturer in Europe, We expect based on the third.

He is readiness to complete the request made by FDA to be able to submit the.

The documentation and.

Other request of FDA and the Q2 Q3 time periods and we still do not know if the FDA will ultimately want to inspect this facility as it is.

Noted previously the FDA had originally and plan to inspect the facility in May of 2020. They are currently not conducting overseas and inspections and situations like this and we'll continue to have to work with the FDA to try to expedite that inspection and we are concurrently working on the tech transfer to add or our own novartis facility and <unk>.

And now for the production supply chain of of IPO.

Vasant Narasimhan: Returning to our innovation performance and innovation milestones in Q4, we saw the approval of Lecvio in the EU six months ahead of schedule. We saw the positive FDA adcom for Entresto and preserved ejection fraction heart failure, as well as a number of other notable achievements. A number of designations achieved for Eptaclopan and Ligalizumab, I think demonstrating the potential of these medicines as they continue to progress in late stage We also signed an important in-licensing deal on Ticilizumab with Beijing for anti-PD-1, which we hope we'll be able to file later this year in the US and other markets. I also wanted to say a word, as I know there have been a number of questions on Lecvio and an update on the CRL.

So we remain confident we will get this product approved as fast as possible and then continue our plans to launch this medicine, which and a highly effective way, which Marie France will go through and a bit more detail in the moment.

Now moving to slide 13, the other innovation milestones that we expect for 2021 multiple major approvals Simpson and the EU entresto.

Half path for an expanded indication for Entresto a number of major submissions you can see listed here including of <unk>.

Now we are also a range of major readouts, which would enable submissions in 2021, notably kind of kitimat sabotage the mab NPG core of five three and loopy SMA amongst others.

Also we will hope to see the readouts of legal lose the mab and Concentrix, which would enable submissions in 2022 and I also wanted to say a word on our next wave of assets, which you can see on slide 14.

Vasant Narasimhan: Now, first and foremost, it's important to note that there are no safety, efficacy, or product-related concerns with respect to Lecvio in the CRL. As I mentioned, the EU fully approved this product out of the same facilities that we also filed for the US FDA. The CRL was related to facility inspection-related conditions, primarily related to documentation and controls, and certain control systems at a third-party manufacturer in Europe.

Here, we lay out the five lifecycle management programs by pharmaceutical programs five oncology programs and five wildcard.

Delighted and our meet the management meetings and in many of these programs. We have milestones expected in 2021 and you can also see the milestone chart in the appendix of this document and I'll note. A few we expect the Paradise. The post of my trial to readout and the first half of 2021, I already mentioned percentage and the hydride at Natus Super It's Eva.

Vasant Narasimhan: We expect, based on the third party's readiness to complete the request made by FDA, to be able to submit the documentation and other requests by FDA in the Q2, Q3 time period. However, we still do not know if the FDA will ultimately want to inspect this facility. As noted previously, the FDA had originally planned to inspect this facility in May of 2020. However, they're currently not conducting overseas inspections in situations like this, so we'll continue to have to work with the FDA to try to expedite that inspection.

And the Kiss Golly, Mona Lisa to OS and the second half of 'twenty. One we will see important mid stage readouts for the type of upon and the Iga nephropathy and <unk>, we will see also and important phase <unk> start for Brian and plan and the Huntington's disease, and then of course the range of oncology.

The milestones as well across the oncology various oncology molecules and important to note and all of these projects. We have full teams working to accelerate the I've been working as fast as possible to maintain their progress through the pandemic and beyond particularly were looking forward to continuing to advance our ship two inhibitor NRC RAF inhibitor as well.

Vasant Narasimhan: And we're concurrently working on a tech transfer to add our own Novartis facility in Shafton now for the production supply chain of Lecvio. So we remain confident we will get this product approved as fast as possible and then continue our plans to launch this medicine in a highly effective way, which Mary France will go through in a bit more detail in a moment. Now moving to slide 13, other innovation milestones that we expect for 2021. Multiple major approvals, Cosimta in the EU, Entresto, a half-pass for an expanded indication for Entresto, and a number of major submissions, you can see listed here, including Asiminib in CML.

And the oncology portfolio.

So all of that gives you an overview of our story of the low mid and long term sort of and most importantly, but also of our story and Q4 and for 2021 and with that I'll hand, it over to marathons marathons.

Thank you Bob so.

So going on to slide 16.

And good afternoon, and pleased to update you on the 'twenty and 'twenty performance of finite and grew 5% year over year, and a challenging environment and our growth drivers cause conference and Entresto showed continued momentum and now account for $6 5 billion and revenues.

But the story of that stands out here of the shifts that you see and our portfolio and the contribution from growth drivers and launches and one from 33% to 43% and that demonstrates our replacement power and light and several patent expiries and expected.

Vasant Narasimhan: We also have a range of major readouts that would enable submissions in 2021, notably Canakinimab, Sabotolimab, MBG453, and LuPSMA, amongst others. We also will hope to see the readouts of Ligaluzumab and Cosentix, which would enable submissions in 2022. And I also wanted to say a word on our next wave of assets, which you can see on slide 14. Here we lay out the five lifecycle management programs, five pharmaceutical programs, five oncology programs, and five wildcards we highlighted in our Meet the Management meetings. And in many of these programs, we have milestones expected in 2021. You can also see the milestone chart in the appendix of this document. I'll note just a few.

We're delivering strong operational performance and the end market growth drivers. We also made progress and the next wave of potential launches for <unk>.

And the basis for growth in 'twenty, and 'twenty, one and beyond.

Slide 17.

Once again cause context delivered double digit growth and reached $4 billion for the full year.

Our focus is on continuing to compete strongly to maintain our position and dermatology and accelerate and rheumatology.

Now what we need to do to growth we need to make sure we maintain broad access and balance that was the long term value of context, and you can expect us to continue to do that.

Well the expand into new geographies and in fact, we're now the only innovative biologic with broad and RJR listing in China.

And we will make sure that we're competitive and the marketplace with our industry, leading approach to data and and presence as well as the number of new indications as we deliver on our ambitious lifecycle management program.

And there are still tremendous opportunity and this market and between the day that the access and our outstanding team. We have what it takes for kind of sounds like the continue to grow.

Vasant Narasimhan: We expect the PARADISE post-DEMI trial to read out in the first half of 2021. I have already mentioned cosensics and hydroadenitis superativa, the Kisgali-Mona Lisa 2-OS in the second half of 2021. We'll see important mid-stage readouts for eptaclopan in IgA nephropathy and C3G. We'll also see an important phase 2b start for branoplam in Huntington's disease. And then, of course, the range of oncology milestones as well across the various oncology molecules. Important to note that in all of these projects, we have full teams working to accelerate them and working as fast as possible to maintain their progress through the pandemic and beyond. In particular, we're looking forward to continuing to advance our SHIP2 inhibitor and our C-RAF inhibitor as well in the oncology portfolio. So I hope that gives you an overview of our story, our mid and long-term story, most importantly, but also our story in Q4 and for 2021. And with that, I'll hand it over to Mary Franz. Mary Franz.

On slide 18.

And trust and continues to deliver 44% total year of growth and the momentum continues across all of the geographies.

As you know we're the only single use medicine proven to be superior to previous standard of care and that's the wireless strong competitive position.

It's also great to see that the American College of Cardiology expert consensus now recommends that heart failure patients.

And the army and this puts entresto and the pole position for the 75% of patients who are still on center.

Standard.

Hi, previous standard of care.

We also have exciting opportunities for growth with expansion in China, and Japan as well as our lifecycle management program for past or preserved ejection fraction and post the IMI.

If we move to the next slide.

The kind of discussion for past reinforce the unmet need as well as interest of value in the treatment of preserved ejection fraction.

And specifically in patients with the ejection fraction below normal.

Ultimately the addressable patient pool will depend on the label.

What I can tell you is that the total patch population of about $3 million and the U S.

And about 2 million of them have an ejection fraction below normal.

We know from our deep experience and rash that guidelines matter and this market. So our update will be gradual as the guidelines evolve.

Mary Franz: Thank you, Vas. So, going on to slide 16. Good morning, good afternoon, and I'm pleased to update you on the 2020 performance for pharma. We grew 5% year over year in a challenging environment, and our growth drivers, Cosentix and Entresto, showed continued momentum and now account for $6.5 billion in revenue. But the story that stands out here is the shift that you see in our portfolio. The contribution from growth drivers and launches went from 33 to 43 percent.

Overall, we're very comfortable with interest of peak consensus and we're confident that interest is going to continue on its impressive growth trajectory.

If we move to slide 20.

And ontic of sinter.

We've said we have high expectations for this product.

Our team is executing very effectively on the launch in fact, we have beat all of our plans on gaining assets.

We're seeing broad adoption, we have leading share of attention on boarding as fast and the initiation of simple.

Mary Franz: And that demonstrates our replacement power in light of several patent expiries expected. We're delivering strong operational performance in the in-market growth drivers. We have also made progress in the next wave of potential launches, providing the basis for growth in 2021 and beyond. 517.

But we do feel that it is more challenging to launch during the pandemic.

We cannot move as fast as we would like due to the limited face to face access to physicians and what we're also seeing is a hesitancy to switch as physicians and patients preferring to wait.

But this does not change of our ambition for this product.

The b cell therapies have the potential to account to up to 40% of market share and in that and we're positioning of FEMSA as of first choice TMT and we relentlessly track for the highest customer satisfaction.

Mary Franz: Once again, Cosentix delivered double-digit growth and reached $4 billion for the full year. Our focus is on continuing to compete strongly to maintain our position in dermatology and accelerate in rheumatology. We know what we need to do to grow. We need to make sure we maintain broad access and balance that with the long-term value of Cosensics, and you can expect us to continue to do that.

We have the foundational elements in place, we are focusing on breadth and with our free drug program.

And as for out of this pandemic and we can pull our full promotional power behind the center, we won't really see and the potential of this product.

If we move on to slide 21.

Mary Franz: We'll expand into new geographies. In fact, we're now the only innovative biologic with broad NRDL listing in China. And we'll make sure that we're competitive in the marketplace with our industry-leading approach to data and presence, as well as a number of new indications as we deliver on our ambitious lifecycle management program. There is still tremendous opportunity in this market, and between the data, the access, and our outstanding teams, we have what it takes for Cosentix to continue to grow. On Slide 18, Interesto continues to deliver 44% full-year growth, and the momentum continues across all of the geographies.

We're also enthusiastically preparing for the launch of <unk>.

Lastly, I'll received EU approval in December and we expect a slow and steady start.

We also plan to rollout our first population health agreement of the U K NHS and quarter three.

And the U S. As you've heard we have of manufacturing related delay, which were working to resolve but what is important to remember is that we're thinking about this launch very differently.

<unk> is to partner with healthcare systems on and CVD management to overcome the non clinical barriers to tackling this disease that scale.

We're now using this time to advance our engagement with health care systems and the setup the needed infrastructure. So that we can be stronger out of the gate once we get the green light from FDA.

Mary Franz: As you know, we're the only single-use medicine proven to be superior to the previous standard of care, and thus, we're in a strong competitive position. It's also great to see that the American College of Cardiologists Expert Consensus now recommends that heart failure patients go direct to ARNI. And this puts Entresto in a pole position for the 75% of patients who are still on the previous standard of care. We also have exciting opportunities for growth with expansion in China and Japan, as well as our lifecycle management program for PES, or Preserved Ejection Fraction, in post-AMI. If we move to the next slide, the ADCOM discussion for PEPF reinforced the unmet need as well as the value of those values in the treatment of preserved ejection fraction, and specifically in patients with an ejection fraction below normal. Ultimately, the addressable patient pool will depend on the label. What I can tell you is that the total population is about three million in the U.S., and about two million of them have an ejection fraction below normal.

Slide 22.

2020 was definitely a year like no other.

The external environment does not stop us from doing what we're passionate about and that is bringing medicines to patients.

Our teams have worked hard and demonstrated great agility and resilience and I'm very proud of the team.

Our 2021 strategy builds on the good work done.

Number one we want to maintain the momentum on Concentrix and Entresto penetrating markets further and delivering on our lifecycle management programs.

Two executing our launches and ramping up cause center, bringing <unk> to market and restoring confidence and view of your and three getting ready for the next wave of launches.

Geographically, we have a clear focus on the U S and China, and we're putting our customers at the core of our strategy you will see us working and a much more personalized fashion with physicians.

<unk> and the investments that we've made and data and digital and with health care systems to deliver access to more patients faster.

Just the van.

Thank you Marie France, So moving to slide 24 of the oncology business had solid performance, despite significant generic erosion and COVID-19 impact delivering 3% growth and reaching $14 7 billion in Q4 of the I've seen very good momentum across our.

Mary Franz: We know from our deep experience in RUSH that guidelines matter in this market, so our update will be gradual as the guidelines evolve. Overall, we're very comfortable with Interesto's peak consensus, and we're confident that Interesto is going to continue on its impressive growth trajectory. Now, we move to slide 20, and on to Cassandra.

Petroleum, mainly driven by the strong uptake of our recent launches and continued strong performance of our growth drivers and these brands could also more than compensate for the continued generic erosion of a fan of tour and ex shape shape in the U S and send the state and they are in the EU.

Mary Franz: We've said we have high expectations for this product. Our team is executing very effectively on the launch. In fact, we have beat all of our plans for gaining access.

Due to come on that make some areas of our business as mentioned by laws like the hospital initiated therapies and specifically breast cancer therapy continue to experience delays and new patient starts as well as concerns about patient management during COVID-19.

Mary Franz: We're seeing broad adoption. We have a leading share of attention. Onboarding is fast, and initiation is simple.

Mary Franz: But we do feel that it is more challenging to launch during a pandemic. We cannot move as fast as we would like due to limited face-to-face access to physicians. And what we're also seeing is a hesitancy to switch, as physicians and patients prefer to wait.

But I have to say our team has really stepped out and be leveraged our robust digital capabilities and parked and embarked on the omni channel launches for <unk> and the U S and peak rate and the Doctor you and Europe and are very pleased that these launches continue to gain the momentum despite limited phase II.

Mary Franz: But this does not change our ambition for this product. We think that B-cell therapies have the potential to account for up to 40% of market share in MS, and we're positioning Cosimta as a first choice DMT as we relentlessly track for the highest customer satisfaction. We have the foundational elements in place. Now we're focusing on breadth. And with our free drug program, once we're out of this pandemic, and we can pull our full promotional power behind Kesenta, we will really see the potential of this product. As we move on to slide 21, we're also enthusiastically preparing for the launch of Lexio. LECVIO received EU approval in December, and we expect a slow and steady start. We also plan to roll out our first population health agreement with the UK NHS in Quarter 3. In the US, as you've heard, we have a manufacturing-related delay which we're working to resolve.

<unk> interactions with physicians.

Moving to slide 25, and Kiss currently.

Got it delivered a very strong performance in 2020 of its full year sales up 45%, reaching $817 million and this is driven by the unprecedented overall survival benefit from two pivotal phase III clinical trials.

Very pleased to seek as Kelly continue growing and gaining market share. Despite the overall slowdown of the CDK four six market driven by suppressed patient screening and overall decrease and new patient starts.

And the recent Congress in San Antonio, but we're very proud to share that gives colleague and demonstrated the longest median over survival. Among all of phase III trials and advanced breast cancer, reaching nearly five years of survival and premenopausal patients and Additionally, the presented the pool of data from one of.

The lease of studies that confirmed the efficacy across non luminal and extra then of therapy resistant her to enrich patient subtypes and these data confirm that the keeps colleagues ability to selectively inhibit CDK four may store endocrine sensitivity in the very.

Mary Franz: But what is important to remember is that we're thinking about this launch very differently. Our aim is to partner with healthcare systems on ASCVD management to overcome the non-clinical barriers to tackling this disease at scale. We're now using this time to advance our engagement with health care systems and to set up the needed infrastructure so that we can be stronger out of the gate once we get the green light from FDA.

Aggressive tumors.

And the development side not on the off the run study in intermediate and high risk populations is enrolling incredibly well and we are on track for final readout in 'twenty and 'twenty. Two so overall, we're very pleased with the performance of cash Carly and remain very confident and this brand moving to slide 26.

Mary Franz: 2020 was definitely a year like no other, but the external environment did not stop us from doing what we're passionate about, and that is bringing medicines to patients. Our teams have worked hard and demonstrated great agility and resilience, and I am very proud of this team. Our 2021 strategy builds on the good work done. Number one, we want to maintain the momentum on Cosensics and Entresto, penetrate markets further, and deliver on our lifecycle management programs. Two, executing our launches, ramping up Cosynta, bringing Lectio to market, and restoring confidence in BioGeo. And three, getting ready for the next wave of launches. Geographically, we have a clear focus on the US and China, and we're putting our customers at the core of our strategy. You will see us working in a much more personalized fashion with physicians, leveraging the investments that we've made in data and digital and with healthcare systems to deliver access to more patients faster. Now, over to Suzanne. Thank you.

And also Camra and <unk> had an excellent year of let's say, it's up 68% driven by strong double digit growth across all the geographies. Despite the current pandemic conditions, we continue to expand our global presence and it's now over 290 centers qualified to administer Kim.

Across 27 markets.

First of all the manufacturing for Kim Ryan has been expanded with the recent approval of SPRI and Japan and this is building on previous approvals of Stein and Lisa Li earlier in the year and demand.

And the trend can you be made also significant progress and expanding our club and manufacturing capacity and there's a 70% increase compared to previous year and we also continued to improve the robustness of our process leading to an increased manufacturing success rate on.

And the development side, we were pleased to share the new data from the law of trial showing that Kim Ryan is effective in pre agreed of patients with relapsed or refractory Follicular lymphoma submission for this important indication is expected later this year and if also presented the truly at the updated.

Susanna: Thank you, Marie-France. So moving to slide 24, the oncology business had solid performance despite significant generic erosion and COVID impact, delivering 3% growth and reaching $14.7 billion. In Q4, we have seen very good momentum across our portfolio, mainly driven by the strong uptake of our recent launches and the continued strong performance of our growth drivers. And these brands could also more than compensate for the continued generic erosion of Affinitor and XJ Chadenew in the US and Sanderstedt and LAR in the EU.

Because of you. Besides the showed continued durable responses for patients with relapsed or refractory the RPC.

And.

We also continue to invest and our car T cell therapy, and it's already two new car T assets and phase one trials being manufactured on a completely novel the car T platform and it's this technology the expect to increase manufacturing reliability and shorten the turnaround times and the price.

Novation of certainties the sub population.

The next slide.

I'd like to share of issue the exciting day Wf recently presented at Ash and assuming that our first in class and inhibitor that has the potential to transform CMO of treatment standards and.

Susanna: Due to the pandemic, some areas of our business, as mentioned by Val, like hospital-initiated therapies and specifically breast cancer therapies, continue to experience delays in new patient starts, as well as concerns about patient management during COVID. But I have to say our teams really stepped out, and we leveraged our robust digital capabilities and embarked on omni-channel launches for Tabrecta in the U.S. and PICRE and ADACRIO in Europe. We are very pleased that this launch has continued to gain momentum despite limited face-to-face interactions with physicians. Moving to slide 25 and KISCALI.

The phase III assemble the trial actually beneath the nearly doubled the major of molecular response rate at 24 weeks compared to pursuit of nib and patients to assist and two are intolerant of at least two prior take the ice.

Assuming of also demonstrated favorable safety profile underscoring that stamp inhibition reduces the off target adverse events typical for it take the ice and U S. FDA has granted fast track designation early in December and the on track with the U S and submissions and the first.

Half of 'twenty. One we also continue evaluating multiple development options, we're assuming that the early treatment lines.

And CMO and looking forward to update you in the future moving to slide 28.

Susanna: KISCALI delivered a very strong performance in 2020, with full-year sales up 45%, reaching $870 million. This is driven by the unprecedented overall survival benefit from two pivotal phase three clinical trials. We are also very pleased to see KISCALI continue growing and gaining market share despite the overall slowdown of the CDK4-6 market driven by suppressed patient screening and an overall decrease in new patient starts. At a recent conference in San Antonio, we were very proud to share that Kiskali demonstrated the longest median overall survival among all phase three trials in advanced breast cancer, reaching nearly five years of survival in premenopausal patients. Additionally, we presented pooled data from the Mona Lisa studies that confirmed efficacy across luminal and estrogen therapy resistant HER2 enriched patient subtypes, and these data confirmed that Kiskali's ability to selectively inhibit CDK4 may restore endocrine sensitivity in these very aggressive tumors.

I would like to given the outlook also on 'twenty. One we will continue to maximize our growth drivers and we expect continued growth from kids. Currently you are going to leverage the increased manufacturing capacity to drive further growth and camera.

And for a lot of fair of you plan to unlock the potential in the community setting in the U S and grow us and earlier lines the.

We expect also continued growth from our growth drivers rabalais Promacta Chuck of the and coffee.

The mechanist.

We are also committed to deliver on our launches you refer other expand pick rate and the U S and gained momentum in Europe, and we hope to continue strong and our Doctor you expanding to larger accounts and the U S and continue clothing and roll it out.

Needless price and maximize the first mover advantage of stop breakdown and the U S and we'll continue driving awareness of CML.

And the unmet need and the importance of them and hit the gas last but not least we will prepare for our next big bets New T. C. L. P. S amazed by advancing our commercial organization for the readout of mission trial. Later this year and also focus of the medical education on kind of king of them up to it.

Definitely the importance of approach humour inflammation and.

The other important for clothes for the us if the medical education on Saba total them up to bit of merit and as for the dual mechanism of action of Tim Sweeney, and Mds and AML and as Bob said, we are advancing our early assets of <unk>, five five and Alex H 254, and a broad range of combinations.

Susanna: On the development side, the Nathalie Ativan study in intermediate and high-risk populations is enrolling incredibly well, and we are on track for final readout in 2022. So overall, we are very pleased with the performance of Kiskali and remain very confident in this brand. Moving to slide 26.

Studies moving to slide.

Slide 29, just to give you an update on the recently announced two in licensed is a little up from my team. This is of late stage PD, one inhibitor, specifically engineered to minimize binding to the FC gamma receptor on macrophages it isn't.

Susanna: Also, Kymriah had an excellent year with sales up 68%, driven by strong double-digit growth across all geographies despite pandemic conditions. We continue to expand our global presence with now over 290 centers qualified to administer Chimraya across 27 markets. Commercial manufacturing for Chimraya has been expanded with the recent approval of FBRI in Japan, and this is building on previous approvals of Stein and Laser Li earlier in the year.

And my Pet's 15, potentially registration, enabling clinical trials are currently ongoing with the first ex China filing expected in 2021, mid 15, and Novartis obtains development and commercial rights on key markets ex China, including U S Europe and Japan.

It is of very attractive asset for us as we look to expand our presence in the checkpoint inhibitor space and it provides us with an opportunity to launch of PD, one sooner and broad and important indications such as lung cancer.

Susanna: In 2020, we also made significant progress in expanding our global manufacturing capacity with a 70% increase compared to the previous year. And we also continue to improve the robustness of our process, leading to an increased manufacturing success rate. On the development side, we were pleased to share new data from the ELARA trial showing that Kimriah is effective in pre-release patients with relapsed or refractory follicular lymphoma. Submission for this important indication is expected later this year. And we have also presented the Juliet updated efficacy results, which showed continued durable responses for patients with relapsed or refractory DLPCL. We also continue to invest in our CAR-T therapies, with already two new CAR-T assets in phase one trials being manufactured on a completely novel CAR-T platform. With this technology, we expect to increase manufacturing reliability, shorten the turnaround times, and preserve certain T cell subpopulations. Moving to the next slide.

We have identified also much of a potential combination opportunities with the novartis portfolio across all of our four therapeutic platforms. So we are very excited about collaborating with <unk> to bring tequila is of them up to patients around the world and we are looking forward to Friday of this more update.

After the transaction is closed later this year and with that I hand over to Harry.

Thank you Susan good.

Good morning, good afternoon, everyone and no going to walk you through some of the financials for the fourth quarter for Europe as well as provide you with our 'twenty one guidance.

Always my comments refer to the results of continuing operations and growth rates and constant currencies unless otherwise noted.

So turning to slide 31, we compare our actual results here with our 2022 latest guidance and as you know we've revised our core operating income guidance upward of October.

And I'm pleased to say that the met both cooperating income episodes guidance on sales given the resurgence of COVID-19 and quarter. Four we ended at the low end of the 3% to 4% range as we mentioned during the quarter free Investor call.

Okay.

Now slide 32.

Children and summary of the performance for quarter, four and full year, a refocus of the full year results on the right hand side.

Susanna: We'd like to share with you the exciting data we have recently presented at ASH on Asiminib, our first-in-class stamp inhibitor that has the potential to transform CML treatment standards. In the Phase 3 ASSEMBLE trial, Asiminib nearly doubled the major molecular response rate at 24 weeks compared to Bosutinib in patients resistant to or intolerant of at least two prior tracheids. Asiminib also demonstrated a favorable safety profile, underscoring that stamp inhibition reduces the off-target adverse events typical for tracheitis. The U.S. FDA granted fast-track designation early in December, and we are on track with U.S. and EU submissions in the first half of 2021. We also continue evaluating multiple development options for Asiminib in early treatment lines in CML and look forward to updating you in the future. Moving to slide 28, I would also like to give an outlook on slide 21. We will continue to maximize our growth drivers, and we expect continued growth from Kiskali. We are going to leverage the increased manufacturing capacity to drive further growth in Kymriah.

Full year performance was solid with sales growing 3%.

As of both core operating income and core EPS growing 13% sales will of course, mainly driven by vessels of our dress barn, and Concentrix core operating income growth was driven.

We will come back to the free cash flow number which was $11 7 billion of lit.

The later overall clearly of solid yearly performance, especially given the challenging business environment, we are all of them.

Next let's focus on the core margin on slide 33, again showing of the writer and 40 on the left on quarter four for the full year continuing operations core margin was 31, 7% growth.

And 280 basis points in constant currencies with the strong improvements in both divisions innovative medicines margin reached 35% of outlook of 220 basis points, allowing us to achieve our previously announced mid thirties core margin target of couple of.

Earlier than planned and Douglas margins grew by 330 basis points to 24, 2%.

Clearly our full year barge and show we are well on track to deliver on our innovative medicines margin targets of the high thirties, and the midterm as well as there was some gross margin target of mid to high 20 ish and the midterm.

Susanna: And for Lutathera, we plan to unlock the potential in the community setting in the U.S. and grow use in earlier lines. We also expect continued growth from our growth drivers Revolay Promagta, Chaka Vee, and Tashila Mekhi. We are also committed to delivering on our launches.

The.

Go to the next slide.

As mentioned earlier of free cash flow for the full year.

It was 11.7 billion down 10% of those prior year. Obviously this was because of higher operating income was more than offset by the payments related to legal matters and higher divestment proceeds and the prior year.

Now turning to our full year 'twenty 'twenty, one guidance on slide 35.

Susanna: We will further expand PICRE in the U.S. and gain momentum in Europe, and we hope to continue strong on ADACRIO, expanding to larger accounts in the U.S. and continuing our global rollout. We will further maximize the first mover advantage with Tabrector in the U.S. and will continue driving awareness of CML and the unmet need for and importance of stamp inhibitors. Last but not least, we will prepare for our next big bets. Lutetium PSMA by advancing our commercial organization for the readout of vision trial later this year and also focus on medical education on canakinomab to establish the importance of pro-tumor inflammation. Another important focus for us is medical education on sabatolimab to build awareness about the dual mechanism of action of TIM3 in MDS and AML.

We expect sales to grow low to mid single digit and core operating income to grow mid single digits ahead of sales driving core margin increase.

Within the divisions and expect innovative medicines sales to grow mid single digit and some of those top line to be probably in line with the prior year the.

Some of those guidance is due to the impact of Covid on our retail business and the expected decline of U S. Only started the business.

The key assumption for his guidance and importantly is that we see a return to normal global healthcare systems and prescribing dynamics by the middle of 'twenty and 'twenty one.

And in addition, we assume that no gilenya and lowest endoscopic and they are.

<unk> genetics into in 'twenty, and 'twenty, one and the U S.

Please also note that the overall generic impact is expected to be in the range of the negative minus 3% of sales similar to what we saw and 2020.

Susanna: And as Vas said, we are advancing our early assets TNO155 and LXH254 in a broad range of combination studies. Moving to slide 29, just to give you an update on the recently announced yield to in-licensed Tizolizumab from VyGene. This is a late stage PD-1 inhibitor specifically engineered to minimize binding to the FC gamma receptor on macrophages.

We expect there to be continued generic erosion of brands, including us and until ex Chase Keybanc also of some mature of top brands and Thailand.

On slide 36.

I would like to explain the dynamics that we expect to see and quarter. One given that we had quite a significant COVID-19 impacts last year quarter, one which of course would impact the growth rate. So as you recall there was the significant forward purchasing in the quarter one of last year.

Susanna: Tizolizumab has 15 potentially registration-enabling clinical trials currently ongoing, with the first ex-China filing expected in 2021. With this deal, Novartis obtains development rights on commercial rights in key markets outside China, including the U.S., Europe, and Japan. It is a very attractive asset for us as we look to expand our presence in the checkpoint inhibitor space, and it provides us with an opportunity to launch PD-1 sooner in broad and important indications, such as lung cancer. We have also identified multiple potential combination opportunities with the Novartis portfolio across all of our four therapeutic platforms, so we are very excited about collaborating with BiGene to bring titillism to patients around the world. And we are looking forward to providing more updates after the transaction is closed later this year. And with that, I hand over to Harry.

Worth approximately three points of growth that largely reversed in quarter, two and with no overall impact on the full year 2020, so as the resides in quarter. One 'twenty 'twenty, one we anticipate sales to decline low to mid single digits year on year the quarter one underlying.

<unk>, excluding the stocking effect is expected to be broadly in line with prior Europe true to the continued COVID-19 impact on health care systems and patient visits.

Turning to slide 37.

And 2021, we do expect further margin expansion.

As mentioned earlier with core operating income growth.

And the magnitude however will be lower compared to the 'twenty to 'twenty, where we increased core margins by 280 basis points expected positive drivers of future cooperating and kind of growth include the continued performance of our growth drivers the launch uptake of consent and other launches.

And as well as productivity programs and continuing adoption of our new ways of working.

Growth will be partially offset by increased large and prelaunch investments, mainly because I'm kind of like meal.

As well as development costs for pistol and move them up which we recently and licensed.

From vision of course on the after the completion of the transaction.

We will also likely see further investments into growth drivers as we expect sufficient access to normalize from the middle of the year.

Harry: Thank you, Susanna. Good morning. Good afternoon, everyone.

On slide 38.

Harry: I'm now going to walk you through some of the financials for the fourth quarter of the year, as well as provide you with our 2021 guidance. As always, my comments refer to results of continuing operations and growth rates in constant currencies unless otherwise noted.

And we'd like to add some perspective of our key financial elements of the expected at the bottom line performance.

And that's you can see and we expect core net financial expenses to be broadly in line with 2020.

And also the 'twenty and 'twenty, one core tax rate to be around 16%.

Next slide please.

So as you can see on slide 39, we are pleased to propose our 24th consecutive dividend increase to three Swiss francs per share that's an increase of 2% with all the dividend yields remaining above 3% and fully in line with our dividend policy of increasing our dividend.

Harry: So turning to slide 31, we compare our actual results here with our latest guidance for 2020. And as you know, we've revised our core operating income guidance upward in October, and I'm pleased to say that we met both cooperating income and the sales guidance on sales. Given the resurgence of COVID-19 in Q4, we ended at a low end of the 3-4% range as we mentioned during the Q3 investor calls. Now to slide 32.

Every year and Swiss francs and.

Finally on slide 40.

As countries currencies consistently and constantly change I want to bring to the attention of the estimated currency impact on our results using the current ex.

Change right.

So if late January rates prevail for 2021.

And would see of full year impact of currencies on sales of around 3% to 4% positive and on.

Harry: Schrodinger's summary of the performance for quarter four and full year. I will focus on the full year results on the right-hand side. Full year performance was solid, with sales growing 3%, and both co-operating income and core EPS growing 13%. Sales were, of course, mainly driven by Presto, Zolgensma, and Cosentix.

Core operating income of 3% positive.

Quarter, one as you can see here of states would be positive 4% and.

And then cooperating income of positive 2%.

As you know we update the expected currency impacts every month of our website.

With that I hand back to Ross.

Great. Thank you Gary turning to slide 42, just a final word on our ESG progress of the company I think as many of you know.

Place the high priority and being a leader and our sector on the ESG across our four main areas of focus through our materiality assessment. Some of the highlights include the issuance of the first industry's sustainability linked bond for access to medicines, our commitment for full carbon plastic and water neutrality by 2030.

Harry: Co-operating income growth was driven by Higher Sales, Some Lower Spend, and a Significant Productivity Program. Operating income growth was 19%, driving net income growth of 20%. We will come back to the free cash flow number, which was 11.7 billion, a little later. Overall, clearly a solid yearly performance, especially given the challenging business environment we are all in. Next, let's focus on the core margins on slide 33, again showing the right-hand full year and the left-hand quarter four. For the full year, the continuing operations core margin was 31.7%, growing 280 basis points in constant currencies, with strong improvements in both divisions. Innovative Medicines' margin reached 35% as forecasted, up 220 basis points, allowing us to achieve our previously announced mid-30s core margin target a couple of years earlier than planned.

We were just ranked today and number two and the access to medicines index that was just announced and continue to see strong progress and our DNI and other corporate citizen ship efforts. All of this has led to improvements and our ESG rankings and we continue to work to being a leader and the ESG efforts across the sector in the years.

It had.

So moving to slide 43, as we noted at our meet the management meeting in November we're confident we will grow top and bottom line every year to 2025 and need external expectations of 4% growth.

Reaching $60 billion and sales and 2025 and reaching the consensus margin of 37, six and 2025, and we will look forward to continuing to demonstrate our progress on this front as we move through the quarters ahead.

So closing on slide 44.

As you see we delivered on our strategic and operational commitments and advance our strategic priorities in 2020, despite the challenging business environment. Our third year of sales core operating income and margin improvement I think demonstrating the operational effectiveness of the organization.

Harry: And Zendesk margin grew by 330 basis points to 24.2%. Clearly, our four-year margins show we are well on track to deliver on our innovative medicines margin targets of the high 30s in the midterm, as well as our sun-dose margin target of mid to high 20s in the midterm. Let's go to the next slide. As mentioned earlier, free cash flow for the full year was 11.7 billion, down 10% versus the

<unk>, our pipeline of deep mid and late stage pipeline as well as important milestones in 2020, and as I noted expect top and Bottomline growth every year through 'twenty and 'twenty five so with that we can open the line for questions I would ask that the.

The questioners limit themselves to two questions. We do have a number of people and the queue already thank you operator.

Harry: Obviously, this was because higher operating income was more than offset by the payments related to legal matters and higher divestment proceeds in the prior year. Now, turning to our full year 2021 guidance on slide 35. We expect sales to grow low to mid-single digit and co-operating income to grow mid-single digit ahead of sales driving core margin increases. Within the divisions, we expect Innovative Medicine sales to grow mid-single digit and Sandoz's top line to be broadly in line with the prior year. The Sandals Guy

Thank you, ladies and gentlemen, as a reminder, if you wish to ask your questions Day. Please press star and one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press the husky once again. Please press star one if you wish to ask a question.

Your first question today comes from the line of Mark Purcell from Morgan Stanley. Please go ahead. Your line is open.

Okay. Thank you very much for taking my questions. It's more of Purcell from one of the stomach.

And so just two firstly for Harry how big could you just help us further with the sort of phasing of of growth through the course of the year. So as he said for Q1 underlying growth roughly flat should we assume a similar thing for Q2, which sort of sets you up for eight to nine and sales growth and the second half the year to reach the the guidance.

Harry: Due to the impact of COVID on our retail business and the expected decline in U.S. oil solid business, the key assumption for this guidance is that we see a return to normal global health care systems and prescribing dynamics by the middle of 2021, and in addition, we assume that no Jelenia and no Sandoz-Tata-Eliar generics enter the market in 2021 in the U.S. Please also note that the overall generic impact is expected to be in the range of negative minus 3% of sales, similar to what we saw in 2020. We expect there to be continued generic erosion on plants, including Affinitor's X-shaped cleavage, also some mature off-top plants, and dioramas, on slide 36.

And is there anything that you see in terms of the phasing of Sundays, which we may not have as much visibility of them, which is different and that pattern and then secondly, if I was maybe one for you with them to sort of lithium and the Biogen and sale of this is exports of innovation out of China.

And one of the first products to do so so if there are of potential which uninsured in terms of exports and the product at a lower price point and time when it comes to negotiating pricing agreements with the with with governments globally or is the lower price points and China potentially some of that you could use to advantage when it comes to transferring the value into the potential.

<unk> of your next generation asset so think of things such as you know Tim three ship to see the seventy-three et cetera, so that would be useful to get some contracts of that.

Harry: I would like to explain the dynamics that we expect to see in quarter one, given that we had quite a significant COVID impact last year in quarter one, which, of course, would impact the growth rate. So, as you recall, there was a significant forward purchasing in quarter one of last year, worth approximately three points of growth, but largely reversed in quarter two, with no overall impact on the full year 2020. So as a result, in quarter one, 2021, we anticipate sales to decline low to mid-single digits year on year. However, the quarter one underlying performance, excluding the stocking effect, is expected to be broadly in line with the prior year due to the continued COVID-19 impact on healthcare systems and patient visits. Turning to slide 37.

Terrific. Thanks, Mark Harry on the phasing of growth.

Thank you Mark.

Yeah, the last year last year was quite.

Listing with the forward buy if you will as health Justice and strive to get some inventory.

So the patient level longer scripts up each of them. So we have this $400 million roughly effect of forward buy of struggling and quarter, one and then that the stocked and quarter true that's roughly three points on our quarter.

Of course, the in quarter, two would have to be reversed the positive effect and other effect. We had the quarter tool is the lucentis basically many patients skipped the doctor's script, one injection that's not fully back so quarter two we should see some good.

And so the first half I would say.

We do expect to be broadly in line with price maybe low single digit growth is totality of trust and cloud in quarter, one and then some good quarter over quarter towards the expectation.

That is broadly in line with prior year, especially in what we have seen the last two quarters.

Harry: In 2021, we do expect further market expansion, as mentioned earlier, with co-operating income growth. The magnitude, however, will be lower compared to 2020, when we increased core margins by 280 basis points. Expected positive drivers of future cooperation and growth include the continued performance of our growth drivers, the launch uptake of Cosinta and other launches, as well as productivity programs and the continuing adoption of our new ways of working. Crowes will be partly offset by increased launch and pre-launch investments, mainly Kacenta and Lexmio, as well as development costs for Epistle Elizumab, which we recently analyzed from Beijing, of course We will also likely see further investments into cross drivers as we expect physician access to normalize from the middle of the year, and Clyde Turley-Abes.

Think about the second half of the 2020 no quarter, three was zero and quarter one quarter four was plus one and that was the environment that we expect the next couple of quarters to be.

So that's why we believe that as a reason that the scenario of course as unprecedented volatility and therefore, we have to plan and defense and our renewals. So then as you say.

In the second half, we do expect some very good growth, but again to the target ranges and have to see how quickly then the healthcare systems open up so I think that phasing of half one half two and then if you have to do this quarter, one stocking and quarter two of Destocking of last year.

Give a good a good feeling for how to model the quarters I don't want to get into innovative medicines, where the sandoz of things we'd get too crowded.

UFC and lost and other.

The one quarter two of both divisions and I think that should be helpful.

Thanks, Harry on the anticipated.

Broadly speaking our goal is to maximize the value of the stuff that we have the asset they can participate and the $50 billion plus PD one market.

Around the world, we have the full commercial flexibility to maximize the value of the products and then our goal of course is the leverage the medicine and across the full of combinations possible across Novartis is.

Harry: I would like to add some perspective on other key financial elements of the expected bottom line performance. As you can see, we expect core net financial expenses to be broadly in line with 2020 and also the 2021 core tax rate to be 16%. Next slide, please. So, as you can see here on slide 39, we are pleased to propose our 24th consecutive dividend increase to three Swiss francs per share. There's an increase of 2%, with our dividend yields remaining above 3% and fully in line with our dividend policy of increasing our dividend every year in Swiss francs.

Oncology portfolio. So we have number of combination studies already planned and we believe having a hopefully soon approved PD, one and U S. And then later also in Europe will enable us to accelerate our own combination programs across the full range of of our portfolio I can't come in and it's too soon.

And premature to comment on pricing strategies et cetera, but I think once the deal closes and we're further along we can of course provide more granularity and suzanna can provide more granularity on our commercial strategies and.

And I think a question operator.

Thank you. Your next question comes from the line of Laura Sutcliffe from UBS. Please go ahead. Your line is open.

Harry: Currency is constantly changing. I want to bring to your attention the estimated currency impact on our regards using the current exchange rate. So if late January rates prevail for 2021, we would see a full year impact of currencies on sales, around 3 to 4% positive and on co-operating income, 3% positive. For quarter one, as you can see here, states would be positive 4% and on co-operating income, a positive 2%, and as you know, we update these expected currency impacts every month on our website. With that, I head back to Laos.

Hello, and thank you and to put a specific questions. Please.

Firstly for Xeljanz and the in the U S and I think you said that you lost that the result of 74% coupon coverage and Yokel now is I think 80% by the end of the year, if I heard it right is.

Does that mean that you think the accessories and you really kind of expand sort of incrementally and in.

And the U S. This year and sort of and practical times of the wait and see very much extra or is there a more optimistic scenario and the us and then secondly onto centrica.

Vasant Narasimhan: Great, thank you, Harry. Turning to slide 42, just a final word on our ESG progress as a company. I think, as many of you know, we've placed a high priority on being a leader in our sector on ESG across our four main areas of focus through our materiality assessment. Some of the highlights include the issuance of the first industry sustainability-linked bond for access to medicines, and our commitment to full carbon, plastic, and water neutrality by 2030. We were just ranked number two in the access to medicines index that was just announced, and we continue to see strong progress in our D&I and other corporate citizenship efforts. All of this has led to improvements in our ESG rankings, and we continue to work to be a leader in the ESG efforts across the sector in the years ahead.

You have a rough idea of when you expect that you'll start to see the majority of sales coming from pay for products rather than free products. Thank you.

Yeah. Thanks, Laura so on on the old Gen. Some of what we ended up seeing in 'twenty and 'twenty was newborn screening coverage and the U S and the high Sixty's and our goal is to get that into the high Eighty's and.

Over the course of of.

The 2021 and in that setting we would expect again, Dow Jones and I have the very high very high market share and it states that of newborn screening alongside that we also are working hard to get better even further Medicaid coverage with hopefully getting a significant number of additional states put it fully of putting in place Medicaid programs. So.

We haven't seen the significant barrier, we do think that will ease of use the ability to get patients started I would still say in general I mean, the biggest constraint right now and Xeljanz and the growth is more of the pandemic and the underlying demand we see very good dynamics very solid the AAV.

Vasant Narasimhan: Moving to slide 43, as we noted in our Meet the Management meeting in November, we're confident we will grow top and bottom lines every year to 2025 and meet external expectations of 4% growth, reaching $60 billion in sales in 2025, and reaching the consensus margin of 37.6 in 2025. We'll look forward to continuing to demonstrate our progress on this front as we move through the quarters ahead. So, closing on slide 44.

The testing rates around the world because of strong interest for government.

Put in place reimbursement programs.

But it does take more time independent of it and we do see positions delaying starts with Xeljanz.

Simply because of the initiation of procedures involved with the such a therapy. So we're hopeful that as the pandemic recedes or state or health care systems stabilize we will see an acceleration over the course of the year now turning to cause symptoms of Marie France.

Vasant Narasimhan: As you see, we delivered on our strategic and operational commitments and advanced our strategic priorities in 2020, despite the challenging business environment. This was our third year of sales, core operating income, and margin improvement, I think, demonstrating the operational effectiveness of the organization. We're progressing our pipeline, deep mid- and late stage pipeline, as well as important milestones in 2020. And, as I noted, expect top and bottom line growth every year through 2025. So with that, we can open the line for questions. I would ask that the questioners could limit themselves to two questions. We do have a number of people in the queue already. Thank you. Operator.

Well, thank you Laura.

The bridging program is available for commercial patients.

And for up to 12 months, So we've had and generous programs and I can tell you that the majority of systems of patients are currently on this bridging program, we expect the conversion to paid products and.

And with the share of free goods, the decline from 70% to 30% over the course of the year and that will obviously drive up the sales ramp up what's important here is that we expect three quarters of the 21 sales to be realized and the second half of the year and that's of course of things the pandemic recovery in line with the group guidance.

What I can say in the meantime is that the team is doing and incredible job with the launch we've seen them access and we beat our own internal benchmarks on access.

Operator: Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question today, please press star and 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key.

Seeing a naive patients at 17% we of leading share of attention.

We've made sure that we focus on making fast initiations and making it easy. So we're in good shape of building. The foundation, we have a good free goods program and we're hoping to accelerate the sales and in the second half of the year.

Operator: Once again, please press star and 1 if you wish to ask a question. Your first question today comes from the line of Mark Purcell from Morgan Stanley. Please go ahead, your line is open. Yeah, thank you very much for taking my questions. It's Mark Purcell from Morgan Stanley.

Great. Thanks, and my front. Thanks, Laura next question operator.

Thank you and your next question comes from the line of Matthew Weston from Credit Suisse. Please go ahead. Your line is open.

Thank you very much two questions. Please.

Lots of the CMT and late November you expressed confidence and consensus and I think a lot of investors.

Mark Purcell: So just to start, for Harry, could you just help us further with a sort of phasing of growth through the course of the year? So, as you said for Q1, underlying growth roughly flat, should we assume a similar thing for Q2, which sets you up for eight to 9% sales growth in the second half of the year to reach the guidance? And is there anything you see in terms of the phasing of Sandoz, which we may not have as much visibility on, which is different from that pattern?

Took that to mean each year rather than just 2025.

Now of the 'twenty, one guide seems to be somewhat below consensus. So you obviously had good visibility on the challenges of Covid and late November. So can you just tell people. If there is anything thats fundamentally changed since late November or really it's just the.

And the pattern of growth out of 2025, the potentially was misinterpreted and.

Harry: And then secondly, if I were maybe one question for you, with Cicero-Lizumab and the BiGene deal, obviously, this is exporting innovation out of China for one of the first products to do so. So is there a potential challenge here in terms of exporting the product at a lower price point when it comes to negotiating pricing agreements with governments globally? Or is the lower price point in China potentially something you could use to your advantage when it comes to transferring the value into potential combinations of your next generation assets? So, thinking of things such as TIM3, SHIP2, CD73, etc. So it would be useful to get some context there.

And then secondly on Entresto and path again, just referencing that meet management you put it in the 502 of $1 billion peak.

Peak sales bucket now that you've heard of the outcome commentary and you've obviously had the further interaction with FDA do you think that peak sales potential is conservative given the number of patients.

You've just laid out and the presentation today.

Yeah. Thanks, Matthew on the first point, our intention and meet the management and was to provide confidence over the five year period and not to provide any sort of annual milestones with respect to consensus certainly it's if that was misinterpreted I apologize that we were not clear enough.

Vasant Narasimhan: Terrific. Thanks Mark. Harry on the phasing of growth?

I think what we did say is we plan to consistently grow sales and core operating income we do that this year. We grow core operating income ahead of sales. We also have tried to be consistent with the margin progression will not be at a steady pace, but we will get to the high thirties as the as we outlined as well so I think.

Harry: Yeah, thank you, Mark. Yeah, the last year was quite interesting with the forward buy, if you will, as healthcare systems try to get some inventory and also the patient level, longer scripts have been given. So we have this 400 million effect of forward buy or stocking in quarter one, and then that's destocked in quarter two. That's roughly three points on our quarter. So, of course, then quarter two, you know, would have the reverse positive effect. Another effect we have in quarter two is that Lucentis, basically, many patients skipped or doctors skipped one injection, and that's now fully back.

We are on track nothing fundamentally has changed and when I. When we look at that 4% growth out to 'twenty and 'twenty five and the margin out to around 38%, we feel very good with our ability to achieve that with the portfolio that we have and hand now with respect to.

Half of past, maybe I'll turn it over to Mary fronts to give a little bit of the range of patient numbers and.

Gotcha.

Thank you Bob.

Harry: So, quarter two, we should see some good growth. And so the first half, I would say, we do expect to be probably in line with prior years, maybe low single-digit growth as a whole, right, first decline in quarter one, and then some good growth in quarter two is the expectation, that is broadly in line with prior years, basically what we have seen the last two quarters. Now if you think about the second half of 2020, quarter three was zero, and quarter four was plus one. And that was the environment that we expected the next couple of quarters to be in. So that's why we believe that is a reasonable scenario. Of course, there is unprecedented volatility, and therefore, we have to plan for different scenarios.

The I kind of discussion really reinforced the unmet need for entresto and value and the treatment of paths and we see the spin.

Typically and in this group of patients with ejection fraction of the corn normal but its difficult at this point to give you a specific range because that's going to depend on the the addressable patient pool, which will obviously depend on the label what I can say is that the total population is about 3 million patients and.

The U S and about 2 million of them have and ejection fraction and be below normal.

We also now and this market and this is critical I referenced before that it's important to have guidelines. So our uptake is going to be gradual as those guidelines are updated and we're going to continue to keep our consensus around four to 5 billion for total and trusts us out so we previously guided.

Harry: So then, as you say, in the second half, we do expect some very good growth. But again, we talk ranges and have to see how quickly the health care systems open up. So I think that the phased approach of half one, half two, and then if you have to do this quarter one stocking, quarter two destocking of last year should give you a good feeling for how to model the quarters. I don't wanna get into innovative medicines where the sun goes, I think we get too granular, but you have seen last year, you know, the quarter one, quarter two of both divisions, and I think that should be kept.

Three to four on Ross and we are guiding four to five Russ and patched together.

Great. Thanks, My friend, Thanks, Matt next question operator.

Thank you. Your next question comes from the line of Steve Scala from Cowen. Please go ahead. Your line is open.

Thank you, Dan closer and situation and the U S is perplexing two months ago, and Novartis had been anticipating a year in 2020 approval. Then said the facility of review only related to the paperwork and might not be needed and now the product appears the lady here in the U S. So something seems.

Harry: Thanks, Harry. On Tysalizumab, you know, broadly speaking, our goal is to maximize the value of this asset. We have an asset that can participate in the $50 billion plus PD-1 market around the world. We also have full commercial flexibility to maximize the value of the product. And then our goal, of course, is to leverage the medicine across all the full combinations possible across Novartis' oncology portfolio. So we have a number of combination studies already planned. And, you know, we believe having

Right.

And I'm wondering what perspective, you can add the second question you said, it's all of Genzyme a potential was $2 billion is that the first time Novartis has provided that number and and what does that include for addressable SMA patient groups as well as other indications. Thank you.

Yeah, Thanks, Steve on the on the and cluster and topic, it's been certainly a.

Interesting journey for us as well I mean this is the situation, where we added facilities routine inspection would've happened and may due to the pandemic. The FDA converted this two of paper based inspection and the third party provided the documentation and the entire interaction has been purely based and writing there've been no.

Vasant Narasimhan: I can't comment; it's too soon, I think, and premature to comment on pricing strategies, etc., but I think once the deal closes and we're further along, we can, of course, provide more granularity. Thank you.

Operator: Next question, operator. Thank you. Your next question comes from the line of Laura Sutcliffe from UBS. Please go ahead, your line is open. Hello, thank you.

And verbal conversations and needs and of course have happened and writing with the with the third party facility our best.

Estimates over the course of last year were based on our discussions with the review team and our understanding that there were no safety and.

Operator: Thank you. I have two product-specific questions, please. Firstly, for Zolgensma in the U.S., I think you said in your last set of results that you had 74% newborn coverage, and your goal now is, I think, 80% by the end of the year. Does that mean that access is only really going to expand sort of incrementally in the US this year, and, in practical terms, there won't be very much extra? Or is there a more optimistic scenario in there? And then, on to Simta, do you have a rough idea of when you expect that you'll start to see the majority of sales come from paid-for products rather than free products? Thank you.

Efficacy or our CMC related concerns that were product specific.

We ultimately all learned we did as well with the C are all of the FDA wanted additional documentation and some additional controlled changes within this facility. Its notable this facility is approved in our European medicines file fully approved and as part of the launch the launch network for the launch of IPO.

In Europe we.

We're working across the weekend with the third party ultimately the third parties' responsibility to provide answers to those questions to the FDA I think we're trying to provide realistic guidance given that we're in a pandemic of Q2 to Q3, and then it'll be up to the FDA ultimately to determine if they still want and in person and inspection when they want to conduct that <unk>.

Laura Sutcliffe: Thanks, Laura. So on Zolgensma, what we ended up seeing in 2020 was newborn screening coverage in the US in the high 60s. And our goal is to get that into the high 80s by the course of 2021. And in that setting, we would expect, again, Zoltan to have a very high market share in states that have newborn screening. Alongside that, we are also working hard to get even further Medicaid coverage, hopefully getting a significant number of additional states fully putting in place Medicaid programs. Though we haven't seen this as a significant barrier, we do think that will ease the ability to get patients started. I would still say, in general, that the biggest constraint right now on Zolgensma growth is the pandemic rather than underlying demand.

Faction.

And how long they take the complete that process and the review I mean, that's those are the facts as we know them and we'll continue to work as fast as we can get the this medicine approved in the U S and launch I think what's important is what Mary of France, and the team mentioned, where she mentioned if anything this is an opportunity for us to prepare even better for the launch.

We don't have to launch this medicine in the midst of a of a pandemic we have the opportunity now to build and even stronger launch preparedness effort and then hopefully get off to a strong start as soon as the products.

As a proof of.

With respect to the Xeljanz and I think historically, we've said that we're comfortable with the 2025 consensus which I believe is and that range of one $9 billion to $2 billion and so that's the basis of of this the other comment that I made and it's based on old Gen Smile I V.

Laura Sutcliffe: We see very good dynamics, very solid AAV testing rates around the world, and a strong interest for governments to put in place reimbursement programs. But it does take more time in the pandemic. We do see physicians delaying starts with Zolgensma simply because of the initiation procedures involved with such a therapy. So we're hopeful that as the pandemic recedes or healthcare systems stabilize, we'll see an acceleration over the course of the year. Now, turning to Cosimta, Mary France.

And based on <unk> IV and the current indications of under two years old in the U S and up to 22 kilograms outside of the U S.

As I mentioned, we continue to work for the.

To get AVX is one of the Nike fully licensed and we'll keep we'll give you an update once we clear the preclinical topic and you finalize the phase III development program.

Thank you.

Thanks, Steve next question operator, Thank you and your next question comes from the line of Graham Parry Bank of America. Please go ahead.

Vasant Narasimhan: So thank you, Laura. Our bridging program is available for commercial patients for up to 12 months. So we've had a generous program, and I can tell you that the majority of Katsimta patients are currently on this bridging program. We expect a conversion to paid products, with the share of free goods to decline from 70 to 30% over the course of the year. And that will obviously drive up sales. What's important here is that we expect three quarters of the 21 sales to be realized in the second half of the year.

Alright, Thanks for taking my questions. So first the question on Covid impacts on the Retrench won't guide roughly how many percentage points do you think COVID-19 is negatively impacting revenue growth and 2021 and on margins and how much wiggle room, and you're giving yourself.

And that given the likelihood that you all going to get more caveats savings. So as we look into 'twenty two of your already setting yourselves up painful cut and easy base of 22 Grace and then secondly, a question on kind of people and it's been quite of lot of investor discussion around timing of insurance and I think some investors and temperature management comment.

Mary Franz: And this, of course, assumes the pandemic recovery in line with our group guidance. What I can say in the meantime is that the team is doing an incredible job with the launch. We've seen access, and we've beat our own internal benchmarks on access. We're seeing naive patients at 17%.

It's made recently and there's definitely no interims in first half of 'twenty. One. So can you clarify if that's correct or if you're just saying you're just not disclosing timing and just think of us guessing if it could happen at any point between now and the final analysis and careful thank you.

Mary Franz: We have a leading share of attention. We've made sure that we focus on making fast initiations and making it easy. So we're in good shape. We're building the foundation. We have a good free goods program, and we're hoping to accelerate sales in the second half of the year.

Thanks, Graham on COVID-19 impact I'll give it to Harry Harris.

Thank you very much Graham so very exact numbers of hard to grab like what is purely COVID-19, but as we compare to our forecast and of course, then analytics around that which.

Mary Franz: Great, thanks very much. Thanks, Laura. Next question, operator?

We're doing constantly.

Starting with the.

Operator: Thank you. Your next question comes from the line of Matthew Weston from Credit Suisse. Please go ahead; your line is open. Thank you very much.

The impact of <unk>.

And we experienced in 2020.

Between two and three percentage points of sales growth.

Operator: Two questions, please. One, Voss, at the CMD in late November, you expressed confidence in consensus. And I think a lot of investors took that to mean each year rather than just 2025. Now, the 2019 guide seems to be somewhat below consensus. So you obviously had good visibility on the challenges of COVID in late November. So can you just tell people if there is anything that's fundamentally changed since late November, or is it really just the pattern of growth out to 2025 that potentially was misinterpreted? And then secondly, on Entresto in PEF, again, just referencing that meat management, you put it in the 500 to a billion, the peak sales bucket. Now that you've heard the Adcom commentary and you've obviously had further interaction with FDA, do you think that peak sales potential is conservative given the number of patients that you've just laid out in the presentation today?

I would attribute is the negative.

On the bottom line, given the cost discipline as well and some of the natural other spend as we are sort of free and we have made up more than that and.

And could even increase our cooperating income guidance now for 'twenty.

'twenty 'twenty one.

Half year effect, we have some a little of the percent of the topline and what we expect so.

Again.

And again, it depends very much of quarter to quarter three goal.

We have severance of <unk>, which we try to Portugal and won the guidance and never easy, but I think we have to be able to care for the world when.

Patient visits and issue initiations back to pre Covid normal, which we do expect after the summer and sort of Q3 and.

And then and the bottom line and just wanted to mention one thing as you know and we.

Significant savings and on the spend.

And of course, we keep our ways of working the saving on travel and the internal meetings and.

So on leveraging digital but we are we have basically.

Put that into the base for 'twenty, one of the cost side and.

Matthew Weston: Yeah, thanks, Matthew. On the first point, you know, our intention to meet management was to provide confidence over the five-year period and not to provide any sort of annual milestones with respect to consensus. So certainly, if that was misinterpreted, I apologize that we were not clear enough. I think what we did say is that we plan to consistently grow sales and core operating income. We will do that this year; we will grow core operating income ahead of sales. We also have tried to be consistent that the margin progression will not be at a steady pace, but we will get to the high 30s, as we outlined, as well. So I think we're on track, nothing fundamentally has changed, and when I, when we look at that 4%, growth out to 2025, and the margin out to a rounded 38%, we feel very good with our ability to achieve that with the portfolio that we have in hand. Now, with respect to half path, maybe I'll turn over to Mary France to give a little bit of the range of patient numbers and capture.

Now to assume we can do significant effort like this again on top of already a quite lot of savings and in 2020.

And what has to be careful that we booked the under invest into the launches and <unk>.

Prelaunch and so we clearly see margin improvement, but after the 280 basis points year and constant currencies.

We have to also ensure the after wide level of the best months S. We expect the markets will open up for more face to face promotion of also as of the summer.

Thanks, Terry and then on an interim guidance, maybe rather than getting specifics on kind of be one in general we have interim data readouts across our programs and we were no longer disclosing the timing of those interim readouts, we'd rather have the investors focus on the full data readout and full timing of data readouts based on the the power.

And of these studies of power of of course the readout.

At the at the close of the study and so we continue to guide to kind of be two and the first half cannot be one and the second half kind of be adjuvant and in 'twenty two.

Thanks Ryan.

Next question operator.

Thank you. Your next question comes from the line of and Manuel Papadakis from Deutsche Bank. Please go ahead. Your line is open.

Thank you very much money type of docs from Deutsche Bank, a couple of questions. Please.

The first of all architectures on the ship to just if you could give us a bit of clarity in terms of time and what we might see that first <unk> combination data and I've seen in the clinic since Q2 last year was.

Vasant Narasimhan: Thank you, Vas. So the Atcom discussion really reinforced the unmet need for interest of value in the treatment of PEPs. And we see this specifically in this group of patients with an ejection fraction before normal. But it's difficult at this point to give you a specific range because that's going to depend on the addressable patient pool, which will obviously depend on the label. What I can say is that the total PEP population is about 3 million patients in the U.S., and about 2 million of them have an ejection fraction below normal. We also know in this market, and this is critical, as I referenced it before, that it's important to have guidelines. So our uptake is going to be gradual as those guidelines are updated, and we're going to continue to keep our consensus around 4 to 5 billion for total interest. So we previously guided 3 to 4 on refs, and we are now guiding 4 to 5 on refs and PEPs.

A portion of them in the U S market. So.

Just comments on top of the and there's a group conference you have based on the day of cheap presumably seat in the house and that will have a major role to play.

And the future targeted lung therapy space and.

And then perhaps the second on the tuck on top of mind breakthrough designation and P and action.

She's free G <unk>.

<unk> has been historically quite clear they don't expect the oil complement assets the challenge.

C. Five agents is the mainstay of therapy, where all of their own and.

True patients so those of breakthrough hemolysis. So would you disagree with that view was the breakthrough designation.

Also covering naive patients will just the refractory subgroups for example.

And just a bit of sorts in terms of the midterm and book in that space and then maybe if I could just tack on and see three G. We've had.

Reasonably promising phase two data of Voc upon and the accolade study and December company that I was talking about potential for filing that would put you.

Very significantly behind and so just timings and the differentiation on that side of things as well with you. Thank you.

Mary Franz: Great, thanks very much. Thanks, Matthew.

Thanks, Emmanuel so on the ship to John.

Mary Franz: Thank you. Your next question comes from the line of Steve Scala from Cowan. Please go ahead; your line is open. Thank you. The Inclisiran situation in the U.S. is perplexing. Two months ago, Novartis had been anticipating a year-end 2020 approval, then said the facility review only related to paperwork and might not be needed, and now the product appears delayed a year in the U.S. So something seems not right, and I'm wondering what perspective you can add.

Yes, sure and thanks for the question of Emmanuel on the ship two inhibitor you know we've been working with variety.

And we have a clinical collaboration in terms of moving forward that a couple of patients.

And in combination with their K Ras sheetrock see out of grass. It we're beginning to see the initial results I think there was one case study that was presented at and oncology conference at the end of the year of last year, we hope to reach proof of concept later this year and move forward based on those results sort of.

The exact timing and terms of the phase II and phase III will be forthcoming and probably the.

Operator: The second question...

Operator: One question, Voss, you said the potential for Zolgensma was $2 billion. Is that the first time Novartis has provided that number? And what does that include for addressable SMA patient groups as well as other indications? Thank you.

Net.

And this time.

All of this year is how we would move forward so.

And also I think you had a number of questions regarding <unk>.

Pack of Pan and I believe specifically you were asking about our approach with the pack of Pan and P N H and combinations.

Steve Scala: Yeah, thanks, Steve. On the Inquisitorin topic, it's certainly been an interesting journey for us as well.

Vasant Narasimhan: I mean, this is a situation where we had a facility routine inspection that would have happened in May due to the pandemic. The FDA converted this to a paper-based inspection. The third party provided the documentation, and the entire interaction has been purely based on writing. There have been no verbal conversations. And these, of course, have happened in writing with the third-party facility. Our best estimates over the course of last year were based on

And as you know just for the folks online here of pack of pans of our first in class complement the.

Factor B inhibitor that acts upstream of <unk>, three and <unk> five.

And as and lexicon has their anti C. Five what we know is that we are targeting both intra vascular hemolysis, which is the C five and inhibitors, which target the extravascular and we also target. The C. Three so we know that about 70% of the patients currently.

The P and HR and adequately controlled with <unk> inhibitors. So we have designed a superiority trial in terms of moving forward and.

Vasant Narasimhan: , and Dr. David Soergel. We did a lot of research on safety, efficacy, or CMC-related concerns that were product-specific. We ultimately all learned, and we did it as well with the CRL, that FDA wanted additional documentation and some additional control changes within this facility. It's notable that this facility is approved in our European medicines file, fully approved, and is part of the FDA's FDA-approved clinical trials in Europe. We're working as fast as we can with the third party, but ultimately, it's the third party's responsibility to provide answers to those questions to the FDA. I think we're trying to do that as well as we can. So, I'm going to turn it back over to you, Dr. Soergel. Thank you, Dr. Soergel. I'm going to turn it back over to you, Dr.

So we do feel like that would be a superiority trial that would give us the indication to move forward and central Asia.

And then Jonathan.

Vacco Pendency of 333, I think that the C five inhibitor.

I think the acting downstream if I'm not mistaken exactly of that is downstream and Emmanuel I forget the third question on Iga and if you could just asked that question because I didn't write down of specific third quarter and I know John It was the that was the question on the on timing of C. Three G and when we would plan to get to a filing of the <unk> for Pakistan.

Yes, so for pack of Pan and see three G. What we've noted is that we have of phase two data read out and the first half of this year and based on that we're looking to move forward and our potential.

And.

<unk> phase III program and potential filing next year 2023.

And I just want to highlight again for attack of and our goal is a first line.

The first line indication and I think Suzanne and her team of of strong hematology presence in the U S.

Vasant Narasimhan: I'm trying to provide realistic guidance given that we're in a pandemic.

So we believe we can launch this products successfully in first line.

Vasant Narasimhan: And it'll be up to the FDA, ultimately, to determine if they still want an in-person inspection, when they want to conduct that inspection, and how long they take to complete that process during the review. I mean, those are the facts as we know them, and we'll continue to work as fast as we can to get this medicine approved in the U.S. and launched. I think what's important is what Mary France and the team mentioned, that anything, this is an opportunity for us to prepare even better for the launch. We don't have to launch this medicine in the midst of a pandemic; we have the opportunity now to build an even stronger launch preparedness effort and then hopefully get off to a strong start as soon as the product is approved.

With respect of <unk>, and then of course, and the full range of indications and the.

Couple of years thank.

Thank you for the question and I know next question operator.

Thank you. Your next question comes from the line of Richard Parkes from Exxon BNP. Please go ahead. Your line is open.

Hi, Thanks for taking my questions two questions. Firstly on simple just wonder to what degree of the launch and the cost saves of oil is being impacted by patients delaying treatment initiation true too.

Worries over of immunosuppression.

The potential lack of response to Covid vaccination of nitrous.

Couple of weeks and publications of underlying it two times increased risk of survey of Covid. The peso to play to <unk> just wondered if you could comment on that and what degree kind of impact some of the class might linger longer term and should come out of the pandemic and then secondly on and trust I, just a clarification and based on the patient population.

Vasant Narasimhan: With respect to Zolgensma, I think historically we've said that we're comfortable with the 2025 consensus, which I believe is in that range of 1.9 to 2 billion, and so that's the basis of a comment that I made. It's based on Zolgensma IV and is based on Zolgensma IV in the current indications of under 2 years of age in the U.S. and up to 22 kilograms outside of the U.S. As I mentioned, we continue to work to get AVXS 101 IT fully licensed, and we'll give you an update once we clear the preclinical stage and finalize the phase three development. Thanks,

Relations that you're pointing to for the.

The percentage ejection fraction indication it sounds like.

You think the labeling discussions will be around COVID-19.

And fraction cutoff, rather than necessarily restricting by sex. So just wondered if you could confirm that and if you are able to quantify what you think the opportunity for entresto as and the Paradise semi setting that would be really helpful. Thank you.

So Marie France, both onto symptoms of Entresto.

Yeah, so and kept intact I think the.

The important thing is that are and where we're really leaving no stone unturned and the launch and as I mentioned before I think we're in pretty good shape on all of our metrics to really bring this products as a first line the empty to market.

We are however of feeling the effects of the pandemic and and you can see that mostly in the overall ability of our teams to perform their patient visits.

Vasant Narasimhan: Next question, operator.

Operator: Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead.

And there is some noise and the market around the vaccination or delaying hesitation by HCP is on switching therapies and and that's that is a reality that we're seeing right. Now however, what I can say is that we are.

Graham Parry: Thanks for taking my question. Firstly, a question on COVID impacts on your 21 guide. So roughly, how many percentage points do you think COVID is negatively impacting revenue growth in 2021? And on margins, how much wiggle room are you giving yourself there given the likelihood that you are going to get more COVID savings? So as we look into 22, you're really setting yourselves up here for quite an easy base for 22 growth.

And you're running some clinical trials in vaccinations. We also have data in this industry.

In this regard.

And looking at other vaccinations and B cell therapies and.

And and other biologics that give us confidence that we'll be able to make sure of that patients and physicians feel comfortable with using cause center and regardless of of the.

Vasant Narasimhan: And then secondly, a question on canopy one, there's been quite a lot of investor discussion around the timing of interims. I think some investors interpreted management comments made recently that there will definitely be no interims in the first half of 21. So can you clarify if that's correct? Or are you just saying you're just not disclosing timing, and just leave us guessing if it could happen at any point between now and the final

Covid and regardless of of vaccination. So theyre currently a lot of real world evidence databases that are quite encouraging and we're looking at this not only for cause some type of it across the broad range of the of products, including a person text as well the important thing is that patients get treated and despite the.

Fact that our selling cycle is a little longer we're not slowing down we're continuing to build the foundation for this product and I do.

Harry: and Kiefer. Thank you. Thanks, Graham. On COVID-19 impact, I'll give it to Harry. Harry.

And believe that that you can expect to see the solid market growth significantly not only because of the work that we're doing that.

Harry: Thank you very much, Graham. Very exact numbers are hard to grab, right, on what is purely COVID, but as we compare to our forecasts, and, of course, then analytics around it, which we're doing constantly, I would say, starting with the impact we experienced in 2020, between 2% and 3% points of sales growth we would attribute as negative. On the bottom line, given the cost discipline as well as some of the natural underspend, as you have seen, we have made up more than that, and it could even increase our cooperating income guidance. Now, for 2021, a half-year effect, we have a little under 2% on the top line, which we expect. So, again, it depends very much on the quarter two and quarter three goals.

But because this is really bringing a high efficacy therapy to patients upfront.

And that can radically change the way that physicians think about and and treat and multiple sclerosis patients. So we said that we are ready we just may just not markets the bounce back.

And then Marie France on Entresto, a heck of a tough ejection fraction versus male female and then also the Paradise and the my.

Potential.

So when when we go back to what I said before it really depends on the addressable pool of patients. We're very encouraged by the conversations that we've heard coming out of the out of AD com and now we're in discussions with FDA around the exact wording of of the label and it'll depend on the patient pool.

And as I said before this is the significant population, but it's also an under diagnosed population. So we will have to take things as it comes and it's very encouraging as we have seen from from the Paragon data and but they are of groups of patients that do benefit and there's a general consensus with the.

Harry: We have several scenarios which we try to put here. One, guidance is never easy, but I think we have to be a bit careful around when patient visits and initiations back to a pre-COVID normal, which we do expect as of the summer, in Q3. And then on the bottom line, I just want to mention one thing.

And the.

And that this is not an exact science, so having and ejection fraction below normal and looking at precise rates is not something that and that that is an exact science. So we're working to make sure that we can bring this product to the largest population possible and where it makes sense.

Harry: As you know, we made significant savings and underspent. Of course, we keep our ways of working, you know, saving on travel and internal meetings and so on, leveraging digital, but we have basically put that into the base for 21 on the cost side, right? And now to assume we can make a significant effort like this again, on top of already quite a lot of savings in 2020, one has to be careful that we do not underinvest in the launches and pre-launches. So we clearly see margin improvement, but after 280 basis points here in constant currencies, we have to also ensure we have the right level of investment. As we expect, the markets will also open up for more face-to-face promotion as of the summer.

And the on am I, so well, obviously have to wait for the size. It for them part of the results of the of the trials, but our data tells us the thereabout.

<unk> million and my events every year across the globe and one and four mm one of the well developed heart failure, so and the U S alone and we're talking about 800000 patients suffering from me and I every year and.

And these might benefit from the trust and so we've got strong access for this product and that we built over the years.

And we've got a great team.

And we you know we hope to bring and trusts. So two two a large incremental population if the results of the trial of positive.

Harry: Thanks, Terry. And then on interim guidance, maybe rather than getting specific on canopy one in general.

And thank you Mary and Thanks, Richard next question operator.

Thank you. Your next question comes from the line of Simon Baker of Redburn. Please go ahead. Your line is open.

Harry: The full timing of data readout is based on the powering of these studies. They're powered, of course, to read out at the close of the study. And so we continue to guide to Canopy 2 in the first half, Canopy 1 in the second half, and Canopy adjuvant in 22. Thanks, Graham. Next question, operator.

Thanks for taking my questions tariff of any place, especially on the new and my time at each of them.

And so changed my price you guys and teach house at the beginning on the countries you expect to add to reimburse and could you tell us the current number of countries, where I sort of changed between best I, Don Kim Roy here.

Operator: Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead; your line is open. Thank you very much, Emmanuel Papadakis from Deutsche Bank. I'd like to ask you a couple of questions, please. Perhaps the first one I could take is on the ship too, just if you could give us a bit of clarity in terms of timing, when we might see the first KRAS combination data. I know you've been in the clinic since Q2 last year, your partner in the U.S. emergency, so, just comments on timing and the degree of confidence you have based on the data you've presumably seen in-house, that will have a major role to play in the future targeted lung therapy space, and then perhaps a second on the Ithacapan Breakthrough Designation and Peonation.

It was hard to keep the preferred.

And.

And in the fourth quarter against expectations.

Could you just give us some color on any pandemic disruption you've seen that and <unk>.

And to which touched and offset by the expanding footprint full came on and that you discussed and then finally a quick question on just solution of map could.

Could you give us the location of the manufacture for the trial and commercial material that you will be using thanks. So much.

Yes, so on the thanks, Simon on under the old Gen small outside of the U S.

Of course, we have access and Germany through the standard axis.

The past there the reimbursement in Japan.

And we're working very and we have a limited reimbursement program right now and a few other European countries, particularly.

Italy, notably, Italy, well, we hope to be able to accomplish and the first half of this year is to establish reimbursement pathways.

Operator: C3G. Alexin has been historically quite clear; they don't expect the oral complement assets to challenge C5 agents; C5 agents are the mainstay of therapy rather than only in refractory patients or those with breakthrough hemolysis. So would you disagree with that view? Was the breakthrough designation also covering naive patients or just the refractory subgroups, for example, and just a bit of thoughts in terms of the midterm outlook and that space, and then maybe if I could just tack on that in C3G, we've had Reasonably Promising Phase 2 Dates from Avakapan in the Accolade Study in December, and the company there Thank you.

And the U K, Italy, Spain, and Canada, and the number of other markets, we'll see those those discussions as I mentioned and I've been a little delayed due to the pandemic, but we're hopeful we can accelerate them and.

And then on top of that a key priority for us as the enable access and emerging markets, particularly Turkey.

Brazil, but amongst other emerging markets as well, where there are significant SMA populations that could.

Children, who could benefit from the old Gen spot. So we hope to see a steady pace of getting reimbursement decisions over the coming year.

<unk> of them.

Yeah. Thank you Simon so have you ever really pleased with the performance of can the IR is also in Q4 very strong growth and this was really driven by double digit growth across the geographies in the U S and Europe, and Japan and this despite the COVID-19.

Would say that the.

Growth is partially driven by the expanding in.

Operator: Thanks Emmanuel. On the shift too, John?

In new markets as I said, there is now 27 markets the tax reimbursements for at least one of the Kim Ryan indication the ink.

Emmanuel Papadakis: Yeah, sure. And thanks for the question, Emmanuel.

John Tsai: On the SHIP2 inhibitor, you know, we've been working with Varadhi, and we have a clinical collaboration in terms of moving forward. We've had a couple of patients in combination with their KRAS G12C adegracib, and we're beginning to see the initial results. I think there was one case study that was presented at an oncology conference at the end of last year.

<unk> manufacturing capacity, which means that we could serve all of the demand and.

And I have to say that you were asking if there is impact from Covid and yes. It is because some treatments rd late but on the other side I think within the market and what <unk> has performed exceptionally well we have gained market share.

John Tsai: We hope to reach proof of concept later this year and move forward based on those results. So the exact timing in terms of the Phase 2 and Phase 3s will be forthcoming, probably in the mid-middle of this year, as to how we would move forward. Also, I think you had a number of questions regarding iptacopan, and I believe specifically you were asking about our approach with iptacopan and PNH and combinations. As you know, and just for the folks online here, iptacopan is our first-in-class complement factor B inhibitor that acts upstream of C3 and C5. And as Alexion has their anti-C5, what we note is that we're targeting both intravascular hemolysis, which is the C5 inhibitors which target the intravascular, but we also target the C3. So we know that about 70% of the patients currently who have PNH are inadequately controlled with C5 inhibitors. So we have designed a superiority trial in terms of moving forward, and we do feel like that would be a superiority trial that would give us the answer.

And I think this is probably driven by the strong data that the Austin real word evidence could demonstrate the efficacy and also safety is even better than and the truly price, though I think very very strong.

And I think very safe products that would not require ICU space and I think this let us probably to the decision by many centers to go broke and right.

Yeah. Thank you Savannah, and then on tourism of menu.

Manufacturing.

The product is produced by and established a third party of European established third party I'm not sure under our agreements what.

And given the ongoing review, what I can and can't disclose I propose we our IR team simply get back to you. Once we once we do the appropriate the appropriate checks, but a very reputable top class third party manufacturer and.

From based out of Europe. So next question operator.

Thank you and your next question comes from the line of Kerry Holford from Diamondback. Please go ahead. Your line is open.

And so yes Kerry holford.

And a couple of questions left for me please.

And.

And the Baidu and PD one and.

John Tsai: And then John, Avaclipan, and C33G, I think that's a C5 inhibitor. I think they're acting downstream, if I'm not mistaken.

I Wonder if you could just talk through why.

The decision to bring that onboard.

And given you have lots of them up and what you got.

John Tsai: Exactly, that is downstream. And Emmanuel, I think you had a third question about IGA. If you could just ask that question, because I didn't write down that specific third question. No, John, that was a question on the timing of C3G and when we would plan to get to a filing in C3G for a tax credit. Yeah, so for TechPAN and C3G, what we've noted is that we have a phase two data readout in the first half of this year. And based on that, we're looking to move forward with a potential phase three program and potential filing next year or 2023.

But the offerings.

And it was taking over there and just timing of.

Sure.

Cash flow and allowed to be aware of should be seen spot sales in March and are weak.

Ongoing combination studies and that asset is.

Wow.

Secondly, on the Brown and Tom.

You highlighted in your slides 18, and B if you're just.

And just telling you and Huntington and <unk>.

Awesome Yeah.

And I wonder why not to meet any of it.

And the related because of delays.

And people should know day type I program.

Cash and you need to be given the fact of.

The phase <unk> study.

John Tsai: And I just want to highlight again for Attack the Pen, our goal is a first line, first line indication. I think Suzanne and her team have a strong hematology presence in the U.S., so we believe we can launch this product successfully in first line with respect to PNH and then, of course, in the full range of indications in the coming year. Thank you for the question. Next question operator.

And the trial.

Right.

Yeah. Thanks, Thanks, Kerry on Boise and does not the change the status of our own PD, one and be view of them as complementary our own PD. One and was primarily focused model is the man who is focused on a few select indications that was the strategy of it took the that medicine will continue on and those indications.

Biogen has taken a very broad development program across the main PD, one indications without overlap on smart Elizabeth and.

Operator: Thank you. Your next question comes from the line of Richard Parkes from Exam BNP. Please go ahead; your line is open.

And so we're excited to bring that bring that medicines and market across the full range of indications and then anything you'd want to add on this point.

Operator: Hi, thanks for taking my questions. There are two questions. Firstly on Casimta, I just wonder to what degree the launch and the class overall is being impacted by patients delaying treatment initiation due to either worries over immunosuppression or a potential lack of response to COVID vaccination. I've noticed a couple of recent publications underlying a two times increased risk of severe COVID with B cell depletors. So just wondered if you could comment on that, on what degree that impact on the class might linger longer term as we come out of the pandemic. And then, secondly, on Entrasto, just a clarification based on the patient populations that you're pointing to for the preserved ejection fraction indication; it sounds like you think the labeling discussions will be around kind of ejection fraction cutoffs rather than necessarily restricting by s So just wondered if you could confirm that and if you are able to quantify what you think the opportunity for Entrasto is in the paradise semi setting, that would be really helpful. Thank you.

Yeah, I've asked us the and I think that really we were impressed by the very broad development program that by the team is running and Clover and programs, having really 50 and potentially registration enabling.

Trial is ongoing and I believe for US also our advantage is that.

And has tested the lithium.

And very important indications and monotherapy that's different from spud of the lease them up like non small cell lung cancer gastric cancer and so on and therefore, we're excited to bring this product to market ex China.

And then John on the Bryan plant and timelines for hunting and a brand of planned timelines, maybe Terry just one last item on the last question. There is we also have a number of targeted therapies that we could use and combination and if we have an approved PD, one and it actually fits very well in terms of a complementary portfolio. So I think thats something that we thought about.

Given timelines as you noted and the question Spa.

Specifically on brand of plan as you highlighted we will get the phase one results.

And the first half of this year with those results what we intend to do is take it to the health authorities and have discussions and if timely.

Timelines of allowed and we certainly will move as quickly as possible.

If it's a realistic we will absolutely have a phase <unk> and the first half of this year, but it really depends on the feedback from the health authorities, because we will have to have discussions both with the FDA as well and European agencies. So.

Richard Parkes: So, Marie-France, both on Kissinger and then Treptow.

Vasant Narasimhan: Yeah, so on Casinta, I think the important thing is that we're really leaving no stone unturned in this launch. And as I mentioned before, I think we're in pretty good shape on all our metrics to really bring this product as a first-line DMT to market. We are, however, feeling the effects of the pandemic, and you can see that mostly in the overall ability of our teams to perform their patient visits. Now, there is some noise in the market around vaccination or delaying hesitations by HCPs on switching therapies, and that's a reality that we're seeing right now.

The last question or the last part of that question was more of this allow for a registrational study and phase <unk> that really will also depend on the discussions that we have and all as well as the data that we'll see and the phase one program. So I think we'll be able to share more with you as we have these discussions and when we see the data.

Thanks, John Thanks, Gary next question operator.

Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is open.

Hi, yes, thanks for taking my questions Firstly interest into another pipeline of asset Scally mob and when do you can you just give us a bit of clarity on the path forward for bonding and thought now see it.

Vasant Narasimhan: However, what I can say is that we are currently running some clinical trials in vaccines. We also have data in this regard looking at other vaccines and B-cell therapies and other biologics that give us confidence that we'll be able to make sure that patients and physicians feel comfortable with using Casimta regardless of COVID and regardless of vaccination. So there are currently a lot of real-world evidence databases that are quite encouraging, and we're looking at this not only for Casimta but across a broad range of products, including Cosentix as well.

Commentary that the regulatory interactions suggest that you call and Paul If you don't think base kidney transplant, sorry based on the ongoing study and so what is the planned timing on that kind of use liver and kidney together. It was another trial starts his full time and can be started and how do you think about that and what sort of endpoints and the regulations requiring.

And then secondly, just on the the generics obviously guidance was noticed I understand and Gilenya generic during the course of the hear from Harry I guess makes sense on Gilenya I presume, there's still that awaits the clarity from the court before Youll give us timing of that one the <unk>.

And the started and the U S. Can you just give us some clarity on I guess, what sort of research of visibility you have a box and so the whole company, but we won't see of U S and the statin or they are generic this year. Thank you.

Vasant Narasimhan: The important thing is that patients get treated, and despite the fact that our selling cycle is a little longer, we're not slowing down. We're continuing to build the foundation for this product, and I do believe that you can expect to see the B-cell market grow significantly, not only because of the work that we're doing, but because this is really bringing high-effective therapy to patients up front. And that could radically change the way that physicians think about and treat multiple sclerosis patients. So we've said that we are ready.

So Greg and John on the skeleton of it.

Yeah. Thanks Peter.

It's kind of map. This is our anti CD 40, as you know we have intentions of moving forward and we still have intentions of moving forward with two or three indications renal transplant liver transplant as well and showrooms, we took and aggressive.

The clinical.

Strategy, given that Theres really been no improvement or a change of standard of care for of renal transplant and 35 years other than cash and urine inhibitors.

I think we noted previously and discussions whether that was the meet Novartis management or other cost where we were using a digital end point and we were having really good discussions with the agency on using this aggressive approach using the digital and point at the end of the year last year. They came back and they noted that the.

Vasant Narasimhan: And then Mary Frantz on the Entrusto half-bath ejection fraction versus male-female and then also Paradise MI potential.

Mary Franz: So when we go back to what I said before, it really depends on the addressable pool of patients. We're very encouraged by the conversations that we've heard coming out of the Adcom, and now we're in discussions with FDA around the exact wording of the label, and that'll depend on the patient pool. As I said before, this is a significant population, but it's also an underdiagnosed population, so we'll have to take things as they come. It's very encouraging, as we have seen from the Paragon data, that there are groups of patients that do benefit, and there's a general consensus with physicians that this is not an exact science. So having an ejection fraction below normal and looking at precise rates is not something that is an exact science, so we're working to make sure that we can bring this product to the largest population possible and where it makes sense.

Wanted to.

Don't use the same and <unk>.

And as previously which is b part of biopsy proven acute rejection, having that as feedback we felt like we wanted to ensure that we have a path forward, which would be a full phase III, so which would be the same timelines of developing your traditional.

And transplant drugs.

Noting that we do feel like Theres also a potentially faster path to the showrooms and we're awaiting the showroom space <unk> result, and once we have those results, we'll be able to disclose the overall timelines on the share of Rems program, which may be faster than the transplant program.

Thanks, John on sand, the stat, and early our generics and the use of them.

Peter I mean as you know there is one generic company that has the chief marketing authorization in Europe and ease of doing a very targeted commercialization currently being really commercialized only in eight markets, including Germany, France and UK our guidance for the U S is based on.

Mary Franz: And on AMI, so we'll obviously have to wait for the size and results of the trials. But our data tells us there are about 7 million AMI events every year across the globe, and one in four will develop heart failure. So in the US alone, we're talking about 800,000 patients suffering from AMI every year, and some might benefit from Entresto. So we've got strong access to this product that we've built over the years. We've got a great team. And we, you know, hope to bring Entresto to a large additional population if the results of the trial are positive.

The fact that the same company has application running in the U S and survival.

We have no updates at this point, but given also the situation with Covid and we expect that this process could take longer but there is no concrete update.

And there is no new information.

Thanks Suzanne.

A quick note for assignment from over and we did a quick check and I can confirm that the.

The test to lose the Mab is produced at the Boehringer Ingelheim production site in Shanghai.

Mary Franz: Thank you very much. Thanks, Richard. Next question operator.

The next question operator.

Operator: Thank you. Your next question comes from the line of Simon Baker, Redfern. Please go ahead, your line is open. Two, if I may, please.

Thank you. Your next question comes from the line of Chaos Pollock from Goldman Sachs. Please go ahead. Your line is open.

And good afternoon, and thank you and first of all of US Congratulations and the progress you've made on the ESG front, especially with the access of medicine going with the number two.

Operator: Firstly, on the newer modalities. On Zolgensma, Vaz, you gave us some details at the beginning on the countries you expect to add to reimbursement. Could you tell us the current number of countries where Zolgensma is reimbursed? And on Kim Raya, it was a particularly good performance in the fourth quarter, compared with expectations? Could you just give us some color on any pandemic disruption you've seen there and the extent to which that's been offset by the expanding footprint for Kim Raya that you discussed? And then, finally, a quick question on Jaisalmer. Could you give us the location of the manufacturer of the trial and commercial materials that you will be using? Thanks so much.

And I'm kind of two questions for me and broad picture Police force kind of your slide on the beach of collaborations suggests that you're open to a broader practices collaboration with BG, maybe I'm over interpreting the sentence, but would love to hear kind of what you are envisaging. There is this kind of a corporate collaboration is it of course.

Aggression from and oncology perspective is just when the work is to sell stuff into China, one of them for you too and <unk>.

The innovation just anything you can add to that would be great.

And then secondly, as you look and kind of the bigger picture of growth that you are suggesting you are comfortable with consensus total 2025, which is of 4% topline growth to my mathematics of consensus has a 78% EPS growth.

If you want successfully delivering that that would put you in the middle of or in line with your peer group.

And your ambitions are bigger and higher than that so I was wondering if you might tell us what your kind of ambitions are and where you think you might actually get too. Thank you.

Simon Baker: Yes, so on Zolgensma, outside of the US, of course, we have access in Germany, through the standard access path there, and we have reimbursement in Japan. And we're working very hard, and we have a limited reimbursement program right now in a few other European countries, particularly Italy, particularly Italy. What we hope to be able to accomplish in the first half of this year is to establish reimbursement pathways in the UK, Italy, Spain, Canada, and a number of other markets. We'll see those those discussions have been a little delayed due to the pandemic, but we're hopeful we can accelerate them. And then on top of that, a key priority for us is to enable access to Zolgensma in emerging markets, particularly Turkey and Brazil, but amongst other emerging markets as well, where there are significant SMA populations that could, children who could benefit from Zolgensma. So we hope to see a steady pace of getting reimbursement decisions over the coming year. Kim Rya, Susanna.

Yeah, Thanks, KR and thanks for the comments as well on the on ESG and we're very pleased with the collaboration with Beijing in China, and I think it fits with our broader goals of double the size of our Chinese business. As I noted we were one of the fastest growing both the national as I noted all of the entered the listings and the upcoming approval.

<unk>.

And I continue to explore partnership discussions with the number of local Chinese players I think specifically basie and of course as a broader portfolio has a strong oncology presence in China of course.

So we're looking forward to continuing the strong collaboration with them, but also with other of strong local local Chinese players as it makes sense.

For our portfolio. So no specific plans are of decisions, but I think more of just to highlight that our ambitions and China are significant and we think we're on the right track with very strong teams across GDP and John's organization as well as marathons and Sudan is commercial teams and.

In terms of the mid mid to long term ambitions I think nothing more to add of course is the fee.

Who are once our company to lead and be the leading medicines company and the industry have very high.

Vasant Narasimhan: Yeah, thank you, Simon. We were really pleased with the performance of Kymriah. It is also in Q4, and very strong growth was really driven by double-digit growth across the geographies in the US, in Europe, and Japan. And this despite COVID. I would say that the growth is partially driven by the expansion in new markets. As I said, there are now 27 markets that have reimbursement for at least one Kymriah indication. We increased manufacturing capacity, which means that we could serve all the demand.

Ambitions, but I think more appropriate and me for me to keep those ambitions to to myself and the continued to simply say we're comfortable as we have stated stated with our sales and the and margin outlook for the consensus out to 2025 and <unk>.

And we'll do our best to deliver a world class pipeline portfolio and the execution across all five of our strategic priorities.

Get that and then most important and my mind is to continue our strong growth trajectory beyond 2025, as well because we of course play this for the very long game.

Thanks, Gary next question operator.

Thank you. Your next question comes from the line of Andrew Baum from Citi. Please go ahead. Your line is open.

Susanna: And I have to say, you were asking if there is an impact from COVID, and yes, there is, because some treatments are delayed. But on the other hand, I think within the market, Kymriah has performed exceptionally well; we have gained market share. And I think this is probably driven by the strong data that we often read about that could demonstrate that efficacy and also safety are even better than in the Julia trial. So I think very, very strong. And I think a very safe product that would not require ICU space. And I think this probably led to the decision by many centers to go for Kymriah.

Oh, hi, the M&A Hutchinson from Citi on behalf of Andrew Baum and.

Just one question. Please okay and tech can you talk you anticipate components and the U S and tons of 'twenty, one given on the exclusion from a couple of national formulary and thank you.

Thank you Emily and this is the longest I've ever gone and and IR call and this role without of course ethics question. So many fronts on cosmetics.

Yeah, and I'm very happy to get at least one question and I'm kind of sometimes.

So the first thing I'd say is I think what we need to put the some perspective, because our overall access position and the U S remains an incredibly strong in fact, you heard me say that before early line access and a key pillar of our strategy. However, we're always going to balance access with long term sustainability.

Susanna: Yeah, thank you, Savannah. And then on to Tyslizumab manufacturing. The product is produced by an established third party, an established European third party. I'm not sure, under our agreements, and given the ongoing review, what I can and can't disclose. I propose we, our IR team simply gets back to you once we have done the appropriate checks, but a very reputable, you know, top class third party manufacturer, based in Europe. So next question, operator.

Context, and you can expect us to continue to do that now specifically on the ESI the sudden which is what you're referring to you can obviously expect to see some impact on volume from this account and that will also be reflected in our N. The Rx share, but know that we're confident and our ability to growth with contracts based on our three and.

The strategic pillars, we talked about Axa, we talk about the competitive product profile across four indications.

Operator: Thank you. Your next question comes from the line of Kerry Holford from Barenburg. Please go ahead; your line is open. Thank you.

And then very importantly, our lifecycle management opportunities that could bring up to six indications and the future.

We've consistently delivered double digit growth despite the competition and despite the fact that the there is a lot going on and this market and you'll see us do that again in 'twenty and 'twenty one.

Operator: A couple of questions left for me, please. Firstly on the BiGene PD-1, I wonder if you can just talk through why you took the decision to bring that on board. Given you have the Spartalism app, and what did that asset really offer that you always take note of. Was it just timing? Or, you know, is there something else here in the world to be aware of?

The access decisions are short term decisions and it's not going to change the long term trajectory for puts and takes.

Our ability to reach 5 billion and beyond.

Thanks for the front.

And that's the next set of of analysts to please limit themselves to one question just in the interest of time next question operator.

Kerry Holford: Should we assume Spartalism is now dead, or will you continue those ongoing combination studies for that asset, as well? And then, secondly, on the Branagh plan, you highlight in the slide Phase 2b, is due to be launched in Huntington's in the second half of the year. I wonder why not any earlier? Is this COVID related? Is it delayed? Is there additional data preparation you need to do in the first half? And could that Phase 2b study be seen as a pivot trial? Thank you.

Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim. Please go ahead. Your line is open.

Thanks, very much so really just wanted to get an update on Scalamandre and Shoguns disease I think previously.

And you had stated that you were planning for either and interim towards the end of the C or perhaps even the final.

Look at those data so just wanted to get an update on the scaling of and chevron's disease and.

And maybe if you could just give us a little color on.

And the ability to recruit patients of continue recruiting patients into that study. If the equipment is completed then obviously that question of the development.

John on the skeleton.

Yes.

And Matt Thanks for the question of famous.

John Tsai: Yeah, thanks. Thanks, Kerry.

And that's the vast disclose earlier, we're really not disclosing the interims moving forward. So as we're moving forward. The recruitment of this has been a little bit slower than we anticipated we're not fully recruited and the phase two b for the scout map, yet and so the recruitment continues and those timelines.

John Tsai: On BiGene, it does not change the status of our own PD-1 BVWMS complementary. Whereas our own PD-1 was primarily focused, spartalizumab was focused on a few select indications. That was the strategy we took with that medicine. We'll continue on those indications. BiGene has taken a very broad development program across the main PD-1 indications without overlap with spartalizumab. We're excited to bring that medicine to market across the full range of indications. Susana, anything you want to add on this point?

It really will depend on when we finish our recruitment. So we'll provide further updates in terms of the exact timing of completion of that trial.

Thanks, John next question operator.

Thank you. Your next question comes from the line of Richard Vasa from J P. Morgan. Please go ahead. Your line is open.

Hi, Thanks for taking my question question on the <unk> and the interest equal form.

Just could you give us the and some help on the the design of the pivotal trial and would you look to boot and the age range beyond the three to five years, which was the original and our space strong trial design and and given.

John Tsai: Yeah, Vas, just to add, I think that really, we were impressed by the very broad development program that BiGene is running in global programs, having really 15 potentially registration-enabling trials ongoing. And I believe for us also, an advantage is that BiGene has tested Tizolizumab in very important indications as monotherapies that are different from Spartalizumab, like non-small cell lung cancer, gastric cancer, and so on. And therefore, we are excited to bring this product to the market at XChina.

Given your the thoughts on what's happened to the other gene therapies. What do you think the regulators would would need in terms of duration durability to see.

And particularly in that space type two SMA patients thanks very much.

Yeah, Thanks, Richard and so we're in discussions now with FDA on finalizing that the clinical trial design I think the discussions are very positive both on dose and duration, but we haven't finalized the design.

Hopefully by Q1, we'd be able to give you at least the perspective on what the agreed design of the of the study is assuming we get off clinical hold later on.

John Tsai: And then John on Branagh's plan timelines? Yeah, Branagh's plan timelines. Maybe, Kerry, just one last item on the last question there.

And the year, so there's still more to come in and we'll keep you posted.

Next question operator.

Yes.

Your next question comes from the line of Fun Caespitose from Society Generale. Please go ahead. Your line is open.

John Tsai: We also have a number of targeted therapies that we could use in combination. And if we haven't approved PD-1, it actually fits very well in terms of a complementary portfolio. So I think that's something that we thought about given the timelines, as you noted in the question.

Good afternoon, and thank you everyone for taking my question a quick one for Richard on Sandoz.

Could you please share with us and how do you see the dynamic of the non Baidu excuse me and our business because we see understand what it is.

Driving this and.

And this business is for the rest of the portfolio.

John Tsai: Specifically on the BRANA plan, as you highlighted, we will get the Phase 1 results in the first half of this year. With those results, what we intend to do is take them to the health authorities and have discussions, and if timelines allow, we certainly will move as quickly as possible. Your last part of that question was, will this allow for a registrational study in Phase 2B? That really will depend on the discussions that we have as well as the data that we'll see in the Phase 1 program, so I think we'll be able to share more with you as we have these discussions and when we see the data.

The more difficult.

And to trim the stomach could you maybe elaborate on the midterm dynamic of the non <unk> business. Thank you.

Yeah.

Richard.

We still have Richard Richard.

On the line.

Which is I think kind of.

Oh, sorry, sorry.

Yes.

Which is the line of still connected.

Okay, well I'll just quickly quickly answer the answer the question I think the the.

The the dynamics, we see right now of Biosimilar, and primarily growth in Europe and Japan.

It continues to be.

A mixed picture of of course hopeful that it was our next wave of assets, we can get a much broader set of assets launched in the U S. The 15 projects now are progressing through our biosimilars portfolio in terms of small molecules. The softness we saw was primarily and anti infectives and.

Operator: Thanks, John. Next. Thank you. Next question, operator.

Operator: Thank you. Your next question comes from the line of Peter Welford from Jeffreys. Please go ahead, your line is open. Hi, yes, thanks for taking my questions.

And Europe as well as the legacy or the oral solids business. We brought back from Aurobindo what were hopeful now is that.

Mark Purcell: Firstly, I'm just going to another pipeline asset, Scalimab. I wonder if you could just give us a bit of clarity on the path forward for filing that now. I see a commentary that the regulatory interactions suggest that you can't file, you don't think, based on kidney transplantation, sorry, based on the ongoing study. So what is the planned timeline there? Can you use liver and kidney together, or is another trial started or planned to be started? And how do you think about that, and what sort of endpoints and regulations are required? And then secondly, just on the generics, obviously, guiding towards no Sandostatin and Jelenia generics during the course of this year from Harry, I guess, makes sense on Jelenia. I presume we still have to wait for clarity from the court before you give us timing on that one. But Sandostatin in the US, can you just give us some clarity on, I guess, what sort of research or visibility you have on that and for your confidence that we won't see a US Sandostatin generic this year? Thank you.

Hopefully, we see demand start to pick up again over the course of this year, but much more important is revitalizing our pipeline and the revitalizing our first to file engine and the U S and being at market formation and Europe. We think the combination of those two pillars of the Biosimilars pipeline and the first of all pipeline should get us to that mid mid single digit growth rate.

And overtime.

Thank you thank you Barak and Beth.

And.

[laughter] next next question, operator, and I think of just a few more of left.

And keep your next question comes from the line of Novartis Koran from income. Please go ahead. Your line is open.

Hi, there thanks for taking my question and.

And just one on M&A, please kind of.

A couple of large deals, which have resulted and some issues where the argue that those assets were developed internally the likelihood of those put them to the rising would it be probably much less light of of cut and thinking the indexes day.

And in terms of issues of like Betsy Dahm and issues.

And given the even the most diligent acquirers would've been probably unlock at the found those issues does it the theme of your enthusiasm for the future deals and.

Of this size given the the risks involved.

And if I may just sneak claim the does the 60 billion.

Vasant Narasimhan: Great. John on the Scala map.

Sales of number include M&A or is that just.

John Tsai: Yeah, thanks Peter. On Escalomav, this is our anti-CD40 antibody, as you know. We had intentions of moving forward, and we still have intentions of moving forward, with two or three indications, renal transplant, liver transplant, as well as Sjogren's. We took an aggressive clinical strategy, given that there's really been no improvement or change of standard of care for a renal transplant in 35 years, other than cast and urine inhibitors. I think we've noted previously in discussions, whether that was Meet Novartis Management or other calls, where we were using a digital endpoint. We were having really good discussions with the agency about using this aggressive approach with this digital endpoint. At the end of the year, last year, they came back, and they noted that they wanted to still use the same endpoint as before, which is B-part biopsy-proven acute rejection.

Organic growth.

Yeah. Thanks for the rest of the second part of just organic growth, we're not including M&A I think the less about I mean look I think when we got into the new technology areas.

Which we believe we need to do in the long run to be a leader to be competitive to drive growth. We are going to learn new things of I think certainly the fact that we are doing the small interfering RNA and novel gene therapies as part of the reason we have.

Some of the challenges that we do.

But I would say, it's less about that and more of we have enough on our plate with a full and internal pipeline and.

And we've done a number of deals which were currently working on fully scaling we of four platforms, we want to get too global leadership on the we have plenty plenty to do always.

Always opportunistically thinking about M&A, but that's not and focus at the moment, we want to execute on the strategy and plan and we have ahead of us and that's the that's what we're focused on that.

Next question operator.

Thank you and your next question comes from the line of Emily Field from Barclays. Please go ahead.

John Tsai: Having that as feedback, we felt like we wanted to ensure that we had a path forward, which would be full Phase III, which would be the same timelines as developing your traditional transplant drugs. Noting that, we do feel like there's also a potentially faster path through Sjogren's, and we're awaiting the Sjogren's Phase IIb result. Once we have those results, we'll be able to disclose the overall timelines for the Sjogren's program, which may be faster than the transplant program.

Hi, Thanks for taking my question I just had a quick question on 2021 and the impact of taking on to the lithium and I was just wondering if you could give us a sense of the order of magnitude of the incremental development costs that you'll be taking on with US is that and is that mostly coming from R&D and the initiate.

And of these combination trials and thank you.

Yeah, Harry you want to provide some color on the other clarity on that.

John Tsai: Thanks, John. On Thandestat and LAR generics in the U.S., Suzanna?

Yes. Thank you so it's a bit complicated, but first of all we do account for the.

Susanna: Yeah, Peter, I mean, as you know, there is one generic company that has achieved marketing authorization in Europe and is doing a very targeted commercialization, currently being really commercialized only in eight markets, including Germany, France, and the UK. Our guidance for the US is based on the fact that the same company has an application running in the US for quite some time. We have no update at this point, but given also the situation with COVID, we expect that this process could take longer, but there is no concrete update, and there is no new information.

And the appropriate if you were shelf development cost of the cards registration trials.

And our core P&L.

And it's about one point of core operating income.

Growth if you will from the dilution standpoint.

It will not be of cash expense because.

The current.

Portfolio is being executed by our Beijing and the PA.

Part of our upfront.

Payments net of cash expense buzz and expense given the structure of the deal the all of them.

This one to ensure that our core resides in the core of accounting is of the highest quality as well.

Okay, that's very helpful. Thanks.

Last question operator.

Thank you. Your last question today comes from the line of Mark to tell from Morgan Stanley. Please go ahead.

Susanna: Thanks Susanna. Just a quick note for Simon from Reverend. We did a quick check, and I can confirm that Thistle Isomab is produced at the Boringer Ingelheim production site in Schenck.

Well, thank you for taking my voice.

It's just another clarification of Investor question actually on a cause of the lithium up.

Operator: So next question, operator.

The question was the 50 and registration trials that some day.

Operator: Next question. Thank you. Your next question comes from the line of Keogh Parekh from Goldman Sachs. Please go ahead; your line is open.

And I mentioned.

And thank all switch, if those which regions and of.

And which indications are you going to be able to pharma. So I guess the question is really reflecting if you need any additional data and of <unk>.

Keogh Parekh: Good afternoon. Thank you. And first of all, Vas, congratulations on the progress you've made on the ESG front, especially with the access to medicine going up number two. Now, kind of two questions for me, broad picture, please. First, kind of your slide on the BG collaboration suggests that you're open to a broader strategic collaboration with BG. Maybe I'm over-interpreting that sentence, but would love to hear kind of what you are envisaging there. Is this kind of a corporate collaboration? Is it a collaboration from an oncology perspective? Is this for Novartis to sell stuff into China via them for you to import innovation? Just anything you can add to that would be great, and then secondly as you look at kind of the bigger picture growth that you are suggesting you are comfortable with consensus through to 2025 which is a four percent top line growth to my mathematics consensus has a seven eight percent EPS growth if you are successful at delivering that that would put you in the middle of or in line with your peer group surely your ambitions are bigger and higher than that so I was wondering if you might tell us what your kind of ambitions are and where you think you might actually get to thank you

Pacific countries, such as the U S or parts of Europe, and any specific indications. Thank you for the follow up.

Yeah, Thanks, Mark and I'll just quickly take care of it we have rights in the U S Europe and a number of other ex U S.

Markets, the Beijing keeps rights and parts of Asia, and Latin America are the.

The clinical trial portfolio of clinical trials currently being conducted are already conducted would support filings and a full range of indications of the second line lung, which they hope to complete this year of first line lung.

Colorectal cancer head and neck, Suzanne and are there others that I'm missing.

No I think gastric as Arthur there you all head and neck, you mentioned and I.

I mean, and these are killed and programs, that's probably worth to mention the enrolling not early Chinese patients, but also from other geographies and I think what is important in this setting that of the comparator is strong and and for example, the are excited about the second line data and non small cell and I'm the Biogen reported.

Very strong overall survival data versus and docks and so I think that that's how you have to do this that and the clinical programs and you believe its very robust and would allow for filings ex U.

Vasant Narasimhan: Thanks, Keyur, and thanks for the comments as well on ESG. We're very pleased with the collaboration with Beijing and in China. And I think it fits with our broader goals to double the size of our Chinese business. As I noted, we are one of the fastest growing multinationals; I noted all the NRDL listings and the upcoming approvals. We're in, you know, continuing to explore partnership discussions with a number of local Chinese players. I think specifically, Beijing, of course, has a broader view. And we'll do our best to deliver a world-class pipeline portfolio and execution across all five of our strategic priorities to get that. And then, most important in my mind, is to continue a strong growth trajectory beyond 2025 as well, because we, of course, play this for the very long game. Thanks, Keyur. Next question, operator.

Oh, sorry ex China.

Thank you of countries. Thanks, Thanks, Mark and thanks, everyone for joining today's call. We appreciate it appreciate your interest.

And our company is well, it's all of the investors I appreciate your support of Novartis.

And we'll look forward to keeping you up to speed over the course of this year. Please stay healthy and thank you again.

Thank you that does conclude our conference for today. Thank you for participating you may all disconnect.

[music].

Yes.

[music].

Vasant Narasimhan: Your next question comes from the line of Andrew Baum from City. Please go ahead, your line is open. Oh, hi there. Emily Hutchinson from Citi on behalf of Andrew Baum. This one question, please: on co-authentics, can you talk about the anticipated performance in the US in 2021, given an exclusion from a couple of national formularies? Thank you.

And.

[music].

Operator: Thank you, Emily, and this is the longest I've ever gone on an IR call in this role without a Cosmetics question. So, Marie Frantz on Cosensics.

Operator: Yeah, I'm very happy to get at least one question on Cosentex. So the first thing I'd say is I think we need to put this in perspective because our overall access position in the U.S. remains incredibly strong. In fact, you heard me say that before.

Andrew Baum: Early line access is a key pillar of our strategy. However, we're always going to balance access with long-term sustainability for cosensics, and you can expect us to continue to do that.

John Tsai: Now, specifically on the ESI decision, which is what you're referring to, you can obviously expect to see some impact on volume from this account, and that will also be reflected in our NBRX share. But know that we're confident in our ability to grow Cosensics based on our three strategic pillars. We talked about access. We talked about the competitive product profile across four indications and, very importantly, our lifecycle management opportunities that could bring up to six indications in the future. So we've consistently delivered double-digit growth despite the competition and despite the fact that there is a lot going on in this market. And you'll see us do that again in twenty twenty one. These access decisions are short-term decisions. They're not going to change the long-term trajectory for cosensics or our ability to reach five billion and beyond.

John Tsai: Thanks very much. I'd ask the next set of analysts to please limit themselves to one question just in the interest of time. Next question, operator.

Yes.

[music].

Operator: Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim. Please go ahead; your line is open.

Operator: Oh, thanks very much. So really just wanted to get an update on Escalomab and Sjogren's disease. I think previously you had stated that you were planning for either an interim trial towards the end of this year, perhaps even a final look at those data.

Richard Vosser: And

Vasant Narasimhan: and maybe if you could just,

Vasant Narasimhan: Thank you.

Vasant Narasimhan: [inaudible]

John Tsai: Yeah, on ESCALOMAB, thanks for the question, Seamus. As Voss disclosed earlier, we're really not disclosing the interims moving forward. So as we're moving forward, the recruitment has been a little bit slower than we anticipated. We're not fully recruited in Phase 2B for ESCALOMAB yet. So the recruitment continues, and those timelines really will depend on when we finish recruitment. So we'll provide further updates in terms of the exact timing of completion of that trial.

John Tsai: Thanks, John. Next question, operator?

Operator: Thank you. Your next question comes from the line of Richard Vosser from J.P. Morgan. Please go ahead, your line is open. Hi, thanks for taking my question. A question on Zolgensma and the intrathecal form.

Operator: Could you give us some help on the design of the pivotal trial? Would you look to broaden the age range beyond the two to five years, which was the original, I suppose, strong trial design? And given what has happened to other gene therapies, what do you think the regulators would need in terms of duration and durability to see, particularly in, I suppose, type two SMA patients? Thanks very much.

Okay.

[music].

Florent Cespedes: Thanks Richard. So we're in discussions now with FDA on finalizing that clinical trial design. I think the discussions are very positive both on dose and duration, but we haven't finalized the design. Hopefully, by Q1, we'll be able to give you at least a perspective on what the agreed design of the study is, assuming we get off clinical hold later in the year. So, there's still more to come, and we'll keep you posted. Next question.

Vasant Narasimhan: Thank you. Your next question comes from the line of Florent Cespedes from Societe Generale. Please go ahead, your line is open. Good afternoon. Thank you very much for taking my question. A quick one for Richard on those.

Vasant Narasimhan: Could you please share with us how you see the dynamics of the non-biosimilar business? Because we see and understand what is driving this business, but for the rest of the portfolio, it's a bit more difficult to understand. Could you maybe elaborate on this midterm dynamic of the non-biosimilar business? Thank you.

Vasant Narasimhan: See if we still have Richard Richards.

Operator: Richard, the line is still connected. Oh, sorry, sir. Richard's line is still connected.

Operator: Okay, well, I'll just quickly quickly answer the question. I think that the, you know, the dynamics we see right now with similar primarily growth in Europe, in Japan, you know, in the US, it will continue.

Vasant Narasimhan: to be

Okay.

Vasant Narasimhan: That's more important.

Vasant Narasimhan: Thank you very much. Thank you, sorry, I couldn't press my mute button, could you now? All right. Next question, operator. I think we have just a few more left.

And.

Yes.

[music].

Naresh Kohan: Thank you. Your next question comes from the line of Naresh Kohan from Intron. Please go ahead; your line is open. Hi there, thanks for taking my question. Just one on M&A... We've had a couple of large deals which have resulted in some issues where we argue that if those assets were developed internally, the likelihood of those problems arising would probably be much less likely to have occurred. I'm thinking of the Avexis data integrity issues, the Lake Bay CDMO issue, and given that even the most diligent of acquirers would probably have been unlikely to have found those issues, does it dim your enthusiasm for future deals off this site given the risks involved? If I may just need to point that does the 60 billion-dollar sales number include M&A or is that just um organic growth?

Okay.

Okay.

Okay.

[music].

And.

Right.

And.

Okay.

And then.

Okay.

Vasant Narasimhan: Yeah, thanks, Naresh. On the second part, just organic growth; we're not including M&A. I think less about I mean, look, I think when we get into new technology areas, which we believe we need to do in the long run, to be a leader to be competitive to drive growth, we are going to learn new things.

Okay.

Okay.

[music].

Vasant Narasimhan: I think certainly the fact that we are doing small interfering RNA and novel gene therapies is part of the reason we have some of the challenges that we do. But I would say it's less about that and more we have enough on our plate with a full internal pipeline. We've done a number of deals which we're currently working on fully scaling. We have four platforms we want to get to global leadership on. We have plenty to do. We're always opportunistically thinking about M&A, but that's not in focus at the moment. We want to execute on the strategy and plan we have ahead of us, and that's what we're focused on. Next question, operator.

Okay.

Yes.

[music].

And.

The.

And.

[music].

Okay.

[music].

And then.

And.

[music].

And.

And.

[music].

Operator: Thank you. Your next question comes from the line of Emily Field from Barclays. Please go ahead.

Operator: Hi, thanks for taking my question. I just had a quick question on 2021 and the impact of taking on Tizolizumab. I was just wondering if you could give us a sense of the order of magnitude of the incremental development costs that you'll be taking on with this asset, and is that mostly coming from R&D and the initiation of these combination trials?

Okay.

[music].

Emily Field: Yeah, Harry. Do you want to provide some color on that or clarification on that?

Yeah.

Okay.

And then.

Harry: Yeah, thank you. So it's a bit complicated. But first of all, we do account for the appropriate, if you will, share of development costs of the current registration trial in our core P&L. It's about one point of co-operating income growth, if you will, from a dilution standpoint. But it will not be a cash expense because the current portfolio is being executed by Beijing, and it's part of our upfront payment. So it's not a cash expense but an expense, given the structure of the deal.

[music].

And.

And then.

[music].

Okay.

And.

And.

And then.

[music].

Operator: Okay, that was very helpful.

Operator: Last question, Operator.

Seamus Fernandez: Thank you. Your last question...

John Tsai: Your last question today comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.

Okay.

John Tsai: Thank you for taking my follow-up. Vas, it's just another clarification, investor question, actually, about Zalizumab.

Yeah.

[music].

Operator: The question was the 15 registration trials that Susanna mentioned. I'm being asked which regions and in which indications you will be able to file. So I guess the question is really reflecting if you need any additional data in a specific country such as the US or parts of Europe in any specific indications. Thank you for the follow-up.

And.

[music].

Operator: Thanks, Mark. So I'll just quickly take it. You know, we have rights in the US, Europe, and a number of other ex-US markets. Beijing keeps rights in parts of Asia and Latin America.

And so.

Richard Vosser: The clinical trial portfolio, clinical trials currently being conducted, are already being conducted with support filings in a full range of indications. So second line lung, which they hope to complete this year, first line lung, colorectal cancer, head and neck. Suzanne, are there others that I'm missing?

[music].

Okay.

Yeah.

Okay.

Hi.

Yes.

Okay.

Okay.

Okay.

[music].

Vasant Narasimhan: No, I think Gastrik is also there. Yeah, I had Eneki mentioned.

Susanna: And I mean, these are global programs, so it's probably worth to mention that they're enrolling not only Chinese patients but also from other geographies. And I think what is important in this setting is that the comparator is strong. And, for example, we are excited about the second line data in non-small cell number. BiGEN reported very strong survival data versus DOCSIS. So I think that's how you have to see this, that the clinical program, we believe is very robust and would allow for filings ex-China.

Yes.

[music].

Yes.

Yes.

[music].

Yeah.

[music].

Susanna: Thank you; have a kind day.

And.

Operator: Thanks. Thanks, Mark. And thanks, everyone, for joining today's call. We appreciate it, appreciate your interest in our company, as well as all the investors, appreciate your support of Novartis. And we'll look forward to keeping you up to speed over the course of this year. Please stay healthy, and thank you again.

Yeah.

Okay.

Okay.

[music].

Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.

Operator: That's all the time we have on conference for today. Thank you for participating. You may all disconnect. ?? , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? [inaudible]