Q4 2023 Novartis AG Earnings Call

January 31, 2024

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Operator: Thank you for watching! Good morning and good afternoon, and welcome to the Novartis Q4 2023 results release conference call and live 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 stars 1 and 1 at any time during the conference.

Speaker Change: Good morning, and good afternoon, and welcome to the Novartis Q4, 'twenty to 'twenty three results release conference call and live 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 questions.

Speaker Change: Install one on one at any time during the conference. Please limit yourself to one question on return to the queue for any follow up a recording of the conference call, including the Q&A session will be available on our website. Shortly after the call ends with that I would like to hand over to Mr. Samir Shah Global head of Investor Relations.

Operator: Please limit yourselves to one question and return to the queue for any follow-up. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Mr. Samir Shah, Global Head of Investor Relations. Please go ahead, sir.

Speaker Change: Please go ahead Sir.

Samir Shah: Thank you very much and good morning and good afternoon, everybody. Thank you again for listening to our full year results and Q4 results. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements.

Samir Shah: Thank you very much and good morning, and good afternoon, everybody. Thank you again for listening to our full.

Samir Shah: Full year results and Q4 results. The information presented today contains forward looking statements that involve known and unknown risks uncertainties and other factors. These may.

Samir Shah: May cause the actual results to be materially different from any future results performance or achievements expressed or implied by such statements.

Samir Shah: For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K, which were filed with and furnished to the U.S. Securities and Exchange Commission. And with that, I'll hand it over. Thank you, Samir. And thanks, everyone, for joining today's call. I know it's a busy day with many companies reading out, but we hope to provide you with some insights into our Q4 2023 results and also some perspectives on the outlook for Novartis in 2024 and beyond. Now, we move to the first slide. Slide four.

Samir Shah: For a description of some of these factors. Please refer to the company's form 20-F, and its most recent quarterly results on form 6K that respectively were filed with and furnished to the U S Securities and Exchange Commission and with that I'll hand across to that thank you Samir and thanks, everyone for.

Samir Shah: Joining today's call I know, it's a busy day with many companies reading out, but we hope to provide you some insights into our Q4 2023 results, but also some perspectives on the outlook for Novartis in 2024 and beyond if we move to the first slide.

Speaker Change: Slide four.

Vasant Narasimhan: As you saw in our earnings release this morning, we delivered a strong full-year performance with margin expansion and strong innovation momentum with 10 positive phase three readouts over the course of 2023. As a reminder, our full-year guidance at the start of the year was quite a bit lower than where we ended up. And we had multiple earnings upgrades over the course of the year demonstrating, I think, the strong business momentum we have as a company. Q4 sales were up 10%, core operating income was up 13%, and on the full year, we were up 10% on sales, and core operating income was up 18%, all in constant currencies, and Harry will go through this in more detail in a few moments.

Speaker Change: As you saw in our earnings release. This morning, we delivered a strong full year performance with margin expansion and strong innovation momentum with 10 positive phase III readouts over the course of 2023.

Speaker Change: Sure.

Speaker Change: Reminder, our full year guidance at the start of the year was quite a bit lower than where we ended up we had multiple earnings upgrades over the course of the year demonstrating I think the strong business momentum we have at the company Q4 sales up 10% core operating income was up 13% and on the full year, we were up 10% on sales and core operating income.

Speaker Change: Up 18% on constant currencies and Harry will go through this.

Speaker Change: In more detail in a few moments. We also had the successful spinoff of Sandoz.

Vasant Narasimhan: We also had the successful spinoff of Sandoz as a really value-creating event for Novartis and our shareholders. We provided our updated 2024 guidance, where we expect to grow mid single-digit and core opting is expected to grow high single-digit, and we've chosen to be prudent with this guidance at this point in time. And then looking to our midterm guidance, which I'll also go through in more detail, we've extended our midterm guidance of 5% constant currency CAGR growth to 2023 to 2028 and continue to hold to our core operating income margin guidance of 40% plus by 2027. So moving to slide five.

Speaker Change: I really value, creating events for Novartis and our shareholders. We provided our updated 2024 guidance, where we expect to grow mid single digit and core Op, Inc. Expected to grow high single digits, and we've chosen to be prudent with the guidance at this point in time, and then looking to our mid term guidance, which I'll also go through more detail we've.

Tended our midterm guidance of 5% constant currency CAGR growth to 2023 to 2028 and continue to hold to our core operating income margin guidance of 40% plus by 2027.

Speaker Change: So moving to slide five.

Speaker Change: This year was a really critical year for the company because we completed the transfer because we completed the transformation of Novartis, We believe really laying a strong foundation for our future growth since 2014, we have.

Vasant Narasimhan: This year was a really critical year for the company because we completed the transformation of Novartis. We believe we are really laying a strong foundation for our future growth. Since 2014, we have spun off both Alcon and Sandoz in shareholder-friendly ways.

Speaker Change: Run off both Alcon and Sandoz in shareholder friendly ways, we have exited our OTC stake also in a shareholder friendly approach exiting are creating a new OTT company with GSK and also importantly exited our Roche stake completing a $15 billion share buyback and then continuing.

Vasant Narasimhan: We have exited our OTC stake also in a shareholder-friendly approach and exited, creating a new OTC company with GSK. And also importantly, we exited our Roche stake, completing a $15 billion share buyback and then continuing the $15 billion share buyback, which is ongoing currently. And we expect to complete that by mid-2025. That leaves us as a pure play, innovative medicines company with a margin of 36% on its way to 40% plus, strong free cash flow, and a strong innovation engine, which we think positions us well for the long run. So moving on to the slide deck.

Speaker Change: <unk> $15 billion share buyback, which is ongoing currently and we expect to complete by mid 2025 that leaves us as a pure play innovative medicines company with a margin of 36% on its way to the 40% plus strong free cash flow and a strong innovation engine, which we think positions us well for the long run.

So moving to slide six.

Speaker Change: When you look at Q4, most importantly was the underlying growth of our key growth drivers, which grew 40% overall on the quarter and that growth rate. We expect to continue that underlying growth is what gives us confidence that we can grow mid single digit in the coming years, and then continue that growth in 2028 and beyond in the mid single.

Vasant Narasimhan: When you look at Q4, most importantly, the underlying growth of our key growth drivers, which grew 40% overall in the quarter, and that growth rate, which we expect to continue. That underlying growth is what gives us confidence that we can grow mid-single digits in the coming years and then continue that growth in 2028 and beyond in the mid-single digit plus range. A combination of these growth drivers as well as strong pipeline productivity puts us, I think, in a strong position to be a consistent grower over the next decade. Moving to slide seven. And I want to just walk you through each of the brands to give you some perspective, and then look forward to taking your questions.

Operator: Good morning and good afternoon, and welcome to the Novartis Q4 2023 results release conference call and live 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 stars 1 and 1 at any time during the conference.

Speaker Change: Digit plus range.

Speaker Change: Combination of these growth drivers as well as strong pipeline productivity.

Speaker Change: In a strong position to be a consistent grower over the next decade.

Speaker Change: Now moving to slide seven.

Speaker Change: And I wanted to just walk through each of the brands to give you. Some perspectives and then look forward to taking your questions. So first entresto delivered 31% growth with sales, reaching $6 billion and we're well on track to reach our peak sales goal of $7 billion plus this growth was both in the U S and ex U S geographies you can.

Speaker Change: See on our weekly Trs, we continued to reach record highs, we had constant currency growth of 27% and 26% in U S and ex U S and China and Japan contributed strongly with strong performance with their hypertension ongoing hypertension launches so going looking forward. We expect continued growth for this.

Vasant Narasimhan: First, Entresso delivered 31% growth with sales reaching $6 billion, and we're well on track to reach our peak sales goal of $7 billion. Plus, this growth was in both the U.S. and ex-U.S. geographies. You can see on our weekly TRX, we continue to reach record highs. We had constant currency growth of 27% and 26% in the U.S. and ex-U.S., and China and Japan contributed strongly with strong performance with their ongoing hypertension launches. So looking forward, we expect continued growth for this brand. However, we maintain our guidance for forecasting purposes that an Entresto LOE will not occur until 2025. And we also maintain our guidance on EU regulatory data protection to November 2026. So moving to slide eight.

Brand mainly.

Speaker Change: We maintain our guidance on for forecasting purposes that in Entresto, Although we would not occur until 2025, and we also maintain our guidance on EU regulatory data protection to November 2026.

Speaker Change: So moving to slide eight.

Speaker Change: No concentrix reached $5 billion.

Speaker Change: In 2023, and we expect to see at.

At least mid to high single digit growth in 2024 on our way to our guidance of $7 billion peak sales.

Speaker Change: Deeper into this performance, we saw 17% growth in the U S and 26% outside the U S. And this was in part in the U S. Due to revenue deduction adjustments, we had in the prior year, leading to a lower base, but we are seeing very good momentum on our IV in hidradenitis launches in the U S and in Hidradenitis in Europe.

Vasant Narasimhan: As you saw in our earnings release this morning, we delivered a strong full-year performance with margin expansion and strong innovation momentum with 10 positive phase three readouts over the course of 2023. As a reminder, our full-year guidance at the start of the year was quite a bit lower than where we ended up. And we had multiple earnings upgrades over the course of the year, demonstrating, I think, the strong business momentum we have as a company. Q4 sales were up 10%, core operating income was up 13%, and on the full year, we were up 10% on sales, and core operating income was up 18%, all in constant currencies, and Harry will go through this in more detail in a few moments.

Speaker Change: Which gives us confidence that <unk> can be a dynamic grower over the coming years, we will continue to keep you updated on how these launches progress over the coming quarter.

Speaker Change: Orders and then we also we will keep you updated as well of the three ongoing phase III studies, we have.

Vasant Narasimhan: Now, Consentex reached $5 billion in 2023, and we expect to see at least mid to high single-digit growth in 2024 on our way to our guidance of $7 billion in peak sales. Going a little deeper into this performance, we saw 17% growth in the US and 26% outside the US. This was in part due to revenue deduction adjustments we had in the prior year leading to a lower base.

Speaker Change: We are progressing in giant cell arteritis, TMR and rotator cuffs tendinopathy.

Speaker Change: So moving to slide nine.

Speaker Change: <unk> sales.

Speaker Change: In the full year doubled to $2 2 billion, we remain on track to reach our 4 billion peak sales guidance strong growth in the U S. But also now increasing growth in Europe and ex U S markets. We currently see 85000 patients treated with get them to date, our U S growth is <unk>.

Vasant Narasimhan: We also had the successful spinoff of Sandoz as a really value-creating event for Novartis and our shareholders. We provided our updated 2024 guidance, where we expect to grow mid single-digit and core operating income to grow high single-digit, and we've chosen to be prudent with this guidance at this point in time. And then looking to our midterm guidance, which I'll also go through in more detail, we've extended our midterm guidance of 5% constant currency CAGR growth to 2023 to 2028 and continue to hold to our core operating income margin guidance of 40% plus by 2027. So moving to slide five.

Speaker Change: 8% in constant currencies ex U S at 193% and we have <unk> leadership now in seven out of 10 major market outside of the United States I think everyone knows well the compelling profile, we have in terms of efficacy and convenient as well as the ease of use sense already pan that patients can bend.

Vasant Narasimhan: But we are seeing very good momentum on our IV and hydroadenitis launches in the US and in hydroadenitis in Europe, which gives us confidence that Consentex can be a dynamic grower over the coming years. We'll continue to keep you updated on how these launches progress over the coming quarters. And then we will keep you updated as well on the three ongoing phase three studies we have are progressing in giant cell arteritis, PMR, and rotator cuff tendinopathy. So moving to slide nine. Cosimta sales for the full year doubled to $2.2 billion.

Speaker Change: <unk> from with the center, we have five years of efficacy safety and Tolerability and we'll look forward to continuing to expand this brand both in terms of the growth.

Speaker Change: B cell class NMS, but also increasing our <unk> share within the B cell class as a key growth driver moving to slide 10.

Speaker Change: No because golly reached $2 1 billion in the metastatic breast cancer setting and we maintain our 4 billion peak sales guidance in the metastatic breast cancer setting alone you can see this growth again was.

Vasant Narasimhan: We have exited our OTC stake also in a shareholder-friendly approach and exited, creating a new OTC company with GSK. And also importantly, we exited our Roche stake, completing a $15 billion share buyback and then continuing the $15 billion share buyback, which is ongoing currently. And we expect to complete the acquisition by mid-2025. That leaves us as a pure play innovative medicines company with a margin of 36% on its way to 40% plus strong free cash flow and a strong innovation engine, which we think positions us well for the long run. So moving on to the slide deck.

Speaker Change: Driven by both the U S and our international business are rolling <unk> share in the metastatic setting it's now up to 46% and we see continued strong growth in the metastatic setting. This is driven by the statistically significant OS we have now across three pivotal studies, the MPC and category one designation.

Vasant Narasimhan: We remain on track to reach our $4 billion peak sales guidance, with strong growth in the US, but also now increasing growth in Europe and in the ex-US markets. We currently see 85,000 patients treated with Cosimta to date. Our US growth is 48% in constant currencies, and our ex-US growth is 193%.

Speaker Change: The median OS of five years, we've demonstrated across those three pivotal trial. We can confirm that we have filed in the EU U S and China, the adjuvant indication across intermediate and high risk breast cancer, and we'll look forward to keeping you up to speed as we progress towards hopefully those approvals and launches over the course of this year.

Vasant Narasimhan: We have NBRX leadership now in seven out of 10 major markets outside of the United States. I think everyone knows well the compelling profile we have in terms of efficacy and convenience, as well as the easy-to-use sensor-ready pen that patients can benefit from with Cosimta. We have five years of efficacy, safety, and tolerability. We'll look forward to continuing to expand this brand, both in terms of the growth of the B-cell class NMS but also increasing our NBRX share within the B-cell class as a key growth. Moving to the next slide.

Speaker Change: Sure.

Speaker Change: Now moving to slide 11.

Speaker Change: So Victor Ho, our full year sales closed out our near blockbuster status at 980 million Importantly, now we see unconstrained supply for this brand we maintain our multibillion dollar peak sales guidance for the current indication and I can say, we see very strong demand signals in growth dynamics in January consistent with.

Vasant Narasimhan: When you look at Q4, most importantly, the underlying growth of our key growth drivers, which grew 40% overall in the quarter, and that growth rate, which we expect to continue. That underlying growth is what gives us confidence that we can grow mid-single-digit in the coming years and then continue that growth in 2028 and beyond in the mid-single-digit-plus range. A combination of these growth drivers, as well as strong pipeline productivity, puts us, I think, in a strong position to be a consistent grower over the next decade. I'm moving to slide seven. And I want to just walk you through each of the brands to give you some perspective, and then look forward to taking your questions.

Speaker Change: Our expectation is that as we cleared the supply constraints in some of the challenges we saw in quarter four we will get back to strong robust growth in quarter, one 2024, and what we would expect as robust quarter on quarter growth over the course of this year. Some more details in terms of treatment sites. We have over 300 U S sites now that are act.

Vasant Narasimhan: Now, Kaskali reached $2.1 billion in the metastatic breast cancer setting, and we maintain our $4 billion peak sales guidance in the metastatic breast cancer setting alone. As you can see, this growth, again, was driven by both the U.S. and our international business. Our rolling NBRX share in the metastatic setting is now up to 46 percent, and we see continued strong growth in the metastatic setting. This is driven by the statistically significant OS we have now across three pivotal studies, the NCCN Category 1 designation, and the median OS of five years we've demonstrated across those three pivotal trials. We can confirm that we have filed for the adjuvant indication across intermediate and high-risk breast cancer in the EU, U.S., and China, and we'll look forward to keeping you up to speed as we progress towards, hopefully, those approvals and launches over the course of this year. Moving to slide 11. Puvicto, a four-year sales closed out near blockbuster status at $980 million.

Speaker Change: <unk> and regularly ordering fully unconstrained supply, where 99, 9% now doses objected on the plan today with a capacity of 250000 radio like <unk> therapy dose is expected in 2024 with the approval now of our Indianapolis site, we have a network expansion ongoing to prepare for <unk>.

Speaker Change: <unk> in Asia with announced investments in both China, and Japan, and as already noted, we expect robust quarter on quarter growth and over the course of 2020 for RP SMA for expected U S. Submission is second half 2024 and will keep you updated as we progress towards that and we also rooms.

Vasant Narasimhan: So first, Entresso delivered 31% growth, with sales reaching $6 billion, and we're well on track to reach our peak sales goal of $7 billion. Plus, this growth was in both the U.S. and ex-U.S. geographies. You can see on our weekly TRX, we continue to reach record highs. We had constant currency growth of 27% and 26% in the U.S. and ex-U.S., and China and Japan contributed strongly with strong performance with their ongoing hypertension launches. So looking forward, we expect continued growth for this brand. However, we maintain our guidance for forecasting purposes that an Entresto LOE will not occur until 2025.

On track on our both our P. SMA addition, NPS EMEA localized all of their metastatic disease trial to move <unk> into earlier lines of therapy.

Speaker Change: Now moving to slide 12.

Speaker Change: <unk> had a strong year and strong quarter moving up now to $125 million in quarter. Four of 2023. This is in the third line setting where we have leading third line market share <unk> share of 43% direct share of 22% I think as you all well know there is high unmet need in the third line setting in over 50%.

<unk> of Hematologists really want improvements in quality of life and.

Speaker Change: Better management of side effects, and some looks really delivers that now we have four years of follow up that really demonstrate a differentiated profile in terms of efficacy as well as a very clear and strong safety profile. So the global rollout in third line setting is ongoing we have approval in over 60 markets where have access granted down over 20.

Vasant Narasimhan: Importantly, now we see an unconstrained supply for this brand. We maintain our multi-billion dollar peak sales guidance for the current indication, and I can say we see very strong demand signals and growth dynamics in January, consistent with our expectations that as we cleared the supply constraints and some of the challenges we saw in quarter four, we would get back to strong, robust growth in quarter one of 2024, and what we would expect is robust quarter-on-quarter growth over the course of this year. Some more details in terms of treatment sites; we have over 300 U.S. sites now that are active and regularly ordering, fully unconstrained supply; we're 99.9% of doses injected on the planned day, with a capacity of 250,000 radioligand therapy doses expected in 2024, with the approval now of our Indianapolis site.

Vasant Narasimhan: And we also maintain our guidance on EU regulatory data protection to November 2026. So moving to slide eight. Now, Consentex reached $5 billion in 2023, and we expect to see at least mid to high single-digit growth in 2024, on our way to our guidance of $7 billion in peak sales. Going a little deeper into this performance, we saw 17% growth in the US and 26% outside the US. This was, in part, due to revenue deduction adjustments we had in the prior year leading to a lower base.

Speaker Change: Five market and very positive feedback from payers on the clinical benefit.

Speaker Change: Now moving to slide 13.

Speaker Change: We read out earlier this month the ask for first trial, which met both its primary endpoints with clinically meaningful and statistically significant results in the frontline setting for somewhat.

Speaker Change: As a reminder, this study had assembly compared to investigator choice PKI, we estimate 50% of the patients were on Imatinib and 50% of the patients were on second Gen. TKS, No op nib or does that nib or suite of nib.

Both primary endpoints were met we showed superior major molecular response rates at week 48 versus standard of care and we also had a very favorable safety and tolerability profile with fewer aes treatment discontinuation and no new safety signals observed. So we're very excited about this data importantly MMR.

Vasant Narasimhan: We have a network expansion ongoing to prepare for launches in Asia, with announced investments in both China and Japan, and as I have already noted, we expect robust quarter-on-quarter growth over the course of 2024. Our PSMA-4 expected U.S. submission is second half 2024, and we'll keep you updated as we progress towards that, and we also remain on track with both our PSMA addition and PSMA localized oligometastatic disease trials to move Plevisco into earlier lines of therapy. Now moving to slide 12.

Speaker Change: Is a good predictor of reasonable predictor.

<unk> endpoint, such as PFS OS and PFS. So this data will be presented at an upcoming medical Congress, we're moving rapidly towards a submission in the first half of 2024, and we will look forward to sharing this full data set and really providing our conviction that <unk> can be a multibillion dollars medicine for Nevada.

Speaker Change: Now moving to slide 14.

Speaker Change: Now let me have continued its steady expansion in the U S as well as across regions. You can see here, we delivered $123 million on the quarter growth in both our international and our U S business on the U S side, we have 3500 facilities now ordering <unk>, which is a 13% growth first quarter three.

Vasant Narasimhan: We remain on track to reach our $4 billion peak sales guidance, with strong growth in the US, but also increasing growth in Europe and in the ex-US markets. We currently see 85,000 patients treated with Cosimta.

55% of that business now is coming from in office buy and Bill and we expect to continue to drive growth on this brand by driving depth in our key accounts as well as expanding the buy and Bill acquisition channel ex U S. Our rollout also continues well with 29 countries with public reimbursement 39 countries with.

Vasant Narasimhan: Semblex had a strong year and a strong quarter moving up now to $125 million in Q4 2023. This is in the third line setting, where we have a leading third line market share, NBRX share of 43%, and TRX share of 22%. I think, as you all well know, there's high unmet need in the third line setting, and over 50% of hematologists really want improvements in quality of life and better management of side effects. Semblex really delivers that.

Vasant Narasimhan: To date, our US growth is 48% in constant currencies, ex-US at 193%, and we have NBRX leadership now in 7 out of 10 major markets outside of the United States. I think everyone knows well the compelling profile we have in terms of efficacy and convenience, as well as the easy-to-use sensor-ready pen that patients can benefit from with Cosimta. We have five years of efficacy, safety, and tolerability. And we'll look forward to continuing to expand this brand, both in terms of the growth of the B-cell class in MS but also increasing our NBRX share within the B-cell class as a key growth. Moving to the next slide.

Speaker Change: Private coverage, we see very positive solid early signals in China, and the self pay market, which we expect to continue over the course of 2024 ahead of our proposed <unk> listing in 2025 in terms of the outcome trials, we remain on track for our secondary prevention outcome studies in 2026.

And we also continue to enroll our primary prevention studies as well.

Now moving to slide 15.

Vasant Narasimhan: Now we have four years of follow-up that really demonstrated a differentiated profile in terms of efficacy as well as a very clear and strong safety profile. So the global rollout in the third line setting is ongoing. We have approval in over 60 markets, we have access granted now in over 25 markets, and we have very positive feedback from payers. Now moving to slide 13.

Speaker Change: Pat Halter and that was launched in the United States and we see I think very positive early launch signals, but we do expect a modest ramp for this brand given the dynamics within the <unk> market.

As a reminder, we have very compelling data for this medicine, including improvements in hemoglobin transfusion avoidance, IV H intramuscular and extravascular hemolysis control in a very in a very clean safety profile.

Vasant Narasimhan: Now, Kaskali reached $2.1 billion in the metastatic breast cancer setting, and we maintain our $4 billion peak sales guidance in the metastatic breast cancer setting alone. As you can see, this growth, again, was driven by both the U.S. and our international business. Our rolling NBRX share in the metastatic setting is now up to 46 percent, and we see continued strong growth in the metastatic setting. This is driven by the statistically significant OS we have now across three pivotal studies, the NCCN Category 1 designation, and the median OS of five years we've demonstrated across those three pivotal trials. We can confirm that we have filed for the adjuvant indication across intermediate and high-risk breast cancer in the EU, U.S., and China, and we'll look forward to keeping you up to speed as we progress towards, hopefully, those approvals and launches over the course of this year. Puvicto's Fool Your Sales closed out near blockbuster status at $980 million.

Our populations in our label or both are adults with <unk>, both naive and switch patients, which was our target label for this medicine.

Vasant Narasimhan: We read out earlier this month the Ask for FIRST trial, which met both its primary endpoints with clinically meaningful and statistically significant results in the frontline setting for Semblix. As a reminder, this study was with Semblix compared to investigator-choice TKI. We estimate 50% of the patients were on imatinib, and 50% of the patients were on second-gen TKIs, nilotinib, dasatinib, or busutinib.

Speaker Change: As an oral therapy, we think we really provide a unique offering for patients with <unk>. There is a rems requirement, but this is similar to other complement inhibitors right now as we look at our launch our focus very much is coming out of ash getting patients upon our patient support program getting our ramp up in running our first.

Speaker Change: Patients have already been initiated and what we're hearing is positive at HCP sentiment interest from patients and peer groups and our goal will be initially to focus on newly diagnosed patients as well as patients who are not currently under full control further hemolysis with their existing therapies over time, we would want to certainly expand this mark.

Vasant Narasimhan: Both primary endpoints were met. We showed superior major molecular response rates at week 48 for standard of care And we also had a very favorable safety and tolerability profile with fewer EAEs, treatment discontinuations, and no new safety signals observed So we're very excited about this data Importantly, MMR is a good predictor, a reasonable predictor of important endpoints such as PFS, OS, and EFS So this data will be presented at an upcoming medical congress We're moving rapidly towards a submission in the first half of 2024, and we'll look forward to sharing this full data set And really providing our conviction that TEMBLIX can be a multi-billion dollar medicine for Novartis, Now moving to slide 14. Now Lectio continued its steady expansion in the U.S. as well as across regions.

Speaker Change: We estimate half of patients with <unk> are currently not on therapy and with an oral agent. We have the possibility we hope over time to get more patients on therapy to avoid any of the subsequent sequela associated with Pn H b.

Speaker Change: Moving to slide 16.

Speaker Change: Yeah.

Speaker Change: As noted in 2023, we have 10 positive phase III readouts with significant sales potential you see them listed here a lot of this data will be presented over the course of.

Speaker Change: 2024, so you'll have a better understanding of the potential of these medicines, whether its medicines like like Remy brewed nib, we've already seen dilutive there are net or net or two data, which I think is really outstanding and hopefully some of you saw that potential naphtha alluded thereof frontline setting.

Vasant Narasimhan: Importantly, now we see unconstrained supply for this brand. We maintain our multi-billion dollar peak sales guidance for the current indication. And I can say we see very strong demand signals and growth dynamics in January, consistent with our expectations that as we clear the supply constraints and some of the challenges we saw in quarter four, we would get back to strong, robust growth in quarter one, 2024. And what we would expect is robust quarter-on-quarter growth over the course of this year. Some more details in terms of treatment sites.

Speaker Change: Of course, the data for <unk> and somewhat data, which I have already mentioned.

Speaker Change: So moving to slide 17.

Speaker Change: I just wanted to say a word of some of the topline readouts, we had in quarter four <unk> have another.

Speaker Change: Third phase III readout with a positive positive phase III readout with clinically meaningful and statistically significant proteinuria reduction in patients with C III Memorial and nephropathy.

Vasant Narasimhan: You can see here we delivered one hundred and twenty-three million dollars in revenue growth in both our international and our U.S. business. On the U.S. side, we have three thousand five hundred facilities now ordering Lectio, which is a 13 percent growth first quarter three. Fifty five percent of that business now is coming from in-office buy and bill.

Speaker Change: You see here on the left the phase two data, which we previously disclosed in phase III study design versus placebo looking at month six before patients crossover to tackle Pan on both arms. We saw this really important proteinuria reduction and safety profile consistent with what we.

Vasant Narasimhan: We have over 300 U.S. sites now that are active and regularly ordering. Fully unconstrained supply. We're 99.9% now doses injected on the planned day with a capacity of 250,000 radioligand therapy doses expected in 2024 with the approval now of our Indianapolis site. We have a network expansion ongoing to prepare for launches in Asia with announced investments in both China and Japan. And as I already noted, we expect robust quarter-on-quarter growth over the course of 2024. Our PSMA-4 expected U.S. submission is second half 2024, and we'll keep you updated as we progress towards that. And we also remain on track on both our PSMA edition and PSMA localized oligometastatic disease trials to move Pliveco into earlier lines of therapy. Now moving to slide 12.

Speaker Change: As seen in previous data and we're currently engaged with the regulatory agencies with a goal for submissions in 2024.

Vasant Narasimhan: And we expect to continue to drive growth for this brand by driving depth in our key accounts, as well as expanding the buy and bill acquisition channel. Ex-US, our rollout also continues well, with 29 countries with public reimbursement and 39 countries with private coverage. We see very positive, solid early signals in China in the self-pay market, which we expect to continue over the course of 2024 ahead of a proposed NRDL list. In terms of the outcome trials, we remain on track for our secondary prevention outcome studies in 2026, and we also continue to enroll our primary, as well. And moving to slide 15.

Moving to slide 18 over the course of the year.

We had positive readouts, both on in Pakistan, and our newly acquired <unk> in Iga nephropathy clinically meaningful results here as well both of these programs have been reviewed with the with the FDA and are on track for submissions of these medicines that would really allow us to have I think a robust.

Speaker Change: Portfolio of medicines to bring to Nephrologists and Iga nephropathy, and then in the future <unk> as we continue to try to build out our nephrology presence around the world. The Gatzke Barth our anti April antibody also acquired in that acquisition.

Speaker Change: Also on track in its phase III study.

Speaker Change: So moving to slide 19.

Speaker Change: Now we expect our innovation momentum to continue in 2024. This will be a year of data readouts full data readout in submissions primarily for the company.

Speaker Change: We expect a few phase III starts, but importantly, as I mentioned key data Readouts and submissions, we'll keep you posted as we progress and when you look at slide 20.

Vasant Narasimhan: Fabhalta has now been launched in the United States, and we see, I think, very positive early launch signals. But we do expect a modest ramp for this brand, given the dynamics within the PNH market. As a reminder, we have very compelling data for this medicine, including improvements in hemoglobin transfusion avoidance, IVH, intravascular, and extravascular mollusc control, and a very clean safety profile. Our populations in our label are adults with PNH, both naive and switch patients, which was our target label for this medicine. And as an oral therapy, we think we really provide a unique offering for patients with PNH. There is a REMS requirement, but this is similar to other complement inhibitors.

Vasant Narasimhan: Semblix had a strong year and a strong quarter, moving up now to $125 million in Q4 2023. This is in the third line setting, where we have a leading third line market share, NBRX share of 43%, and TRX share of 22%. I think, as you all well know, there's high unmet need in the third line setting, and over 50% of hematologists really want improvements in quality of life and better management of side effects. Semblix really delivers that.

Speaker Change: As where why we have confidence as well that will have a steady stream of innovation to drive the company's growth beyond 2028.

Speaker Change: The number of exciting I think assets, we have 2425 as well as the 26 2008 timeframe. This will create a steady flow of replacement power in innovation, enabling us to drive that mid single digit growth rate.

Speaker Change: Now moving to slide 21.

Speaker Change: Over the course of the year, we also signed 15 strategic deals.

Speaker Change: As well as acquisitions totaling over $6 billion I do want to emphasize our core approach and M&A remains as bolt on acquisitions in the sub $5 billion space.

Speaker Change: Deals such as Chinook, but also many smaller deals you can see across the full landscape. You are very much focused on technologies like XR, RNA gene therapy, and <unk> as well as our key therapeutic areas like such as Chinook amongst others. We also continue to invest in artificial intelligence on top of our collaborations with Microsoft.

Vasant Narasimhan: Now we have four years of follow-up that really demonstrated a differentiated profile in terms of efficacy, as well as a very clear and strong safety profile. So the global rollout in the third line setting is ongoing. We have approval in over 60 markets, we have access granted now in over 25 markets, and we have very positive feedback from payers. Now moving to slide 13.

Vasant Narasimhan: Right now, as we look at our launch, our focus very much is coming out of ASH, getting patients on our patient support program, and getting our REMS up and running. Our first patients have already been initiated. And what we're hearing is positive HTP sentiment, interest from patients and patient groups, and our goal will be initially to focus on newly diagnosed patients, as well as patients who are not currently under full control for their hemolysis with their existing therapies. Over time, we would certainly want to expand this market. We estimate that half of patients with PNH are currently not on therapy.

Speaker Change: Talents here. We've also signed agreement now with an agreement now with isomorphic labs of Google's Deep mine, which really allows us I think to be partnered with some of the most preeminent AI researchers in the world to speed up our drug discovery and drug development.

Speaker Change: Now moving to slide 22.

Vasant Narasimhan: We read out earlier this month, the ask for first trial, which met both its primary endpoints with clinically meaningful and statistically significant results in the frontline setting for Semblix. As a reminder, this study was with Semblix compared to investigator choice TKI. We estimate 50% of the patients were on imatinib, and 50% of the patients were on second-generation TKIs, nilotinib, dasatinib, or busutinib.

We did also today extend and update our midterm guidance, you'll remember at R&D day, We had noted 22 to 27, 5% CAGR and today given the momentum we're seeing on our growth drivers and the strong pipeline performance, we're seeing we're extending that 5% growth guidance.

Speaker Change: 23% to 28 now of course up until 2008, we do have some gx impact, which I'm sure. We can discuss further into Q&A, but the momentum we're seeing in our end market growth drivers across our base business across each of the brands, which I've already discussed as well as the positive data we've seen in <unk>.

Vasant Narasimhan: And with an oral agent, we have the possibility, we hope over time, to get more patients on therapy to avoid any of the subsequent sequelae associated. We're moving to slide six. As noted in 2023, we had 10 positive phase 3 readouts with significant sales potential. You see them listed here.

Vasant Narasimhan: Both primary endpoints were met. We showed superior major molecular response rates at week 48 for standard of care, and we also had a very favorable safety and tolerability profile with fewer EAEs, treatment discontinuations, and no new safety signals observed. So we're very excited about this data. Importantly, MMR is a good predictor of important endpoints such as PFS, OS, and EFS.

Remi brute nib, and Astra centre and gives us confidence now that we can continue that 5% growth up to 28 and as we've already guided mid single digits beyond that.

Speaker Change: So moving to slide 23.

Vasant Narasimhan: A lot of this data will be presented over the course of 2024, so you'll have a better understanding of the potential of these medicines, whether they are medicines like Remibrutinib. We've already seen the Lutathera Netter2 data, which I think is really outstanding, and hopefully, some of you have seen that potential now for Lutathera in the frontline setting. Of course, the data for Atrasensin and Optaclopan and the Sumlis data, which I've already mentioned.

Speaker Change: I want to close with just a word on ESG, which remains very much a part of the Novartis strategy and Novartis approach, we focus on innovation and access to medicines human capital in terms of our work on the.

Speaker Change: <unk> culture, as well as ensuring that we're amongst the leaders in environmental sustainability and ethical standards. When you look at our performance now we're number one in sustainability and the leaders group at MSCI and also amongst the leaders in important other benchmarks such as access to medicine, and CVP and we plan to continue that.

Vasant Narasimhan: So this data will be presented at an upcoming medical congress. We're moving rapidly towards a submission in the first half of 2024, and we'll look forward to sharing this full data set and really providing our conviction that TEMBLIX can be a multi-billion dollar medicine for Novartis. Now moving to slide 14. Lectio has continued its steady expansion in the U.S. as well as across regions.

Speaker Change: Of course in 2024.

Speaker Change: So with that on slide 24, I'll hand, it over to Harry.

Harry: Thank you very much for us good morning, and good afternoon everybody.

Vasant Narasimhan: So moving to slide seven, I just want to say a word about some of the top-line readouts we had in quarter four. Ebteklopan had another, it's a third phase three readout with a positive, positive phase three readout with clinically meaningful, insensitively significant proteinuria reduction in patients with C3G, lumbar ulnar nephropathy.

Harry: Now going to walk you through some of the financials for the fourth quarter and full year as well as provide you with our 2020 for guidance.

Harry: As always my comments refer to growth rates in constant currencies unless otherwise noted.

Harry: Also throughout the presentation I'm only going to talk about continuing operations and just as a reminder, that continue operations include retained business activities of novartis comprising of our innovative medicines business and the continued corporate activities.

Vasant Narasimhan: You can see here we delivered 123 million dollars in the quarter growth in both our international and our U.S. business. On the U.S. side, we have three thousand five hundred facilities now ordering Lectio, which is a 13 percent growth first quarter three. Fifty five percent of that business now is coming from in-office buy and bill.

Vasant Narasimhan: You see here on the left the phase two data, which we previously disclosed. In phase three, we had a study design versus placebo looking at month six before patients crossed over to Ebteklopan on both arms. We saw this really important proteinuria reduction and safety profile consistent with what we've seen in previous data, and we're currently engaged with regulatory agencies with a goal for submissions in 2024. And moving to slide 18, over the course of the year, we had positive readouts for both Iptaclopan and our newly acquired Atracentan in IGA nephropathy, clinically meaningful results here as well. Both of these programs have been reviewed with the FDA, and we're on track for submissions of these medicines that would really allow us to have, I think, a robust portfolio of medicines to bring to nephrologists for Gakibart, our anti-april antibody, also acquired in the Chinix acquisition, is also on track in its phase 3 study.

Harry: Discontinued operations include Sandoz and selected portions of corporate activities attributable to Sandoz business.

Harry: As well as certain expenses related to the spin offs.

Vasant Narasimhan: And we expect to continue to drive growth for this brand by driving depth in our key accounts, as well as expanding the buy and bill acquisition channel. Ex-US, our rollout also continues well with 29 countries with public reimbursement, and 39 countries with private coverage. We see very positive, solid early signals in China in the self-pay market, which we expect to continue over the course of 2024 ahead of a proposed NRDL list. Fahd

Harry: Next slide please.

Harry: Okay.

Harry: This chart shows you the restage its comparable numbers post to Sandoz spinoff.

Harry: I know history doesn't tell the future, but track record is important.

Harry: As you can see since 2018 topline sales growth has been 7% and average bottom line, even 14% CAGR and this has resulted in a core margin increase of 990 basis points in constant currency to 36% so very clear.

Harry: POS also from a margin standpoint to a 40% in 2027.

Harry: This strong performance has continued in 'twenty three will be met or even slightly exceeded our upgraded full year guidance.

Vasant Narasimhan: In terms of the outcome trials, we remain on track for our secondary prevention outcome studies in 2026, and we also continue to enroll our primary, Varughese, as well. Moving to slide 15. Fabhalta has now been launched in the United States, and we see, I think, very positive early launch signals, but we do expect a modest ramp for this brand, given the dynamics within the PNH market. As a reminder, we have very compelling data for this medicine, including improvements in hemoglobin transfusion avoidance, IVH, intravascular, and extravascular mollusc control, and a very clean safety profile. Our populations in our label are adults with PNH, both naive and switch patients, which was our target label for this medicine. And as an oral therapy, we think we really provide a unique offering for patients with PNH. There is a REMS requirement, but this is similar to other complement inhibitors.

Harry: On the next slide.

Speaker Change: Yes, just a little comparison here on the <unk>.

Speaker Change: <unk> shows the top line drove a 10% we guided to grow.

Basically.

Speaker Change: High single digits last one, but we upgraded three times through the year and we started with low to mid single digit.

Speaker Change: Really a testimony to the excellent business momentum that even strengthened throughout the year and then cooperating income at 18% and again here we go.

Able to upgrade three times and.

Speaker Change: Could even slightly exceed the guidance we gave in October.

Vasant Narasimhan: Moving to slide nine, we now expect our innovation momentum to continue in 2024. This will be a year of data readouts, full data readouts, and submissions, primarily for the company. We expect a few phase restarts, but importantly, as I mentioned, key data readouts, and submissions. We will keep you posted as we progress. And when you look at slide 20, this is why we have confidence as well that we'll have a steady stream of innovation to drive the company's growth beyond 2028 with the number of exciting, I think, assets we have, 24, 25, as well as the 26, 28 timeframe. This will create a steady flow of replacement power and innovation, enabling us to drive that mid single-digit growth rate beyond. Now moving to slide 21. Over the course of the year, we also signed 15 strategic deals, exits, as well as acquisitions totaling over $6 billion.

Speaker Change: Mid to high teens.

Speaker Change: On slide 27.

Speaker Change: A bit more detail about 'twenty, two 'twenty three performance, which I will go through by quarter and full year on the quarter top line growth was 10% core operating income grew 13% outlook.

Speaker Change: Outlook.

Speaker Change: October.

Vasant Narasimhan: Right now, as we look at our launch, our focus very much is coming out of ASH, getting patients on our patient support program, and getting our REMS up and running. Our first patients have already been initiated, and what we're hearing is positive ATP sentiment and interest from patients and partner groups. And our goal will be initially to focus on newly diagnosed patients, as well as patients who are not currently under full control for their hemolysis with their existing therapies. Over time, we would certainly want to expand this market. We estimate that half of patients with PNH are currently not on therapy.

Speaker Change: Quarter four of 2002 was very high profit quarter to compare to given that we were in the middle of a restructuring them and Thats why we guided.

Speaker Change: Full year, where we were.

Speaker Change: Already assuming that quarter for bottom line growth would be a little bit less than nine months bottom line growth, but still resulting in a margin improvement of one percentage points and core EPS at $1 53.

Speaker Change: So a good quarter for full year topline grew 10% and for core operating income we delivered 18% bleeding.

Speaker Change: Leading to two 4% points margin increase.

Speaker Change: <unk> was $6 47, and the full year cash flow was even more than 13 billion. Another.

Vasant Narasimhan: And with an oral agent, we have the possibility, we hope over time, to get more patients on therapy to avoid any of the subsequent sequelae associated. We're moving to slide six. As noted, in 2023, we had 10 positive phase 3 readouts with significant sales potential. You see them listed here.

Speaker Change: Significant growth also on the cash flow side.

Speaker Change: That's outlooks.

Speaker Change: Therefore, we were over our guidance.

Speaker Change: Strong full year results with also a strong quarter in absolute but of course comparison base was a bit higher now slide 28.

Vasant Narasimhan: A lot of this data will be presented over the course of 2024, so you'll have a better understanding of the potential of these medicines, whether they are medicines like Remibrutinib. We've already seen the Lutathera NETR2 data, which I think is really outstanding, and hopefully, some of you have seen that potential now for Lutathera in the frontline setting. Of course, the data for Atrasensin and Optaclopan and the Sumlis data, which I've already mentioned.

Speaker Change: So we're continuing to create significant and sustainable shareholder value.

Speaker Change: As you know we are highly cash generative business and our strong cash flow allows us to optimize both investing in the business as well as returning capital to shareholders.

In terms of investing in the business of course R&D is the key focus.

Speaker Change: In addition to.

Speaker Change: Launch and prelaunch investments and from a business development and M&A business development M&A perspective, it is value creative Bulldogs.

Vasant Narasimhan: I do want to emphasize our core approach to M&A remains bolt-on acquisitions in the sub $5 billion space, deals such as Chinook, but also many smaller deals you can see across the full landscape here, very much focused on technologies like XRNA, gene therapy, and RLT, as well as our key therapeutic areas like Chinook, amongst others. We also continue to invest in artificial intelligence on top of our collaborations with Microsoft and Palantir. We've also signed an agreement now with Isomorphic Labs of Google's DeepMind, which really allows us, I think, to be partnered with some of the most preeminent AI researchers in the world to speed up our drug discovery and drug development. They're moving to slide 22.

Our core therapeutic areas.

Speaker Change: In terms of returning capital to our shareholders to focus has been on a consistent crawling and your dividend in Swiss francs, which has not been rebased post the IPO nor to sandoz spinoff and with regard to share buybacks. We continue of course, our most recent share by.

Vasant Narasimhan: So moving to slide seven, I just want to say a word about some of the top-line readouts we had in quarter four. Eptaclopan had another, it's a third phase three readout with a positive, positive phase three readout with clinically meaningful, insensitively significant proneuria reduction in patients with C3G, lumbar ulnar nephropathy.

Speaker Change: Back of up to 15 billion announced in July 2023, with up to $12 7 billion to be executed still by the end of 2025 now we got some questions as we've talked share buyback for a few weeks of January.

Vasant Narasimhan: You see here on the left the phase two data, which we previously disclosed. In phase three, we had a study design versus placebo, looking at month six before patients crossed over to Eptaclopan on both arms. We saw this really important proneuria reduction and safety profile consistent with what we've seen in previous data, and we're currently engaged with regulatory agencies with a goal for submissions in 2024. And moving to slide 18, over the course of the year, we had positive readouts both on Iptaclopan and our newly acquired Atracentan in IGA nephropathy, clinically meaningful results here as well. Both of these programs have been reviewed with the FDA, and we're on track for submissions of these medicines that would really allow us to have, I think, a robust portfolio of medicines to bring to nephrologists for Gakibart, our anti-april antibody also acquired in the Chinix acquisition, is also on track in its phase 3 study.

Speaker Change: So we had to adjust our trading plan just to ensure everybody is clear we will restart during the next days and there is a full intention to complete that share buyback.

Speaker Change: Mentioned by the end of 2025 Beast.

Speaker Change: Besides all of that we have of course also create shareholder value shareholder value through numerous strategic actions like divesting the consumer healthcare joint venture stake spinning of icon.

Vasant Narasimhan: We did also today extend and update our midterm guidance. You'll remember at R&D Day, we had noted 22 to 27, 5% CAGR. And today, given the momentum we're seeing on our growth drivers and the strong pipeline performance we're seeing, we're extending that 5% growth guidance to 23 to 28. Now, of course, up until 28, we do have some GX impact, which I'm sure we can discuss further in the Q

Speaker Change: Divesting the Roche stake at 356 Swiss francs and of course importantly, most recently the successful completion of the spinoff Sandoz in October four last year.

Speaker Change: If you go to the next slide please.

Speaker Change: Now talking about the successful spinoff of Sandoz on.

On the day of the spin and subsequently.

Speaker Change: Novartis as well as sandoz share price.

Speaker Change: Implied market capitalizations have increased quite significantly.

Speaker Change: Since today is to spin off October 4th until yesterday, just to have the exact numbers from last last night's closing novartis market cap has increased by over 11% and sandoz over 28%. So in total as a result of to spin off and of course subsequent market movements.

Speaker Change: The combined value of over $28 billion has been created.

Vasant Narasimhan: But the momentum we're seeing in our in-market growth drivers across our base business, across each of the brands I've already discussed, as well as the positive data we've seen in Pobhalta, Semblix, Remy Brutinib, and Atracentin, gives us confidence now that we can continue that 5% growth up to 28. And as we've already guided mid-single digits beyond that. So move me to slide 23.

Speaker Change: Shareholders continuing to hold at Novartis and Sandoz sure.

Speaker Change: Again as a reminder, we are not revising our dividend post spin.

Speaker Change: Speaking of the dividend.

Speaker Change: Go to the next page, yes, we are pleased to propose the 27th consecutive dividend increase to <unk> 30 per share in U S dollars, even $3 92 and <unk>.

Speaker Change: This is based on the 320 <unk> last year, so an increase of 3% in Swiss francs, and 12% in U S dollars with a dividend yield reaching.

Vasant Narasimhan: I want to close with just a word on ESG, which remains very much a part of the Novartis strategy and Novartis approach. We focus on innovation and access to medicine, human capital in terms of our work on DEI and culture, as well as ensuring that we're amongst the leaders in environmental sustainability and ethical standards. When you look at our performance now, we're number one in sustainalytics and in the leaders group at MSDI and also amongst the leaders in important other benchmarks, such as access to medicine. We plan to continue that, of course. And so with that, on slide 24, I'll hand it over to Harry. Yeah, thank you very much, Voss. Good morning and good afternoon, everybody.

Speaker Change: Two 4%.

It's fully in line with our policy of increasing our dividend every year in Swiss francs per share without re basing it posted a sandal spin.

Speaker Change: Now moving to 2024.

Speaker Change: Our full year guidance is for sales to grow mid single digit and core operating income to grow high single digits in terms of the drivers of core Op, Inc. For 2024.

Speaker Change: Pushes and pulls are similar to 2023, and we fully expect our positive business momentum to continue.

Speaker Change: However, this prudent guidance assumes that there will be a higher generic impacts in 2024 versus 2023.

Speaker Change: We'll discuss this later on in the Q&A.

Speaker Change: For forecasting purposes, we assume no U S entresto generic entry in 2024.

Speaker Change: And to complete our full year 2024 guidance. Please note that we expect core net financial expenses to be around 0.620 point 7 billion and the core tax rate to be around 16% to 16, 5%.

Harry Kirsch: I'm now going to walk you through some of the financials for the fourth quarter and full year, as well as provide you with our 2024 guidance. As always, my comments refer to growth rates and constant currencies, unless I would otherwise not. Also, throughout the presentation, I'm only going to talk about continuing operations. And just as a reminder that continuing operations include retained business activities of Novartis, comprising our innovative medicines business and continued corporate activities. Discontinued operations include Sandoz and selected portions of corporate activities attributable to the Sandoz business, as well as certain expenses related to the spending.

Speaker Change: Now onto my final Slide let me go currencies, yes. So we have outlined some details regarding the currency impact and as you can see currencies had a negative two point impact on net sales in both quarter, four and full year as well as negative eight point impact.

Speaker Change: On core operating income for quarter four of negative seven points for the full year driven by the strong Swiss franc. There was a special effects on Corp, Inc. Quarter four right about two two points due to the mid December Argentina devaluation, and then we have to catch up basically.

Vasant Narasimhan: Over the course of the year, we also signed 15 strategic deals, exits, as well as acquisitions totaling over $6 billion. I do want to emphasize our core approach to M&A remains bolt-on acquisitions in the sub $5 billion space, deals such as Chinook, but also many smaller deals you can see across the full landscape here, very much focused on technologies like XRNA, gene therapy, and RLT, as well as our key therapeutic areas like Chinook, amongst others. We also continue to invest in artificial intelligence on top of our collaborations with Microsoft and Palantir. We've also signed an agreement now with the isomorphic labs of Google's DeepMind, which really allows us, I think, to be partnered with some of the most preeminent AI researchers in the world to speed up our drug discovery and drug development. They're moving to slide 22.

Speaker Change: Youre hyperinflation economy instructions for S guidelines.

Speaker Change: Full effect in quarter four that's two points worsening.

Speaker Change: Argentina in quarter four.

Speaker Change: January rates prevail for 2024, we expect a full year impact of currency to be less than 23.

Speaker Change: And on top line would be a negative 1%.

Speaker Change: And on the bottom line would be a negative 3% foreign currency impacts and as a reminder, we do update. This every month on our website as it is hard to forecast from the outside but you get the monthly update on it and with that I'll hand back to us.

Speaker Change: Great. Thank you Eric So in conclusion, if we go to slide 34, we had a very strong 2023 multiple guidance increases double digit growth for sales and core Op, Inc. I think really reflecting that our focused strategy as a pure play innovative medicines company is the right one and really delivering strong operational performance, we met or exceeded.

Harry Kirsch: Next slide, please. This chart shows you the restated comparable numbers post the Sandoz spin-off. I know history doesn't tell the future, but the track record is important.

Harry Kirsch: And as you can see, since 2018, top line sales growth has been 7% on average, bottom line even 14% CAGR, and this has resulted in a core margin increase of 990 basis points, in constant currency, to 36%. So, a very clear path also from a margin standpoint to 40% in 2027. This strong performance has continued in 2023 and will be met or even slightly exceeded by our upgraded full year guidelines. On the next slide.

Speaker Change: Our strategic operational and innovation targets, including the successful sandal spinoff 10 positive phase III Readouts, all with significant sales potential and we're confident in 2012 for 2024 and in the midterm, where we now guide to 5% constant currency sales, 23% to 28, and a 40% plus margin in 2020.

Speaker Change: Seven all building of course on the longer term goal to maintain that mid single digit sales growth 28 and beyond.

Speaker Change: So with that we can open the line for questions as the operator mentioned will limit to one question per for analysts and then we'll come back through the list again, thank you very much.

Harry Kirsch: Yeah, just a little comparison here on the 23 shows a top line growth of 10%. You know, we guided to grow, basically, high single digits, last one, but we upgraded three times through the year, and we started with a low to mid single digit, really a testimony to the excellent business momentum that even strengthened throughout the year and then cooperating income at 18 percent, and again, we were able to upgrade three times and could even slightly exceed the guidance we gave in October of mid to high teens. On slide 27.

Speaker Change: Thank you to ask a question. Please press star one on one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Speaker Change: We will now go to talk to ask question.

Speaker Change: And your first question comes from the line of Matthew Weston UBS. Please go ahead.

Thank you very much it's Matt Weston from UBS. My one question is around the growth in SG&A that we saw in <unk> and what it means for 2024 guidance. So there was a significant step up in commercial spending.

Speaker Change: Vas you mentioned in your opening remarks that you felt that 2024 guidance was prudent.

Harry Kirsch: A bit more detail about the 2023 performance, which we will go through by quarter and full year. On the quarter, top line growth was 10%, and co-operating income through 13%, which was forecasted in October at quarter four of 22 was a very high profit quarter to be compared to given that we were in the middle of our restructuring then, and that's why we guided to full year to where we were already assuming that quarter four bottom line growth would be a little bit less than the nine month bottom line growth but still resulting in a For the full year, the top line grew 10%, and for co-operating income, we delivered 18%, leading to a 2.4 percent points margin increase.

Speaker Change: Is the <unk> step up bringing forward or frontloading launch spend given the exciting opportunities you have in 'twenty four or is that level a good indicator of the cost acceleration, we should expect for the full year anyhow gratefully received.

Speaker Change: Thanks, Matthew I'll hand, it over to Harry Herington, Hello, Matthew.

Harry Herington: Good to have you around.

Yes, I think.

Harry Herington: Quarter four came in exactly as.

Harry Herington: As we forecasted 40 year and outline our full year guidance in October.

Vasant Narasimhan: I want to close with just a word on ESG, which remains very much a part of the Novartis strategy and Novartis approach. We focus on innovation and access to medicine, human capital in terms of our work on DEI and culture, as well as ensuring that we're amongst the leaders in environmental sustainability and ethical standards. When you look at our performance now, we're number one in sustainalytics and the leaders group at MSDI and also amongst the leaders in important other benchmarks, such as access to medicine. Peay, and we plan to continue that, of course. And so with that, on slide 24, I'll hand it over to Harry. Yeah, thank you very much, Voss. Good morning and good afternoon, everybody.

Harry Herington: So.

Harry Herington: I think what you have to keep visibility perspective, and not overreact to short term.

Harry Herington: Consensus thinking because India, and we increased our function costs and the full year of 3% in constant currencies.

With a growth of 10% on the top line.

Harry Herington: Hi.

Harry Herington: To explain maybe it was not very successful in October that quarter. Four of 2002 was a very low spreads quarter.

Harry Herington: Because we're in the middle of a big restructuring now quarter for spend is.

Harry Herington: The usual seasonality of higher spend levels.

Harry Herington: The first three quarters and 22 that was a bit muted we are back to that normal pattern.

Harry Herington: You should have no worries about our cost development for 24 hour guidance of continued margin improvement is absolutely Betsy.

Harry Herington: <unk> bulletproof.

Harry Herington: Because of our topline growth as well as our productivity programs and everything in 'twenty three came in as planned.

Harry Kirsch: Co-EPS was $6.47, and the full year cash flow was even more than $13 billion, another significant growth also on the cash flow side. As outlooks, you know, therefore, we were over our guidance and had strong full year results with a strong quarter and absolutes, but of course, the comparative base was a bit higher. Now, slide 28.

Speaker Change: Okay. Thank you many thanks indeed, thank you Mathieu next question operator.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Andrew Baum from Citi. Please go ahead.

Andrew Baum: Hi, I'm not sure if take us on the call, but some of them I'd like to take this question relating to your cardiovascular outcome trials.

Harry Kirsch: And now I will walk you through some of the financials for the fourth quarter and full year, as well as provide you with our 2024 guidance. As always, my comments refer to growth rates and constant currencies, unless I would otherwise not. Also, throughout the presentation, I'm only going to talk about continuing operations. And just as a reminder that continuing operations include retained business activities of Novartis, comprising our innovative medicines business and continued corporate activities. Discontinued operations include Sandoz and selected portions of corporate activities attributable to the Sandoz business, as well as certain expenses related to the spending.

Andrew Baum: Previously asked about.

Harry Kirsch: So we're continuing to create significant and sustainable shareholder value. As you know, we are a highly cash-generated business, and our strong cash flow allows us to optimize both investing in the business as well as returning capital to shareholders. In terms of investing in the business, of course, R&D is the key focus, in addition to launch and pre-launch investments.

Andrew Baum: Why not blind to the Orion four, particularly given the pressures from the IRI in the nine years, perhaps a price negotiation.

Andrew Baum: And also same question about horizon. These are very high risk secondary prevention patients. We know that it's highly atherogenic particles and again, you've got the same issue for nine years. So is there any possibility of either of these trials take on blinded before publicly state to date and maybe you could also opine on whether the bipartisan.

Harry Kirsch: And from a business development and M&A, business development M&A perspective, it is value-creative bolt-ons in our core therapeutic area. In terms of returning capital to our shareholders, the focus has been on a consistently growing annual dividend, which has not been rebased post the Alcorn and Sandoz spin-offs. And with regard to share buybacks, we continue, of course, our most recent share buyback of up to 15 billion announced in July 2023, with up to 12.7 billion to be executed still by the end of 2025. We have got some questions as we paused the share buyback for a few weeks in January as we had to adjust our trading. Just to ensure everybody is clear, we will restart during the next days, and it's our full intention to complete that share buyback as mentioned by the end of 2025.

Assets to try and reclassify advanced therapies.

Andrew Baum: 13 years, rather than nine year exclusivity is going to start to move its obviously very relevant given that we have.

Speaker Change: Now some specifics et cetera, many thanks, yes.

Yes. Thank you Andrew So right now Theres no plans to adjust our thought process on waiting for these studies to run to completion.

Speaker Change: I think as Dave outlined in the R&D day, we continue to believe by having longer follow up were more likely to deliver a very differentiated cardiovascular risk reduction and Orion four and I think with respect to horizon, our powering calculations and the approach that we've taken both with very high risk.

Harry Kirsch: Next slide, please. This chart shows you the restated comparable numbers posted on those spin-offs. I know history doesn't tell the future, but the track record is important.

Harry Kirsch: And as you can see, since 2018, top line sales growth has been 7% on average, bottom line even 14% CAGR, and this has resulted in a core margin increase of 990 basis points, in constant currency, to 36%. So, a very clear path also from a margin standpoint to 40% in 2027. This strong performance has continued in 2023, and will be met or even slightly exceeded our upgraded full-year guidelines. On the next slide

Speaker Change: L P little a patients as well as the kind of.

Speaker Change: Medium risk patients requires us to follow these patients out through 2025.

Speaker Change: That said, we're very cognizant of your points and we do we do this debate and discuss those especially in light of the of the IRA I think a few things we're doing first on the policy front. There is bipartisan support for an amendment on on I think the 9% to 13 on so.

Harry Kirsch: Besides all of that, we have, of course, also created shareholder value through numerous strategic actions like divesting the consumer healthcare joint venture stake, spinning off Alcon, and divesting the Roche stake at 356 Swiss francs, and, of course, importantly, and most recently, the successful completion of the spin-off Sandals on October 4th last year. Could we go to the next slide, please? Now talking about the successful spin-off of Sandoz

Speaker Change: <unk> genetically targeted therapies. However, I think it will still be some time and likely not during this year given it's an election year for that to really move forward, but we're hopeful that we can.

Harry Kirsch: Yeah, just a little comparison here on the 23 shows the top line growth of 10%. You know, we guided to grow, basically. High single digits, last one, but we upgraded three times through the year, and we started with a low to mid single digit, really a testimony to the excellent business momentum that even strengthened throughout the year and then collaborating income at 18 percent, and again, we were able to upgrade three times and could even slightly exceed the guidance we gave in October of mid to high teens. On slide 27, we have a bit more detail about the 2023 performance, which we will go through by quarter and full year. On the quarter, top line growth was 10%, and co-operating income through 13%.

Speaker Change: Progress that over the coming years to enable that to move to nine to 13, along with our broader policy goal is industry to move 913 across all small molecules. We also continued to invest in lifecycle management for our entire <unk> portfolio, we struck.

Harry Kirsch: On the day of the spin-off and subsequently, both Novartis as well as Sandals share prices and the implied market capitalization increased quite significantly. Since the day of the spin-off, October 4th, until yesterday, just to have the exact numbers from last night's closing, Novartis' market cap has increased by over 11% and Sandoz by over 28%. So in total, as a result of the spinoff and, of course, subsequent market movements, a combined value of over 28 billion has been created for shareholders continuing to hold Novartis and Sandoz shares.

Speaker Change: Leased a few deals now that really target annual dosing for S. Irna's, most recently with a company called Atlantic Therapeutics.

Speaker Change: And there we have multiple targets now that we're pursuing to try to move to annual dosing <unk> combinations with other targets that would allow us to lifecycle manage in the event that we need to ahead of that nine year timeframe. So those are the approaches we're taking but we obviously take your feed.

Speaker Change: Seriously and we'll continue to evaluate accordingly.

Speaker Change: Next question operator.

Speaker Change: E <unk>.

Speaker Change: Our next question comes from the line of Florent Susquehanna is from Societe Generale. Please go ahead.

Harry Kirsch: Outlook. In October, quarter four of 22 was a very high profit quarter to be compared to, given that we were in the middle of our restructuring then. And that's why we guided to the full year to where we were, already assuming that quarter four bottom line growth would be a little bit less than the nine month bottom line growth. But still, resulting in a marginal improvement of one percentage point and core EPS at $1.53. And so, a good quarter. For the full year, the top line grew 10%, and for co-operating income, we delivered 18%, leading to a 2.4% point margin increase. Co-EPS was $6.47.

Florent Cespedes: Good afternoon. Thank you very much for taking my question a quick one on your midterm guidance.

Harry Kirsch: Again, as a reminder, we are not rebasing our dividend post-December spin. Speaking of dividends, let's go to the next page. Yes, we are pleased to propose the 27th consecutive dividend increase to 3.30 per share in US dollars, even $3.92. And this is based on the 3.20 francs last year.

Florent: This guidance, but now starting from.

Florent Cespedes: Base from 2023 I was just wondering if there is anything new versus.

Florent Cespedes: Last updated.

Speaker Change: And if last year.

Speaker Change: And if you see less new drivers.

Harry Kirsch: So an increase of 3% in Swiss francs and 12% in US dollars, with a dividend yield reaching close to 4%. And it's fully in line with our policy of increasing our dividend every year in Swiss francs, pressure without rebasing and post-assembled spin. Now moving to 2024, our full-year guidance is for sales to grow mid-single digit and core operating income to grow high single digit.

Speaker Change: To achieve this midterm guidance. Thank you.

Yes, Thank you for and I think a few things. So first in terms of the growth drivers and what we overall saw in the quarter in quarter four and on the full year, you see very dynamic growth for Q.

Speaker Change: For his golly I think strong growth per alluded their assembly and we also saw the return as I mentioned strong demand signals for Victoza, all of which gave us confidence in those brands outlook towards our peak sales guidance. In addition, we have now the approval of a tackler Pan India, Pakistan positive about.

Harry Kirsch: In terms of the drivers of Co-op Inc. for 2024, pushes and pulls are similar to 2023, and we fully expect our positive business momentum to continue. However, this guidance assumes that there will be a higher generic impact in 2024 versus 2023. I'm sure we'll discuss this later on in the Q&A. For forecasting purposes, we assume no U.S. entrusted generic entry in 2024. And to complete our full year 2024 guidance, please note that we expect core net financial expenses to be around 0.6 to 0.7 billion and the core tax rate to be around 16 to 16.5. Now on to my final slide. Go. Currencies

Speaker Change: Also positive data across <unk>, <unk>, and the IGN, which gives us more conviction that this medicine will be a multibillion dollar of medicine as well so that I think all of us.

Harry Kirsch: And the full year cash flow was even more than $13 billion, another significant growth also on the cash flow side. As outlooks, you know, therefore, we were over our guidance and had strong full year results with a strong quarter in absolutes, but of course, the comparative base was a bit higher. Now, slide 28.

Speaker Change: On the positive side from our in line brands and then importantly, with the Assembly first line data.

Speaker Change: So I think really.

Speaker Change: We believe we will be potentially practice changing data.

Speaker Change: Has an opportunity now as well to be a multibillion dollars medicine, so taking all of that together that growth momentum for our in line brands and strong pipeline performance gave us more conviction in that in that long term guide I would also note of course. It gets galeano has also filed for.

Speaker Change: Medium and high risk women with early breast cancer. So I think all gives us positive signals and momentum to continue that 5% plus guidance after 2008.

Harry Kirsch: And from a business development and M&A, business development M&A perspective, it is value-creative bolt-ons in our core therapeutic area. In terms of returning capital to our shareholders, the focus has been on a consistent, growing annual dividend, which has not been rebased post the Alcorn and Sandoz spin-offs. And with regard to share buybacks, we continue, of course, our most recent share buyback of up to 15 billion announced in July 2023, with up to 12.7 billion to be executed still by the end of 2025. Now, we have got some questions as we paused the share buyback for a few weeks in January as we had to adjust our trading. Just to ensure everybody is clear, we will restart during the next days, and it's our full intention to complete that share buyback, as mentioned, by the end of 2025.

Speaker Change: Thank you very much next question operator.

Speaker Change: Thank you.

Harry Kirsch: Yes. So we have outlined some details regarding the currency impact. And as you can see, currencies had a negative two points impact on net sales in both quarter four and the full year, as well as a negative eight points impact on cooperating income for quarter four and negative seven points for the full year, driven by the strong Swiss.

Speaker Change: Our next question comes from the line of Graham Parry Bank of America. Please go ahead.

Great. Thanks for taking my questions.

Graham Parry: So they can tell you the number in the quarter drop off quarter on quarter, I think considering key three that you've actually seen about a 50% increase in patient starts but also there was an offsetting factor here take a patient not getting this isn't the last two days. So I was just help us with the dynamics of why that increase in patients and that you saw in Q3.

Graham Parry: It didn't translate into a higher sales number in Q4 and then on sites. I think you had said 300, so how many targeting for 2024 and given your supply unconstrained business as you know the rate limiting step to getting to the multibillion number that you've talked about for the vision indication. Thank you.

Harry Kirsch: There was a special effect on Co-op Inc. in quarter four at about two points due to the mid-December Argentina devaluation, and then we had to catch up basically to hyperflation accounting instructions, IFRS guidelines, the full effect in quarter four. So it's two points worsening due to Argentina in quarter four. If late January rates prevail for 2024, we expect the full-year impact of currencies to be less than 23, and on the top line, it would be a negative 1%, and on the bottom line, it would be a negative three percent point currency impact. And as a reminder, we do update this every month on our website as it is hard to forecast from the outside, but you get a monthly update. And with that, I'll hand it back to Bob.

Speaker Change: Yes, thanks, Graham so onto victim in quarter four we saw a steady rebuild but I think we did not see yet the full replenishment of the base of patients given that we still had supply constraints into the August July August timeline, and so over the course of quarter four we saw more patients getting on therapy, which then of course.

Harry Kirsch: Besides all of that, we have, of course, also created shareholder value through numerous strategic actions like divesting the consumer healthcare joint venture stake, spinning off Alcon, and divesting the Roche stake at 356 Swiss francs, and, of course, importantly, and most recently, the successful completion of the spin-off Sandals on October 4th last year. Can we go to the next slide, please? Now talking about the successful spin-off of Sandoz

Speaker Change: It gives us the four to six doses on those patients, which we build that base I would also say during the holiday period for.

Speaker Change: We did we did see.

Speaker Change: Less as we were expecting in the Christmas Spirit and Thanksgiving period. These patients tend not to want to have the therapy given the radiation.

Can lead to it does lead to a restriction on being around children and other loved ones. So I think those dynamics did play play a role, but we did see growth in new patient starts in Q4 versus Q3, but the growth was not.

Harry Kirsch: On the day of the spin-off, subsequently, both Novartis as well as Sundell's share price and the implied market capitalization increased quite significantly. Since the day of the spin-off, October 4th, until yesterday, just to have the exact numbers from last night's closing, Novartis' market cap has increased by over 11% and Sandoz by over 28%. So in total, as a result of the spinoff and, of course, subsequent market movements, a combined value of over $28 billion has been created for shareholders continuing to hold Novartis and Zando shares.

Harry Kirsch: Great, thank you, Harry. So in conclusion, if we go to slide 34, we had a very strong 2023 multiple guidance increase, double-digit growth for sales and core opting, I think really reflecting that our focus strategy as a pure play, innovative medicines company is the right one and really delivering strong operational performance. We met or exceeded our strategic operational and innovation targets, including the successful Sandito spin-off, 10 positive phase three readouts, all with significant sales potential. And we're confident in 2024, 2024. And in the midterm, where we now guide to 5% constant currency sales between 23 and 28, and a 40% plus margin in 2027.

Speaker Change: I think as strong as maybe what the external world predicted we had tried to guide in quarter three to the expectation that we would be to a rounded 1 billion, which is exactly where we are at that $980 million Mark.

Perhaps we should have been more clear on our outlook and expectation all of that said we of course can track. This on a daily basis, and we see strong growth in demand from the overall dynamics that we continue to expect to see robust quarter on quarter growth for Blue victory over the course of this year, giving us back towards that multibillion dollar outlook that we've guided to.

To individually population.

Speaker Change: Incentives.

Speaker Change: And center, sorry, Graham, Yes, so our goal is to get the 500 plus centers and we're expanding now rapidly.

Harry Kirsch: Again, as a reminder, we are not rebasing our dividend post-December spin. Speaking of dividends, let's go to the next page. Yes, we are pleased to propose the 27th consecutive dividend increase to 3.30 francs per share in US dollars, even 3.92, and this is based on the 3.20 francs last year.

Speaker Change: Centers are probably one one constraint and then I think the other in terms of the <unk>.

Speaker Change: Growth and so we expect to have.

Speaker Change: <unk> centers at a steady clip over the course.

Speaker Change: Of this year and then we also are encouraging physicians know that supply is unconstrained to treat earlier and so therefore, the average number of patients moves more towards six doses per patient, which will certainly be our goal over the course of the year I think both of those dynamics will fuel.

Vasant Narasimhan: All building, of course, on the longer term goal to maintain that mid single digit sales growth of 28 and beyond. So with that, we can open the line for questions. As the operator mentioned, we'll limit ourselves to one question per analyst, and then we'll come back through the list again. Thank you very much. Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.

Harry Kirsch: So an increase of 3% in Swiss francs and 12% in US dollars, with the dividend yield reaching close to 4%. And it's fully in line with our policy of increasing our dividend every year in Swiss francs. Pershier, without rebasing and post-assembled spins.

Speaker Change: Growth for this brand over the course of 2024.

Speaker Change: Okay.

Speaker Change: Thank you Brett next question operator.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of John Please now from Jpmorgan. Please go ahead.

Harry Kirsch: Now we are moving to 2024. Our full-year guidance is for sales to grow mid-single-digit and core operating income to grow high-single-digit. In terms of the drivers of Co-op Inc. for 2024, pushes and pulls are similar to 2023, and we fully expect our positive business momentum to continue. However, this guidance assumes that there will be a higher generic impact in 2024 versus 2023. I'm sure we'll discuss this later on in the Q&A. For forecasting purposes, we assume no U.S. entrusted generic entry in 2024. And to complete our full year 2024 guidance, please note that we expect core net financial expenses to be around 0.6 to 0.7 billion and the core tax rate to be around 16 to 16.5. Now on to my final slide, ago. Currencies

John: Hi, Thanks, very much for taking my question. So you said that the 2020 guidance includes the impact of generics.

John: Which we assume is fair kind of Promacta and all sorts of things So we'll see.

Operator: To withdraw your question, please press star 1 and 1 again. We will now go to our first question. And your first question comes from the line of Matthew Weston, from UBS. Please go ahead. Thank you very much.

John: Youre thinking behind actual timings of those.

John: Kinetic countries and also you also said that the 2024 kind of going to be somewhat prudent. So some of the key kind of life is that you could execute onto.

Matthew Weston: My one question is around the growth in SG&A that we saw in 4Q and what it means for 2024 guidance. So there was a significant step up in commercial spending. Vas, you mentioned in your opening remarks that you felt that 2024 guidance was prudent. Is the 4Q step-up bringing forward or front-loading launch spend, given the exciting opportunities you have in 2024? Or is that level a good indicator of the cost acceleration we should expect for the full year? Any help will be gratefully received.

John: Kind of exceed that guidance.

Speaker Change: Thank you yeah. Thanks, John So there are three three generic entries, we would expect over the course of the year, but we're not in a position I think to provide specific guidance on when these entries would happen and given the I think.

Victor ability both in terms of our own.

Speaker Change: Our goal is to defend our IP as well as supply for some of these parties. The three would be for Mac done to Cigna as you noted as well as our standards set in L. A or where there is now an approved a generic but no product in the market.

Speaker Change: We of course would provide updates when these would enter over the course of.

Harry Kirsch: Thanks, Matthew. I'll hand it over to Harry. Harry?

Harry Kirsch: Hello, Matthew. Good to have you around. Hey, I think, you know, quarter four came exactly in line with our forecast for the year and outlined our full year guidance in October. So...

Speaker Change: This year.

Speaker Change: But I think we this is our current forecast and we will see of course, how we how things evolve in terms of our full year performance area in terms of the prudent guidance, yes, John Thank you very much.

Harry Kirsch: I think we have to keep this a bit in perspective and not overreact to short-term, you know, consensus thinking. Because in the end, we increased our function cost for the full year by 3%, with a quote of 10% on top. I tried to explain, maybe I was not very successful in October, that quarter four of 22 was a very low spent quarter because we're in the middle of a big restructuring, and now quarter four spend is the usual seasonality of higher spend levels for the first three quarters. In 22, that was a bit muted.

Harry Kirsch: Yes. So we have outlined some details regarding the currency impact. And as you can see, currencies had a negative two points impact on net sales in both quarter four and the full year, as well as a negative eight points impact on co-operating income for quarter four and negative seven points for the full year, driven by the strong Swiss.

Speaker Change: We will not say when.

Speaker Change: Sure. This is all for financial forecast assumptions of course, we do appropriately defend our IP when possible of course understood. Now. They are there is no IP anymore. That's more about the ability of the generic producer to produce is a very difficult to produce product on the other hand, we have been distributed.

Speaker Change: <unk> potential entries for forecast purposes over the quarters.

Speaker Change: It is a bit of a generic portfolio play if you will.

Harry Kirsch: There was a special effect on Co-op Inc. in Quarter 4 at about 2 points due to the mid-December Argentina devaluation. And then we had to catch up basically with hyperflation accounting instructions, IFRS guidelines, the full effect in Quarter 4. So it's 2 points worsening due to Argentina in Quarter 4.

Speaker Change: And now if all of them will come a bit later.

Speaker Change: <unk>.

Speaker Change: They have an upside to our guidance. So that's what we meant with that and of course overall, we do assume that our key growth drivers continue to perform very well, but it's a bit difficult with these three different generics to make assumptions and so we do them in a prudent way and there could be.

Harry Kirsch: If late January rates prevail for 2024, we expect the full-year impact of currencies to be less than 23, and on the top line, it would be a negative 1%, and on the bottom line, it would be a negative 3% point currency impact. And as a reminder, we do update this every month on our website, as it is hard to forecast from the outside, but you get a monthly update. And with that, I'll hand it back to Bob.

Speaker Change: Changes to this if either one competitor cannot produce or we have some upside on the.

Harry Kirsch: We are back to that normal pattern, so you should have no worries about our cost development for 24. Our guidance of continued margin improvement is absolutely bulletproof because of our top line growth, as well as our productivity programs. And everything in 23 came in as planned.

Speaker Change: Patent defense, if you will on the other two.

Speaker Change: Okay, great. Thank you.

Speaker Change: Next question operator.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Tim Anderson Wolfe Research. Please go ahead.

Harry Kirsch: Great, thank you, Harry. So in conclusion, if we go to slide 34, we had a very strong 2023 multiple guidance increase, double-digit growth for sales and core opting, I think really reflecting that our focus strategy as a pure play, innovative medicines company is the right one and really delivering strong operational performance. We met or exceeded our strategic operational and innovation targets, including the successful San Diego spinoff, 10 positive phase three readouts, all with significant sales potential. And we're confident in 2024, 2024. And in the midterm, where we now guide to 5% constant currency sales between 23 and 28, and a 40% plus margin in 2027.

Tim Anderson: Thank you.

Tim Anderson: <unk> a question on pricing and market access dynamics in 'twenty forward just in the U S with multi source biosimilar humira on the market now, albeit only for six to seven months are you seeing any access tightening in 'twenty four such as Morris step edit.

Harry Kirsch: Thank you. Many thanks, indeed. Thank you, Matthew.

Operator: Next question, I Thank you. Your next question comes from the line of Andrew Baum from City. Please go ahead.

Tim Anderson: Given indications overlap.

Andrew Baum: Hi, I'm not sure if Dave's on the call, but someone might like to take this question relating to your cardiovascular outcome trials. I've previously asked about why not unblind Orion 4, particularly given the pressures from the IRA and the nine years prior to price negotiation. I'd ask the same question about Horizon.

Tim Anderson: And if not in 'twenty four and do you think it might tighten in 2025 and then also on this topic just the level of U S. Net price erosion in 'twenty four relative to what it was last year.

Yeah. Thanks, Tim.

Speaker Change: In terms of <unk>, we actually feel pretty good about overall the access environment for 2024, we've had modest gross to net.

Speaker Change: <unk> overall for the brand and we have a broader access in some of the major accounts versus what we've had in the past so we haven't seen.

Vasant Narasimhan: These are very high-risk secondary prevention patients. We know that it's a highly atherogenic particle, and again, you've got the same issue for nine years. So is there any possibility of either of these trials being unblinded before the publicly stated date?

Speaker Change: Any let's call it increased impact from Biosimilar Adalimumab. We think this is mostly because we were contracting within the IL 17 eight.

Vasant Narasimhan: And maybe you could also comment on whether the bipartisan efforts to try and reclassify advanced therapies for 13 years rather than nine years are going to start to move. It's obviously very relevant to you, given Lectio, Pellicarsen, Plavixer, et cetera. Yeah, thank you, Andrew. So right now, there are no plans to adjust our thought process on waiting for these studies to run to completion.

And given our track record in the class and large.

Speaker Change: Large position, that's enabling us to manage the overall access environment successfully have not seen to my knowledge any increase and step edits either with respect to cosmetics.

Operator: All building, of course, on the longer term goal to maintain that mid single digit sales growth of 28 and beyond. So with that, we can open the line for questions. As the operator mentioned, we'll limit ourselves to one question per analyst, and then we'll come back through the list again. Thank you very much. Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.

Speaker Change: Access I think looking forward, obviously always difficult to predict I think some of the tailwind we have going for US is the new indications in hidradenitis, which of course at least for now we're only one of a few medicines that have that indication which gives us.

Vasant Narasimhan: I think, as Dave outlined during R&D day, we continue to believe that by having longer follow-up, we're more likely to deliver very differentiated cardiovascular risk reduction in Orion IV. And I think with respect to Horizon, you know, our powering calculations and the approach that we've taken both with very high risk, LP little a patients, as well as the kind of medium risk patients, requires us to follow these patients out through 2025. That said, we're very cognizant of your point.

Speaker Change: <unk> in terms of formulary negotiation hopefully some of the other indications come through as well separate from that as well as with Concentrix. We've launched in the IV setting as well and Thats also another I think important growth driver for this medicine over the over the coming years. So overall I think pretty stable position for presenting at least for 2024 and <unk>.

Matthew Stephan Miksic: To withdraw your question, please press star 1 and 1 again. We will now go to our first question. And your first question comes from the line of Matthew Weston, from UBS. Please go ahead. Thank you very much.

Speaker Change: Of course, as we understand better 25 and beyond we'll keep everybody updated.

Speaker Change: Yes.

Moving next question Thanks, Tim.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Simon Baker. Please go ahead.

Matthew Stephan Miksic: My one question is around the growth in SG&A that we saw in 4Q and what it means for 2024 guidance. So there was a significant step up in commercial spending. Vass, you mentioned in your opening remarks that you felt that 2024 guidance was prudent. Is the 4Q step-up bringing forward or front-loading launch spend given the exciting opportunities you have in 24? Or is that level a good indicator of the cost acceleration we should expect for the full year? Any help?

Simon Baker: Thank you for taking my question.

Simon Baker: The one on Concentrix.

Simon Baker: I Wonder if you could give us your thoughts.

Simon Baker: Some of the expectation of fee uptake for <unk> in Hs.

Simon Baker: Some clients, suggesting it's slower than expected.

Simon Baker: Expected given the quality of the profile and the potency of the competition.

Vasant Narasimhan: And we do, we have this debate and discuss that, especially in light of the IRA. I think a few things we're doing first on the policy front. There is bipartisan support for an amendment on on, I think the nine to 13 on so-called genetically targeted therapy, a small molecule therapy. However, I think it will still be some time and likely not during this year, given it's an election year, for that to really move forward. But we're hopeful that we can progress that over the coming years to enable that to move to nine to 13, along with our broader policy goal as an industry to move nine to 13, across all small molecules. We also continue to invest in lifecycle management for our entire si RNA portfolio.

Simon Baker: Yes.

Simon Baker: How do you how do you see the potential in the EMEA.

Simon Baker: Over the course of the next year and we'll say thanks, so much.

Speaker Change: Yes, I think so I mean, I think it's early days. So I think I don't want to get too far ahead, but so far we've heard positive feedback overall from initiatives <unk> has an outstanding long term safety profile I think that's been well established now over many many years. It doesn't have some of the safety topics that some of our competitors.

Harry Kirsch: Gratefully received. Thanks, Matthew. I'll hand it over to Harry. Harry?

Harry Kirsch: Hello Matthew, it's good to have you around. I think, you know, quarter four came in exactly as we forecasted for the year and outlined our full year guidance in October. So. I think we have to keep this a bit in perspective and not overreact to short-term, you know, consensus thinking, because in the end, we increased our function cost by 3%, with a quote of 10% on top. I tried to explain, maybe I was not very successful in October, that quarter four of 22 was a very low-spending quarter because we're in the middle of a big restructuring. Now, quarter four spend is the usual seasonality of higher spend levels for the first three quarters, but in 22, that was a bit muted.

Speaker Change: <unk> may have and so I think that allows us to have a very strong comfort level with dermatologists for treating these patients and as well overall the efficacy I think it is solid and with the opportunity to give these patients.

Speaker Change: Space applications option and as you know the Big challenge in Hs is really getting patients to come in to be treated given that it's been so long since there have been new medicines that have been launched since the CNS it were.

Vasant Narasimhan: We have struck at least a few deals now that really target annual dosing for si RNAs, most recently with a company called Atlantic Therapeutics. And there we have multiple targets now that we're pursuing to try to move to annual dosing, or combinations with other targets that would allow us to lifecycle manage in the event that we need to ahead of that nine. So those are the approaches we're taking, but we obviously take your feedback seriously, and we'll continue to evaluate it. Next question, operator.

Indicated for this condition.

Speaker Change: I think solid early start and we'll certainly see how the quarters unfold, but I think the safety profile and the overall comfort level and dermatologists gives us a very good position for this launch.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Kerry Holford from Diamondback. Please go ahead.

Kerry Holford: A couple of questions.

Kerry Holford: Firstly just Kelly.

Kerry Holford: When do you expect.

Kerry Holford: If they come in.

Operator: Thank you. Your next question comes from the line of Florence Cespedes from Societe Generale. Please go ahead. Good afternoon.

Kerry Holford: Alright.

Kerry Holford: When they influence <unk> patent expired.

Kerry Holford: John.

Kerry Holford: Can you talk to the lifecycle management options.

Florent Cespedes: Thank you very much for taking my question. A quick one on your mid-term guidance. You have updated this guidance, but now starting from a higher base from 2023. I was just wondering if there is anything new versus the last update last year and if you see, let's say, new drivers that could help to achieve this mid-term guidance. Thank you. Yeah, thank you, Florent.

Kerry Holford: Yes.

John: And I look at the Novartis pipeline.

John: Thanks, Ken.

John: Good.

John: Any feedback you could.

John: Interest.

Ken: Please go ahead.

Ken: And then business development.

Ken: Kenny.

Over the last 12 months.

Kenny: Around the guidance of Dr. Steve again.

Kenny: Four.

Hi, Karen.

Speaker Change: Our LP Sterling.

Vasant Narasimhan: I think a few things. So first, in terms of the growth drivers and what we overall saw in the quarter, in quarter four, and for the full year, you see very dynamic growth for Kissimpta, for Kiskali, and I think strong growth for Lutathera, and Semblix. And we also saw the return of, as I mentioned, strong demand signals for Pluvicto, all of which gave us confidence in those brands' outlook towards our peak sales guidance. In addition, we now have the approval of Abtaclopan, and the Abtaclopan positive, or Fabhalta positive data across PNH, C3G, and IgAN, which gives us more conviction that this medicine will be a multibillion-dollar medicine So I think all of us were on the positive side from an inline brand point of view.

Speaker Change: And then I think in this development.

Okay.

Karen: Thanks, Gary So first one on <unk> as you know, it's not a precise science.

Harry Kirsch: Thank you. Many thanks indeed. Thank you, Matthew.

Karen: To predict.

Andrew Baum: Next question. Thank you. Your next question comes from the line of Andrew Baum from City, please go ahead. Hi, I'm not sure if Dave's on the call, but someone might like to take this question relating to your cardiovascular outcome trials. I've previously asked about why not unblind Orion 4, particularly given the pressures from the IRA and the nine years prior to price negotiation. I'd ask the same question about Horizon.

Speaker Change: For these patients I'd also noticed in the early breast cancer population. These patients are younger and tend not to be in the Medicare population. So I'd say, we really see this being a topic for because value towards the end of the decade, but importantly would only affect the portion of our sales that are in.

Speaker Change: In the Medicare Medicare population and we will of course, as we learn more and understand better how the program will unfold. We'll keep you all updated but we think we have a very good runway now for this medicine for the coming years, both in metastatic and assuming approval in the early breast cancer space in terms of lifecycle management in breast cancer.

Speaker Change: Of course the.

Speaker Change: One opportunity is other CDK targets, which we are pursuing in house and Thats something that we are looking at within our research labs as well as potential for combinations and that's another topic for us as well. We also continued to advance early stage programs with royalties and breast cancer as well not specific.

Vasant Narasimhan: And maybe you could also comment on whether the bipartisan efforts to try and reclassify advanced therapies for 13 years rather than nine years of exclusivity are gonna start to move. It's obviously very relevant to you given Lectio Pellicarsum, Plavixer, et cetera. Yeah, thank you, Andrew. So right now, there are no plans to adjust our thought process on waiting for these studies to run to completion. I think, as Dave outlined during the R&D day, we continue to believe that by having longer follow-up, we're more likely to deliver very differentiated cardiovascular risk reduction in Orion 4. And I think with respect to Horizon, you know, our powering calculations and the approach that we've taken both with very high-risk LP little a patients as well as the kind of medium-risk patients require us to follow these patients out through 2025. That said, we're very cognizant of your point.

Vasant Narasimhan: And then importantly, with the Semblix first line data, where we saw, I think, really, what we believe will be potentially practice changing data, this has an opportunity now as well to be a multibillion dollar medicine. So taking all of that together, that growth momentum for our inline brands and strong pipeline performance gave us more conviction in that in that long-term guide. I would also note, of course, Kiskali is now also filed for medium and high risk women with early breast cancer. So I think this gives us positive signals and momentum to continue that 5% plus guidance at. Thank you very much. Next question, operator.

Speaker Change: Lifecycle, mastering golly, but give us the opportunity to bring forward radio ligand therapies in the breast cancer space and that's an area of high focus for us at the moment. So I think the combination of novel.

Speaker Change: Targets in small molecules as well as radio ligand therapies.

Speaker Change: The breast cancer overall in the breast cancer space. So in terms of business development as outlined in the slide you know our strategy is very much to focus on our four core therapeutic areas and our three key technology platforms.

Speaker Change: So this technology platforms, our cell therapy, slash immune reset cell and gene therapies, such immune reset our LTE and RNA therapeutics and I think that's well known and in terms of size of deal no change to our overall approach smaller than $5 billion of bolt on acquisitions, but the vast majority.

Operator: Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead and take my question. So it's on Plovicto.

Graham Parry: So the number in the quarter was a drop off quarter on quarter, I think in Q3, you've actually seen about a 50% increase in patient starts. But also, there was an offsetting factor here of sicker patients not getting the sort of last two doses. So I was just helpless with the dynamics why that increase in patients you saw in Q3 didn't translate into a higher sales number in Q4. And then on sites, I think you'd said, so how many are you targeting for 2024? And given your supply is unconstrained, is this actually now the rate-limiting step to getting to the multibillion number that you've talked about for the vision indication? Thank you. Yeah, thanks, Graham.

Speaker Change: <unk> of those deals being sub 1 billion dollar deals and no change to our approach there from what we've previously stated.

So moving next.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.

Seamus Fernandez: Thanks very much so.

Seamus Fernandez: Just wanted to ask one particular question in terms of the sort of business business development strategy I know you've already talked about this but I wanted to get a little bit more clarity on.

Seamus Fernandez: Specifics.

Seamus Fernandez: Round, the sort of threshold that you've talked about publicly.

Seamus Fernandez: Is that sort of $5 billion and below threshold really still kind of the target range or given the success that you are seeing.

Seamus Fernandez: Seeing and some of the other areas of development.

Vasant Narasimhan: So on Plavicto in quarter four, we saw a steady rebuild, but I think we did not yet see the full replenishment of the base of patients, given that we still had supply constraints into the August, well, July, August timeline. And so over the course of quarter four, we saw more patients getting on therapy, which then, of course, gives us the four to six doses on those patients, which rebuilds that base. I would also say during the holiday period, we did, [inaudible] and Center. Sorry, Graham.

Seamus Fernandez: And is there the opportunity to potentially go.

Seamus Fernandez: Larger.

Seamus Fernandez: In terms of the potential transactions just wanted to get a better sense.

Seamus Fernandez: Do you feel there is more flexibility given the phase III solid phase III hit rate that that you've had or if youre kind of sticking to your guns are to your knitting and the $5 billion in south range.

Vasant Narasimhan: But we're hopeful that we can progress that over the coming years to enable that to move to nine to 13, along with our broader policy goal as an industry to move nine to 13 across all small molecules. We also continue to invest in lifecycle management for our entire si RNA portfolio. We've struck at least a few deals now that really target annual dosing for si RNAs, most recently with a company called Atlantic Therapeutics.

Speaker Change: Yes, Thanks, Seamus, so really nothing I think to add beyond what I've already already stated I mean, we of course look at the full range as you would expect a company of our size a full range of potential opportunities within business development, but we consistently see as the opportunities we have whether it's the most significant.

Vasant Narasimhan: Yes. So our goal is to get to 500 plus centers, and we're expanding now rapidly. I think centers are probably one constraint.

Vasant Narasimhan: And then I think the other, in terms of growth, and so we expect to have, you know, the advertising centers at a steady clip over the course of this year. And then we also are encouraging physicians now that supply is unconstrained to treat patients earlier. So, therefore, the average number of patients moves more towards six doses per patient, which will certainly be our goal over the course of the year. I think both of those dynamics will fuel growth for this brand over the course of the year. Thank you. Next question, operator?

Speaker Change: Unity for value creation, as well as a differentiated view versus the market is on the lower end of the range of deal value. So I think that's why when you look at the 15 plus deals that we did last year vast majority are under $1 billion or even under 500 million we did chinook.

Vasant Narasimhan: And there we have multiple targets now that we're pursuing to try to move to annual dosing and or combinations with other targets that would allow us to life cycle manage in the event that we need to ahead of that nine. So those are the approaches we're taking, but we obviously take your feedback seriously, and we'll continue to evaluate it. Next question, operator.

$3 1 billion and I think that's where we see the best opportunities for us.

Speaker Change: As a company.

Speaker Change: I will never exclude that we would do anything if it makes sense for our shareholders. It makes sense for the long term profile of Novartis, but our focus is very much on that bolt on sub fives up to $1 billion range programs and Thats, where I think we will be.

Florent Cespedes: Thank you. Your next question comes from the line of Florent Cespedes from Societe Generale. Please go ahead. Good afternoon.

Speaker Change: So moving to the next question. Thanks Seamus.

Vasant Narasimhan: Thank you very much for taking my question. A quick one on your mid-term guidance. You have updated this guidance, but now starting from a higher base from 2023. I was just wondering if there is anything new versus the last update last year and if you see, let's say, new drivers that could help to achieve this mid-term guidance. Thank you. Yeah, thank you, Florent.

Operator: Thank you. Your next question comes from the line of John Prusner from JP Morgan. Please go ahead.

Seamus Fernandez: Thank you.

Seamus Fernandez: Next question comes from the line of Emily Field Barclays. Please go ahead.

Emily Field: Thank you for taking my question just a question on branding.

John Prusner: Hi, thanks very much for taking my question. So you said that the 2024 guidance includes the impact of generics, which we assume is for kind of promactor and also singer. So what are your thinking behind the actual timings of those generic entries?

Emily Field: How far along are you.

Emily Field: Ms trial.

Emily Field: Other partial clinical hold on the space and then.

Emily Field: Just remind us how your molecule with spectra Im sure Kevin.

Speaker Change: We can see that phase three.

Vasant Narasimhan: I think a few things. So first, in terms of the growth drivers and what we overall saw in the quarter, in quarter four, and for the full year, you see very dynamic growth for Kissimta, for Kiscali, and I think strong growth for Lutathera, and Semblic. And we also saw the return of, as I mentioned, strong demand signals for Pluvicto, all of which gave us confidence in those brands' outlook towards our peak sales guidance. In addition, we now have the approval of Optaclopan, and the Optaclopan positive, or Fabhalta positive data across PNH, C3G, and IGAN, which gives us more conviction that this medicine will be a multi-billion dollar medicine So that, I think, was all on the positive side from an inline brand.

Thank you guys. Thank you.

Kevin: Yes, Thanks, Emily So Remi, Bruce let me start with the why we think our molecule is differentiate when you look at the structure and if you go back to some of our slides on R&D day, you'll see that our our molecule.

Speaker Change: Different overall chemo type structure than some of the other peers, we believe that the liver signals that have been seen thus far in this in this group of medicines has.

Vasant Narasimhan: And also, you also said that the 2024 guidance could be somewhat prudent. So what are some of the key kind of levers that you could execute on to kind of exceed that guidance? Thank you. Yeah, thanks, John. So there are three generic entries we would expect over the course of the year, but we're not in a position, I think, to provide specific guidance on when these entries would happen, given the, I think, unpredictability, both in terms of our own goals to defend our IP, as well as supply for some of these parties. The three would be from ACTA and Cigna, as you noted, as well as a standard satin LAR where there is now an approved generic, but no product in the market.

It has to do with off target toxicities are related to the structure of the molecule. So we have a highly potent.

<unk> inhibitor covalent PTK inhibitor that we think is unique and it's at least so far and our clinical and preclinical work profile in terms of having any of those off target toxicities.

Vasant Narasimhan: And then importantly, with Semblic's first line data, where we saw, I think, really, what we believe will be potentially practice changing data, this has an opportunity now as well to be a multi-billion dollar medicine. So taking all of that together, that growth momentum for our inline brands and strong pipeline performance gave us more conviction in that in that long-term guide. I would also note, of course, Kiscali is now also filed for medium and high risk women with early breast cancer. So I think this gives us positive signals and momentum to continue that 5% plus guidance at. Thank you very much. Next question, operator.

Speaker Change: So we are of course already have read out two positive phase III studies in CSU and plan to file with the 52 week data in the second half of this year, we continue to pursue as well revenue brewed nib in other immunology indications, where we think there is an opportunity given a safe profile and importantly.

Speaker Change: At that dose range 25 milligrams PID we saw.

Vasant Narasimhan: We, of course, would provide updates when these would enter into effect over the course of this year. But, you know, I think this is our current forecast, and we'll see, of course, how we evolve. Now, in terms of our full-year performance, Harry, in terms of prudent guidance. Yeah, John, thank you very much. I mean, we will not say when we assume it is all for financial forecast assumptions. Of course, we do appropriately defend our IP when possible. Of course, on standard satin LAR, there is no IP anymore. That's more about the ability of the generic producer to produce. It's a very difficult to produce product.

Speaker Change: No liver signals in those in those dermatology studies in terms of the MS trials, we continue to recruit on track. However, we don't expect a filing before 2026, if I'm not mistaken.

Speaker Change: And we did have a futility analysis looking at futility for.

Speaker Change: Non inferiority to our comparator and we pass that futility analysis of the program will continue so we don't see any safety signals.

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

Speaker Change: As a futility analysis, which we put in place given some of the data that some of our peers have read out and we'll continue to that's progressive study in multiple sclerosis, as well, we do believe Remy Bruton them has the opportunity to be a significant medicine across a range of indications, particularly as the safety profile continues to hold up.

Vasant Narasimhan: It's on Plavicto, so the number in the quarter was a drop off quarter on quarter. I think you said in Q3 that you'd actually seen about a 50% increase in patient starts, but also, there was an offsetting factor here of sicker patients not getting the sort of last two doses. So that would just help us with the dynamics why that increase in patients you saw in Q3 didn't translate into higher sales numbers in Q4. And then on sites, I think you said 300.

Harry Kirsch: On the other hand, we have distributed these three potential entries for forecast purposes over the quarters. There's a bit of a generic portfolio play, if you will. And now, if all of them come a bit later, you know, then we may have an upside to our guidance. So that's what we meant with that. And of course, overall, we do assume that our key growth drivers continue to perform very well. But it's a bit difficult with these three different generics to make assumptions. And so we do them in a prudent way. And there could be changes to this if either one competitor cannot produce or we have some upside on the LOE and patent defense, if you will, on the other. Great Clay, thank you.

Speaker Change: The structure of the medicine.

Speaker Change: Thanks, Emily next question operator.

Speaker Change: Your next question comes from the line of Peter Welford from Jefferies. Please go ahead.

Peter Welford: Hi, Thanks for taking my question, just curious I want to come back to Pakistan, you sort of had some more cautious commentary perhaps than you might have expected for a few.

Vasant Narasimhan: So how many are you targeting for 2024? And given your supply is unconstrained, is this actually now the rate-limiting step to getting to the multibillion number that you've talked about for the vision indication? Thank you. Yeah, thanks, Graham.

Peter Welford: New launch.

Peter Welford: If you could just talk a little bit about.

Peter Welford: You say relate very specific to the <unk> market.

Peter Welford: Perhaps why you have more confidence that you're potentially cant get into some of those currently untreated patients sooner or does it reflect the rent and the initial program and perhaps.

Peter Welford: But youll see getting this in front of doctors through the process.

Harry Kirsch: Next question. Thank you. Your next question comes from the line of Tim Anderson, Wolf Research. Please go ahead.

Peter Welford: In vintage and I guess, how does that and the profile of the drug in the tools read into the potential rollout to the larger indications potentially in the future. Thank you.

Timothy Anderson: Thank you. On Cosentyx, a question on pricing and market access dynamics in 24, just in the U.S. with multi-source similar from here on the market now, albeit only for six to seven months. Are you seeing any access tightening in 24, such as more step edits, given indication overlap? And if not in 24, then do you think it might tighten in 2025?

Peter Welford: Hey.

Speaker Change: Yeah. Thanks, Peter So first of all on PMA is it very much the uptake very much has to do with the rems as well as some of the other elements that needs to be place, particularly of vaccinations and so it just takes time to put in place for this medicine as well as our organization getting the infrastructure fully up and running we estimate seven to 8000 patients with <unk> in the United.

Speaker Change: States roughly three to 4000 of them being treated today and so in such an ultra rare patient population as well you have a relatively high dispersion of physicians, who are treating one or two patients. But also takes time to reach all of these positions. It doesn't change our long term belief that this.

Vasant Narasimhan: So I think those dynamics did play a role. But we did see growth in new patient starts in Q4 versus Q3. But the growth was not, you know, I think as strong as maybe what the external role was.

Vasant Narasimhan: And also on this topic, just the level of U.S. net price erosion in 24 relative to what it was last year? Yeah, thanks, Tim. In terms of cosensics, we actually feel pretty good about the overall access environment for 2024. We've had modest growth to net shifts overall for the brand, and we have broader access in some of the major accounts versus what we've had in the past. So we haven't seen any, let's call it, increased impact from biosimilars or adalimumab. We think this is mostly because we were contracting within the IL-17a class. And given our track record in the class and our large position that's enabling us to manage the overall access environment successfully, we have not seen, to my knowledge, any increase in step edits either with respect to cosensics access.

Vasant Narasimhan: We had tried to guide in quarter three to the expectation that we would be to a rounded billion, which is exactly where we are at 980 million. Perhaps we should have been more clear on our outlook and expectations. All of that said, we of course contract this on a daily basis, and we see strong growth and demand problems in the overall dynamic. We continue to expect to see robust quarter-on-quarter growth for Plovito over the course of this year, getting us back towards that multibillion-dollar outlook that we've guided to in the vision and Chen Qiu and centers. Sorry, Graham.

Speaker Change: As can become the medicine of choice for these patients given it's a twice a day safe oral medicine with high efficacy and I think.

Speaker Change: A reasonable safety profile overall and that will just take time as we get physicians up to speed either patients in a position where they need to switch because they are uncontrolled overtime, even controlled patients. We would argue I would want them to switch and then new starts as well and then we do make efforts already to try to reach that half of the estimated.

Speaker Change: The patient population, which is currently untreated.

Speaker Change: So we just wanted to set reasonable expectations for the first year, but then we hope to ramp up thereafter.

Speaker Change: Do think that given our positioning in <unk> and <unk> already also being an ultra rare disease.

Speaker Change: Again, we target refractory patients again, but given that we're targeting we're very select patient population. We think we can absolutely manage the patient start process for those patients and then ensure very strong uptake for the medicine and then if you look at the future indications for fab Halter largely also in the ultra rare space, which will.

Vasant Narasimhan: Now, I think looking forward, obviously, always difficult to predict. I think some of the tailwinds we have going for us are the new indications in hydroadenitis, which, of course, at least for now, we're only one of a few medicines that have that indication, which gives us strength in terms of formula and negotiation. Hopefully, some of the other indications come through as well. Separately from that, as well as with cosensics, we've launched it in the IV setting as well. And that's also another, I think, important growth driver for this medicine over the next few years. So overall, I think a pretty stable position for Kacentyx, at least for 2024. And, of course, as we understand better about 25 and beyond, we'll keep everybody up. Moving on to the next question. Thanks, Tim.

Vasant Narasimhan: Yes. So our goal is to get to 500 plus centers, and we're expanding now rapidly. I think centers are probably one constraint.

Speaker Change: I think as we build that capability, we should be able to get patients on therapy sustainably over time.

Vasant Narasimhan: And then I think the other, in terms of growth, and so we expect to have the ad centers at a steady clip over the course of this year. And then we also are encouraging physicians now that supply is unconstrained to treat patients earlier. So, therefore, the average number of patients moves more towards six doses per patient, which will certainly be our goal over the course of the year. I think both of those dynamics will fuel growth for this brand over the long term. Thank you. Next question, operator?

Speaker Change: Thanks, Peter next question operator.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Richard Parkes from BNP, probably about please go ahead.

Richard Parkes: Hi, Thank you for taking my question is just following up on business development strategy.

Richard Parkes: Quite clear the last 18 months and are very confident about growth through upcoming alloys for the business overall, but you still will have to absorb.

Richard Parkes: Since specific therapeutic categories, and we're obviously thinking about and trust.

John Prusner: Thank you. Your next question comes from the line of John Prusner from JP Morgan. Please go ahead.

Richard Parkes: So when you look at your cardiovascular franchise given that maybe.

Vasant Narasimhan: Hi, thanks very much for taking my question. And you said that the 2024 guidance includes the impact of generics, which we assume is for kind of promata and also singer. So what are your thinking behind the actual timings of those generic entries?

Richard Parkes: And a bit slower and our costs on the sales.

Clinical risk.

Richard Parkes: So you've got enough coming through.

Richard Parkes: Okay.

Operator: Thank you. Your next question comes from the line of Simon Baker, Redburn. Please go ahead. Thank you for taking my question. And it's another one on Cosentyx.

Richard Parkes: Maintaining a healthy franchise.

Richard Parkes: Any kind of negative leverage.

Richard Parkes: Alright.

Richard Parkes: Is that an area where you would.

Richard Parkes: Look to may be more active in terms of business development to bring in later stage products. Thank you.

Simon Baker: I wonder if you could give us your thoughts on the expectation of the uptake for Cosentyx in HS. I've had some clients suggesting it's slower than expected, given the quality of the profile and the paucity of the competition. How do you see the potential and the uptake there over the course of the next year or so? Thanks so much. Yeah, thanks. I mean, I think it's early days.

Vasant Narasimhan: And also, you also said that the 2024 guidance could be somewhat prudent. So what are some of the key kind of levers that you could execute on to kind of exceed that guidance? Thank you. Yeah, thanks, John. So there are three generic entries we would expect over the course of the year, but we're not in a position, I think, to provide specific guidance on when these entries would happen, given the, I think, unpredictability, both in terms of our own goals to defend our IP as well as supply for some of these parties. The three would be from ACTA and Cigna, as you noted, as well as Astana Satin LAR, for which there is now an approved generic but no product in the market.

Speaker Change: Yes, Thanks, Richard we feel very confident with what we have in house and cardiovascular disease. When you look at it we have let Vito in secondary prevention, and then moving to primary prevention as well we have pellet Carson DLP.

Speaker Change: <unk> program you have a program called <unk>, which we are currently moving forward in mid stage studies in hypertension, and heart failure as well as an oral version of X xb as well <unk> one agonist that we're also bringing forward and as I've noted we have an extensive in house <unk>.

Vasant Narasimhan: So I think, you know, I don't want to get too far ahead. But so far, we've heard positive feedback overall from clinicians. I mean, Cosentix has an outstanding long-term safety profile, I think that's been well established now for many, many years, doesn't have some of the safety issues that some of our competitors may have. And so I think that allows us to have a very strong comfort level with dermatologists for treating these patients.

Speaker Change: EMEA effort targeting a range of lipid lowering cardiovascular targets as well as external collaborations that we've also now brought on board, which we think allows us to cover most of the key targets, which would be of interest for <unk> and our goal is one to move to new targets too.

Operator: And as well, overall, the efficacy, I think, is solid, and with the opportunity to give these patients a safe and effective option. And as you know, the big challenge in HS is really getting patients to come in to be treated, given that it's been so long since there have been new medicines that have been launched since the TNFs were indicated for this condition. So I think a solid early start, and we'll certainly see how the quarters unfold, but I think the safety profile and the overall comfort level of dermatologists give us a very good position. Thank you. Your next question comes from the line of Kerry Holford from Barenburg. Please go ahead. Oh, thank you. A couple of questions for me, please.

Speaker Change: To move to combinations and three also to get to annual dosing, which we think is the right strategy in cardiovascular disease in the long run or other companies are pursuing oral and fully understand that but we believe that in this space given the compliance challenge over the long run that's been demonstrated over decades, having infrequently in Missouri administered.

Vasant Narasimhan: We, of course, would provide updates when these would enter into effect over the course of this year. But, you know, I think this is our current forecast, and we'll see, of course, how we evolve. Now, in terms of our full year performance, Harry, in terms of the prudence guidance. Yeah, John, thank you very much. I mean, we will not say when we assume it is all for financial forecast assumptions. Of course, we do appropriately defend our IP when possible. Of course, on Zandu Satin LAR, there is no IP anymore. That's more about the ability of the generic producer to produce. It's a very difficult to produce product.

Speaker Change: Irna's on validated targets is the right strategy, so given all of that and the efforts that we have ongoing we feel very comfortable with our internal cardiovascular portfolio and pipeline.

Speaker Change: Next question operator.

Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Your next question.

Speaker Change: Comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.

Mark Purcell: Yes, thanks for taking my question.

Mark Purcell: Sorry, sorry.

Mark Purcell: So you can help us understand the growth that makes him mdx leadership means, especially in light of the ex U S acceleration. So what do you what do you think about B cell <unk> sure.

Kerry Holford: Firstly, Kiskali, when do you expect that drug to become eligible for price negotiation under IRA? And given we're moving towards heading up hadn't expiry 2031. Can you talk about the life cycle management options available to you here?

Harry Kirsch: On the other hand, we have distributed these three potential entries for forecast purposes over the quarters. It's a bit of a generic portfolio play, if you will. And now, if all of them come a bit later, you know, then we may have an upside to our guidance. So that's what we meant with that. And of course, overall, we do assume that our key growth drivers continue to perform very well. But it's a bit difficult with these three different generics to make assumptions. And so we do them in a prudent way. And there could be changes to this if either one competitor cannot produce, or we have some upside on the LOE and patent defense, if you will, on the other term. Very great, Clay; thank you.

Mark Purcell: How does it how does the ex U S share compared to the U S, where we get data from Roche and then when I look to the MBR leadership footnote.

Vasant Narasimhan: when I look at the Novartis pipeline, I see a few breast cancer-specific assets, but perhaps I'm wrong. Any feedback you could give there, any areas of interest, would be gratefully received. And then business development. Clearly, you've been somewhat busy over the last 12 months.

Mark Purcell: Seven out of 10 markets. It just tighter on file.

Mark Purcell: Help us understand I guess why are infusions of more of a bearish.

Mark Purcell: To treatment and some ex U S markets versus the U S, where youre, where youre SaaS tons relative to the alternative.

Vasant Narasimhan: What's your appetite for deals moving into 2024? Size, Therapeutic Category, is RLT still an area of focus, M&A, Business Development? Thank you very much. Thank you. Thanks, Kerry.

Mark Purcell: Infused therapy in this space and then just a housekeeping on kit Kat in the <unk> filing did you include negative patients and that filing thanks very much.

Vasant Narasimhan: So first, Cascali, as you know, it's not a precise science to predict IRA for these patients. I'd also notice in the early breast cancer population, these patients are younger and tend not to be in the Medicare population. So I'd say we really see this being a topic for Cascali towards the end of the decade, but importantly, it would only affect the portion of our sales that are in the Medicare population. And we'll, of course, as we learn more and understand better how the program will unfold, we'll keep you all updated. But we think we have a very good runway now for this medicine for the coming years, both in metastatic and, assuming approval, in the early breast cancer space. In terms of lifecycle management and breast cancer, of course, the one opportunity is other CDK targets, which we are pursuing in house. And that's something that we are looking at in our research laboratories, as well as the potential for combinations. And that's another topic for us as well.

Speaker Change: Yes, Thanks, Brooks so to Scully, yes, no negative patients were included.

Speaker Change: So firstly on the ex U S dynamics I think first it's important to note outside of the U S. You don't have the same structure as part B four.

Speaker Change: Providing an infused medicine and in many of these health care systems.

Speaker Change: Preference to move patients out of the medical centres and medical homes and more having at home therapies. So in those key markets, we really see a dynamic I don't know the specific sure offhand, but we see a dynamic where we are being a favorite class of medicines in some of.

Tim Anderson: Thank you. Your next question comes from the line of Tim Anderson, Wolf Research. Please go ahead.

Vasant Narasimhan: Thank you. On Cosentyx, a question on pricing and market access dynamics in 24, just in the U.S., with multi-source similar to Humira on the market now, albeit only for six to seven months, are you seeing any access tightening in 24, such as more step edits given indication overlap? And if not in 24, then do you think it might tighten in 2025?

Speaker Change: The large ex U S markets.

Speaker Change: Very strong performance in markets like Germany, very strong performance in markets like Japan.

Speaker Change: And so I think that's really just a reflection of different dynamics in those markets, where there's a preference for neurologists to provide patients a medicine, that's easy for at home use and we hope over time as we now move cause them to more broadly across Europe and Asia, we have the opportunity to drive significant growth ex U S. In the U S.

Vasant Narasimhan: We also continue to advance early stage programs with RLTs in breast cancer as well, not specifically lifecycle management in Cascali, but giving us the opportunity to bring forward radioligand therapies in the breast cancer space. And that's an area of high focus for us at the moment. So I think a combination of novel targets in small molecules, as well as radioligand therapies in breast cancer overall in the breast cancer space.

Speaker Change: There is different dynamics right now we estimate that the Bcl class share of <unk> in the mid 50% range, 55% and over time, we expect that to continue to grow.

Speaker Change: Cause symptoms of share within the B cell class is in the high twenty's, 27% to 30% depending on when you look at.

Speaker Change: We right now are growing with the visa class overall, but very much our goal over time is to grow our share of the B cell class and that's something we're very much focused on.

Speaker Change: That will take time for us to achieve but that's going to be important if we want to get well beyond the $4 billion guidance. We've already given we think we can get to the $4 billion just by the March of the B cell class, but if we want to do better we need to improve our b cell class share in the U S and that's something we're definitely focused on.

Vasant Narasimhan: So in terms of business development, as Alan shows on the slide, our strategy is very much to focus on our four core therapeutic areas and our three key technology platforms. So those technology platforms are cell therapy slash immune reset, cell and gene therapy slash immune reset, RLT, and RNA therapeutics. And I think that's, that's well, well known.

Speaker Change: Thank you.

Speaker Change: Next question operator.

Vasant Narasimhan: And given our track record in the class and our large position that's enabling us to manage the overall access environment successfully, we have not seen, to my knowledge, any increase in step edits either with respect to cosensics access. Now, I think looking forward, obviously, it is always difficult to predict. I think some of the tailwinds we have going for us are the new indications for hydroadenitis, which, of course, at least for now, we're only one of a few medicines that have that indication, which gives us strength in terms of formula and negotiation. Hopefully, some of the other indications come through as well. Separate from that, as well as with Cosensics, we've launched in the IV setting as well. And that's also another, I think, important growth driver for this medicine over the So overall, I think a pretty stable position for Kacentyx, at least for 2024. And of course, as we understand better 25 and beyond, we'll keep everybody up. Moving next question. Thanks, Jim.

Speaker Change: Your next.

Speaker Change: Question comes from the line of Stephen Scott out from TD Cowen. Please go ahead.

Vasant Narasimhan: And in terms of the size of the deal, no change to our overall approach of smaller than $5 billion bolt-on acquisitions, with the vast majority of those deals being sub $1 billion deals, and no change to our approach there from what we've previously stated. So moving next. Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.

Stephen Scott: Thank you very much I'm curious what happens with Entresto IRI price negotiation in 2026, when generics can launch in 2025. It would seem that if there were an entresto generic then interest there would not be eligible for price negotiation is that how you see it and has that.

Stephen Scott: Come up in price negotiations so far.

Yes, then the best case, it would seem for Novartis would be limited generic competition may be even an authorized which could turn out to be a plus for interest in revenue. Thank you.

Operator: Thanks very much. So I just wanted to ask one particular question in terms of the, you know, sort of business development strategy. I know, Voss, you've already talked about this, but I wanted to get a little bit more clarity on specifics around the sort of thresholds that you've talked about publicly, you know, is that sort of $5 billion and below threshold really still kind of the target range, or given the success that you are seeing in some of the other areas of development? Is there the opportunity to potentially go, you know, larger in terms of the potential transactions? Just wanted to get a better sense of if you feel there's more flexibility, given the solid phase three hit rate that you've had, or if you're kind of sticking to your guns or to your knitting in the $5 billion and south range. Yeah, thanks, Seamus.

Speaker Change: Thanks, Steve So it is it is.

Speaker Change: A valid point and our position would be if there is a generic that's launched that our medicine and our portfolio for the current.

Speaker Change: The guidance of the <unk> would not be eligible at that point in time, so that would be our view, but I think as you know.

Speaker Change: There's many things that are still unfolding with respect to the IRS negotiation I, obviously can't comment on R.

Speaker Change: Our approach to the various generic entrants in our approach on how to manage that I would say that look for entresto, even beyond in the U S. We guide to this 2025 and 2025.

Simon Baker: Thank you. Your next question comes from the line of Simon Baker, Redburn. Please go ahead. Thank you for taking my question. And it's another one on Cosentix.

Speaker Change: And IRA if we were to move not have a generic entering 2025, we would be eligible.

Speaker Change: Eligible in early 2026, or one way or another we are gonna have entresto.

Vasant Narasimhan: I wonder if you could give us your thoughts on the expectation of the uptake for Cosentix in HS. I've had some clients suggesting it's slower than expected, given the quality of the profile and the paucity of the competition. How do you see the potential and the uptake there over the course of the next year or so? Thanks so much. Yeah, thanks. I mean, I think it's early days.

Speaker Change: Being impacted in this period of time.

Speaker Change: It is important to note as we guide to 5% plus 20% to 22% to 28 growth, even with Entresto coming out in the U S and also coming out in Europe, given the timeline of our RTP in Europe. So I think we feel confident we can grow well well beyond the entresto low or.

Seamus Fernandez: So really, I think, to add beyond, you know, what I've already stated. I mean, we, of course, look at the full range, as you would expect a company of our size, the full range of potential opportunities within business development. But what we consistently see is that the opportunities we have, where there's the most significant opportunity for value creation, as well as a differentiated view versus the market, are on the lower end of the range of deal values. I think that's why when you look at the 15 plus deals that we did last year, the vast majority are under a billion or even under 500 million; we did Chinook for 3.1 billion.

Speaker Change: However, it ultimately happens in that period.

Speaker Change: Next question operator.

Speaker Change: Thank you.

Your next question comes from the line of Matthew Weston UBS. Please go ahead.

Matthew Stephan Miksic: Thank you very much thanks for taking the follow up it's a follow up on <unk>.

Matthew Stephan Miksic: I think J P. Morgan.

Matthew Stephan Miksic: At the R&D day, you highlighted CSMA full filing in 2020 for now it's the second half of 2024. So can you give us an update has anything changed and also can you just give us an update on your discussions with regulators I know theres been a lot of discussion about the.

Vasant Narasimhan: And as well, overall, the efficacy, I think, is solid and with the opportunity to give these patients a safe and effective option. And as you know, the big challenge in HS is really getting patients to come in to be treated, given that it's been so long since there have been new medicines that have been launched since the TNFs were indicated for this condition. So I think a solid early start, and we'll certainly see how the quarters unfold, but I think the safety profile and the overall comfort level of dermatologists give us a very good position. Thank you. Your next question comes from the line of Kerry Holford from Barenburg. Please go ahead. Oh, thank you. A couple of questions for me, please.

Vasant Narasimhan: And I think that's where we see the best opportunities for us as a company. I will never exclude that we would do anything if it makes sense for our shareholders, it makes sense for the long-term profile of Novartis. But our focus is very much on that bolt-on sub five, sub two $1 billion range programs. And that's where I think we'll be. Moving to the next question. Thanks, Jamie.

Matthew Stephan Miksic: Muddled control arm given the significant crossover.

Matthew Stephan Miksic: Can you give investors comfort that you are still confident that it will be acceptable to FDA and regulators around the world.

Speaker Change: Yeah. Thanks, Matthew So we don't have any updates as the trial continues to accrue events I mean based on our current estimates we think the second half of 2020 for filing is.

Speaker Change: The right timeline to provide at this point in time, but of course this will evolve as we as the events accrue.

Vasant Narasimhan: Thank you. Your next question comes from the line of Emily Field, Barclays. Please go ahead. Hi, thanks for taking my question. Just a question on Remy Brutonov.

Matthew Stephan Miksic: Our confidence of nothing has changed when you look at the overall data set that you saw last year you saw a very impressive gains.

Kerry Holford: Firstly, Kiz Kali, when do you expect that drug to become eligible for price negotiation under IRA? And given we're moving towards heading up hadn't expiry 2031. Can you talk about the life cycle management options available to you here?

Matthew Stephan Miksic: In our PFS you saw impressive gains.

Emily Field: How far along are you in the recruitment of the MS trials, just given we've seen another partial clinical hold in the space? And then, if you could just remind us how your molecule is differentiated given that, you know, we did see that phase three failure after your R&D day. Thank you. Yeah, thanks, Emily. So, you know, on Remy Brutal, let me start with why we think our molecule is differentiated.

Matthew Stephan Miksic: You saw high quality of life improvement.

Matthew Stephan Miksic: A relatively clean safety profile, even versus a RPI comparator arm. So I think a positive safety profile. Overall. So we think we have a very compelling case, we think it's really a matter of getting that to the higher resolution. Both in terms of the adjusted analysis, where were already below a hazard ratio.

Vasant Narasimhan: when I look at the Nevadis pipeline, I see a few breast cancer-specific assets, but perhaps I'm wrong in any feedback you could give there, any areas of interest would be gratefully received, and then business development. Kelly, who's been somewhat busy over the last 12 months.

Vasant Narasimhan: What's your appetite for deals moving into 2024? Saiz, everybody can't agree. Is RLT still an area of focus, M&A, business development? Finnegan.

Matthew Stephan Miksic: One as well as a tighter radius around the all comers analysis as well for the OS.

Vasant Narasimhan: When you look at the structures, and if you go back to some of our slides in R&D Day, you'll see that our molecule has a different overall chemotype structure than some of the other peers; we believe that the liver signals that have been seen thus far in this group of medicine have to do with off-target toxicities related to the structure of the molecule. So we have a highly potent BTK inhibitor, a covalent BTK inhibitor, that we think is unique and it's at least so far in a clinical and preclinical work profile in terms of having any of those off-target effects. We, of course, already have read out two positive phase three studies in CSU and plan to file with the 52-week data in the second half of this year. We continue to pursue remibrutinib in other immunology indications where we think there is an opportunity given its safe profile. And importantly, at that dose range, 25 milligrams BID, we saw no liver signals in those dermatology studies.

Matthew Stephan Miksic: And so this will be of course, a topic of discussion with the FDA, but we think we can make very very clear and compelling case that this medicine should be offered to patients in the pre taxing setting and.

Vasant Narasimhan: Thanks, Kerry. So first on Cascali, as you know, it's not a precise science to predict IRA for these patients. I'd also notice in the early breast cancer population, these patients are younger and tend not to be in the Medicare population. So I'd say we really see this being a topic for Cascali towards the end of the decade, but importantly, it would only affect the portion of our sales that are in the Medicare population. And we'll, of course, as we learn more and understand better how the program will unfold, keep you all updated. But we think we have a very good runway now for this medicine for the coming years, both in metastatic and, assuming approval, in the early breast cancer space. In terms of lifecycle management and breast cancer, of course, the, you know, one opportunity is other CDK targets, which we are pursuing in-house. And that's something that we are looking at within our research labs, as well as the potential for four combinations. And that's another topic for us as well.

Matthew Stephan Miksic: And then we also are continuing as I mentioned to move forward rapidly on P. SMA edition as well as.

Matthew Stephan Miksic: <unk> in the metastatic setting so we can cover all of our basis I do think overall as an industry, we'll learn more with some of the upcoming AD com on from other competitor medicines on how the FDA is thinking about OS crossover and how to manage this.

Matthew Stephan Miksic: And I'm hopeful that overall patient benefit is what ultimately rules out over.

Matthew Stephan Miksic: Some of the statistical pure pure statistical considerations given that we are encouraged to utilize crossover in our studies to be patient friendly.

Matthew Stephan Miksic: In an appropriate way I think it's very important we start to be looking at the adjusted analyses otherwise this puts the overall the industry in a very challenging position.

Speaker Change: Next question operator.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Graham Parry Bank of America. Please go ahead.

Speaker Change: Okay.

Graham Parry: Thanks for taking the follow up I, just wanted to dig into some of the moving parts for the guide on generics.

Graham Parry: It made sense at a high level comments that that's in terms of the.

Vasant Narasimhan: In terms of the MS trials, we continue to recruit on track. However, we don't expect a filing before 2026, if I'm not mistaken, and we did have a futility analysis looking at a futility for non-inferiority to our comparator and we passed that futility analysis so the program will continue so we don't see any safety signals we've passed a futility analysis which we put in place given some of the data that some of our peers have read out and we'll continue then to progress the study in multiple sclerosis as well we do believe remibrutinib has the opportunity to be a significant medicine across a range of indications particularly as the safety profile continues to hold up because of the structure, Thanks, Emily. Next question, operator.

Vasant Narasimhan: We also continue to advance early stage programs with RLTs in breast cancer as well, not specifically, you know, lifecycle management because Cascali would give us the opportunity to bring forward radioligand therapy in the breast cancer space. And that's an area of high focus for us at the moment. So I think a combination of novel targets in small molecules, as well as radioligand therapies in breast cancer overall in the breast cancer space.

Graham Parry: The ability to manufacture is I've seen that Sandra statin El Al I think Teva gotten approval.

Graham Parry: And that is not a restriction in legal one is is there any standing litigation around manufacturing, even if the yen.

And there isn't around the approval or is that a tech ops consideration.

Graham Parry: And then on <unk> I believe there is no litigation outstanding you have a salt patent in 2026, what are the moving parts for timing of the launch there and it's a 2025 26 loans from Promacta, even we will say still a possibility. Thank you.

Vasant Narasimhan: So in terms of business development, as Alan shows on the slide, our strategy is very much to focus on our four core therapeutic areas and our three key technology platforms. So those technology platforms are cell therapy, slash immune reset, cell and gene therapy, slash immune reset, RLT, and RNA therapeutics. And I think that's, that's well, well known.

Speaker Change: Thanks Pam.

Speaker Change: On the on standards then there is no litigation ongoing I think and I can't comment on other companies' manufacturing capabilities I think what we did observe in Europe with the launch of generics as there was limited supply available.

Speaker Change: Available for those launches given the complexity of the manufacturing.

Speaker Change: And we believe that that's a complexity as well that would still it would be the case in the U S. This is a very difficult medicine to consistently.

Speaker Change: <unk> characterized and release.

Speaker Change: Obviously.

Speaker Change: For the approved generic so it's ultimately determined so we'll be monitoring to see.

Vasant Narasimhan: Thank you. Your next question comes from the line of Peter Welford from Jeffreys. Please go ahead. Hi, thanks for taking my question. I'm just curious; I wanted to come back to Fabhauser in Takapan.

Speaker Change: How and when that product comes to market and then what volumes and in the meantime, as well I mean, we very much are focused on her alluded there are frontline data, where we I think presented really compelling.

Vasant Narasimhan: And in terms of the size of the deal, no change to our overall approach of smaller than $5 billion bolt-on acquisitions, with the vast majority of those deals being sub $1 billion deals. And no change to our approach there from what we've previously stated. So moving next.

Operator: You sort of had some more cautious commentary, perhaps, than you might expect for a new launch. I wonder if you could just talk a little bit about whether this, as you say, relates very specifically to the PNH market? And perhaps, you know, why are you perhaps more confident that you potentially can't get into some of those currently untreated patients sooner? Or does it reflect the REMS and the initial program and perhaps impediments you're seeing getting this in front of doctors and through the process than perhaps you envisaged?

Speaker Change: Data to make lewd at their other medicine frontline medicine of choice.

Speaker Change: Already on label, we're already promoting that to two physicians, making sure physicians understand the datasets that we've now generated with the net or two that gives us an opportunity as well to maintain our neuroendocrine tumor business with respect to promacta not much more I can I can add we of course.

Seamus Fernandez: Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead. Thanks very much.

Speaker Change: Continued to defend our IP and will do so and try to maintain the medicines protection for as long.

Vasant Narasimhan: So I just wanted to ask one particular question in terms of the, you know, sort of business development strategy. I know, Voss, you've already talked about this, but I wanted to get a little bit more clarity on specifics around the sort of thresholds that you've talked about publicly, you know. Is that sort of $5 billion and below threshold really still kind of the target range, or given the success that you are seeing in some of the other areas of development, is there the opportunity to potentially go, you know, larger in terms of the potential transactions? Just wanted to get a better sense of if you feel there's more flexibility, given the solid phase three hit rate that you've had, or if you're kind of sticking to your guns or to your knitting in the $5 billion and south range. Yeah, thanks, Seamus.

Peter Welford: And I guess, how does that and the profile of the drug, if at all, read into the potential rollout for the larger IgAN indication potentially in the future? Thank you. Yeah, thanks, Peter. So first on PNH, it very much has to do with the REMS, as well as some of the other elements that need to be put in place, particularly vaccinations.

Speaker Change: As possible, but at this point in time I can't provide any further details of our guidance on promacta for forecasting purposes, we're saying a generic entry in 2024, but as always we defend our IP.

Speaker Change: 6% possible.

Speaker Change: Moving to the last question operator.

Thank you your last question for today comes from the line of Tim Anderson Wolfe Research. Please go ahead.

Tim Anderson: Thank you so much.

Vasant Narasimhan: And so this takes time to put in place for this medicine, as well as our organization getting the infrastructure fully up and running. You know, we estimate 7,000 to 8,000 patients with PNH in the United States, roughly 3,000 to 4,000 of them being treated today. And so in such an ultra rare patient population as well, you have a relatively high dispersion of physicians who are treating one or two patients. It also takes time to reach all of these patients. It doesn't change our long-term belief that this can become the medicine of choice for these patients, given it's a twice-a-day safe oral medicine with high efficacy and, I think, a reasonable safety profile overall, and that will just take time as we get physicians up to speed, either patients in the position where they need to switch because they're uncontrolled over time, even controlled patients, we would argue, would want to be switched, and then new starts as well, and then we do make efforts already to try to reach that half of the estimated half of the patient population.

Tim Anderson: Obesity I think you've been asked this before but quite possibly the biggest therapeutic category do you guys have a big presence in cardio metabolic how high of a priority is it to enter the space. There are acquirable assets in clinical development, they fall into that sub $5 billion range why.

Tim Anderson: Not move on one of them can't late entrant products still capture revenues are no longer really just too far ahead to justify the cost of a competitive development program.

Vasant Narasimhan: There's really nothing I think to add beyond what I've already stated. I mean, we, of course, look at the full range, as you would expect a company of our size, the full range of potential opportunities within business development. But what we consistently see is the opportunities we have, where there's the most significant opportunity for value creation, as well as a differentiated view versus the market, are on the lower end of the range of deal values. And I think that's why when you look at the 15 plus deals that we did last year, the vast majority are under a billion or even under $500 million; we did Chinook at $3.1 billion.

Yeah. Thanks, Tim So look when we think about the obesity market, we very much look at it in the lens of our presence in cardiovascular disease and wanting to ensure we have a presence that enables future cardiovascular drugs, we have in our pipeline to either be combinable or available to patients with.

Tim Anderson: The full range of cardiac cardiovascular disease, So certainly something we're evaluating and looking at our current view is that given the number of companies already pursuing injectable and oral G. L. P. G IP top.

Tim Anderson: Assets that we should be focused on differentiated assets that have novel targets novel approaches novel profiles, which is what we look at in research but of course, we evaluate all the opportunities that are currently out there given the size of this market and the importance for cardiovascular health. So obviously, if we file.

Vasant Narasimhan: So we just want to set reasonable expectations for the first year, but then we hope to ramp it up thereafter. We do think that, given our positioning in C3G and IgAN, C3G already being an ultra-rare disease, and we target refractory patients, again, given that we're targeting a very select patient population, we think we can absolutely manage the patient start process for those patients and then ensure a very strong uptake for the medicine. And then if you look at the future indications for Fabhalta, largely in the ultra-rare space, which will then, I think, as we build that capability, we should be able to get patients on therapy sustainably. Thank you, Peter. Next question, operator.

Vasant Narasimhan: And I think that's where we see the best opportunities for us as a company. I will never exclude that we would do anything if it makes sense for our shareholders, and it makes sense for the long-term profile of Novartis. But our focus is very much on those bolt-on sub 5, sub 2, $1 billion range programs. And that's where I think we'll be. Moving to the next question. Thanks, Jamie.

Speaker Change: And something of interest, we'll pursue it but at the moment I can't really say anything specific about anything we're looking at.

Speaker Change: Perfect. Thanks, everyone for joining we look forward to keeping you updated over the course of the year and wish everyone.

Speaker Change: It's a 2024.

Speaker Change: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Emily Field: Thank you. Your next question comes from the line of Emily Field, Barclays. Please go ahead. Hi, thanks for taking my question. Just a question on Remy Brutonib.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Vasant Narasimhan: How far along are you in the recruitment of the MS trials, just given we've seen another partial clinical hold in the space? And then, if you could just remind us how your molecule is differentiated given that, you know, we did see that phase 3 failure after your R&D day. Thank you. Yeah, thanks, Emily. So, you know, on Remy Brutal, let me start with why we think our molecule is differentiated. When you look at the structures, and if you go back to some of our slides in R&D Day, you'll see that our molecule has a different overall chemotype structure than some of the other peers; we believe that the liver signals that have been seen thus far in this group of medicine. Have to do with off-target toxicities related to the structure of the molecule.

Okay.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: So we have a highly potent Btk inhibitor, a covalent Btk inhibitor that we think is unique, and it's at least so far in a clinical and preclinical work profile in terms of having any of those off-target effects. We, of course, already have read out two positive phase three studies in CSU and plan to file with the 52-week data in the second half of this year. We continue to pursue remibrutinib in other immunology indications where we think there is an opportunity given its safe profile. And importantly, at that dose range, 25 milligrams BID, we saw no liver signals in those dermatology studies.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: Thank you. Your next question comes from the line of Richard Parkes from BNP Paribas. Please go ahead.

Speaker Change: Yes.

Richard Parkes: Hi, thank you for taking my question. It's just following up on the business development strategy. I mean, it's been quite clear over the last 18 months that you are now very confident about growth through upcoming LOEs for the business overall, but you still will have to absorb LOEs in specific therapeutic categories in order to be thinking about Entresto. So when you look at your cardiovascular franchise, given that let's say it's maybe been a bit slower and a cast on this. Clinical risk

Okay.

Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Vasant Narasimhan: In terms of the MS trials, we continue to recruit on track. However, we don't expect a filing before 2026, if I'm not mistaken, and we did a futility analysis looking at futility for non-inferiority to our comparator, and we passed that futility analysis, so the program will continue. So we don't see any safety signals.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: Are you comfortable you've got enough coming through to maintain a healthy franchise and not have any kind of negative leverage post that? Or is that an area where you would look to maybe be more active in terms of business development to bring in later stage products? Thank you. Thanks, Richard. We feel very confident with what we have in-house in cardiovascular disease.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Vasant Narasimhan: We've passed a futility analysis which we put in place given some of the data that some of our peers have read out, and we'll continue to progress the study in multiple sclerosis as well. We do believe remubrutinib has the opportunity to be a significant medicine across a range of indications, particularly as the safety profile continues to hold up because of the structure of the drug. So thanks, Emily. Next question, operator

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: When you look at it, we have LECVO in secondary prevention and then moving to primary prevention as well. We have Pellicarson, the LP little program; we have a program called XXB, which we are currently moving forward in mid-stage studies in hypertension and heart failure, as well as an oral version of XXB as well as an NPR1 agonist that we're also bringing forward. And as I've noted, we have an extensive in-house siRNA effort targeting a range of lipid-lowering and cardiovascular targets, as well as external collaborations that we've also now brought on board, which we think allows us to cover most of the key targets which would be of interest for siRNAs. And our goal is, one, to move to new targets, two, to move to combinations, and three, also to get to annual dosing, which we think is the right strategy for cardiovascular disease in the long run.

Speaker Change: Yes.

Peter Welford: Thank you. Your next question comes from the line of Peter Welford from Jeffreys. Please go ahead. Hi, thanks for taking my question. I'm just curious; I wanted to come back to Fabhauser in Takapan.

Speaker Change: Okay.

Speaker Change: Yes.

[music].

Thanks.

Speaker Change: Okay.

Vasant Narasimhan: You sort of had some more cautious commentary, perhaps, than you might expect for a new launch. I wonder if you could just talk a little bit about whether this, as you say, relates very specifically to the PNH market? And perhaps, you know, why are you perhaps more confident that you potentially can't get into some of those currently untreated patients sooner? Or does it reflect the REMS and the initial program and perhaps impediments you're seeing getting this in front of doctors and through the process than perhaps you envisaged? And I guess, how does that and the profile of the drug, if at all, read into the potential rollout for the larger IGAN indication in the future? Thank you. Yeah, thanks, Peter. So first on PNH, it very much has to do with the REMS, as well as some of the other elements that need to be put in place, particularly vaccinations.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Vasant Narasimhan: Of course, other companies are pursuing orals, and we fully understand that. But we believe that in this space, given the compliance challenge over the long run that's been demonstrated over decades, having infrequently administered siRNAs on validated targets is the right strategy. So given all of that and the efforts that we have ongoing, we feel very comfortable with our internal cardiovascular portfolio. Next question, operator. Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1 on your telephone keypad.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: And so this takes time to put in place for this medicine, as well as our organization getting the infrastructure fully up and running. You know, we estimate 7,000 to 8,000 patients with PNH in the United States, roughly 3,000 to 4,000 of them being treated today. And so in such an ultra rare patient population as well, you have a relatively high dispersion of physicians who are treating one or two patients, it also takes time to reach all of these. It doesn't change our long-term belief that this can become the medicine of choice for these patients, given it's a twice-a-day safe oral medicine with high efficacy and, I think, a reasonable safety profile overall, and that will just take time as we get physicians up to speed, either patients in the position where they need to switch because they're uncontrolled over time, even controlled patients, we would argue, would want to be switched, and then new starts as well.

Speaker Change: So.

Speaker Change:

[music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

[music].

Operator: Your next question: Comments from the line of Mark Purcell from Morgan Stanley, please go ahead. Yeah, thanks for taking my question. On Cosympter, Faz, hopefully you can help us understand the growth dynamics here and what MBRX leadership means, especially in light of the Ex-US acceleration. So when you think about B-cell, MBRX share, how does the Ex-US share compare to the US, where we get data from Roche? And then when I looked at the MBRX leadership footnote in 7 out of 10 markets, it just said data on file. So could you help us understand, I guess, where infusions are more of a barrier to treatment in some non-US markets versus the US, and where your share stands relative to the alternative infused therapy in this space? And then just the housekeeping.

Speaker Change: Okay.

Speaker Change: [music].

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

[music].

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: And then we do make efforts already to try to reach that half of the estimated half of the patient population. So, we just want to set reasonable expectations for the first year, then we hope to ramp it up thereafter. We do think that given our positioning in C3G and C3G already being an ultra-rare disease, again, we target refractory patients. Again, given that we're targeting a very select patient population, we think we can absolutely manage the patient start process for those patients and then ensure a very strong uptake for the medicine. And then if you look at the future indications for Fabhalta, largely in the ultra-rare space, which will then, I think, as we build that capability, we should be able to get patients on therapy sustainably. Thank you, Peter. Next question, operator.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

[music].

Speaker Change: Yes.

Speaker Change: Okay.

Mark Purcell: On Kiskale and the NAFLI filing, did you include any negative patients in that filing? Thanks very much. Yes, thanks, Mark. So Kaskali, yes, no negative patients were included. On Kasympta, so first on the ex-US dynamics, I think first, it's important to note outside of the US, you don't have the same structure as Part B for providing an infused medicine. And in many of these healthcare systems, there's a preference to move patients out of medical centers and medical homes and more toward having at-home therapies.

Speaker Change: [music].

Speaker Change: So.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Vasant Narasimhan: So in those key markets, we really see a dynamic. I don't know the specific shares off hand, but we see a dynamic where we are a favored class of medicine in the large ex-US markets. We have very strong performance in markets like Germany and very strong performance in markets like Japan, and so I think that's really just a reflection of different dynamics in those markets, where there's a preference for neurologists to provide patients with a medicine that's easy for at-home use.

Speaker Change: Okay.

Vasant Narasimhan: Thank you. Your next question comes from the line of Richard Parks from BNP Paribas. Please go ahead.

Richard Parks: Hi, thank you for taking my question. It's just following up on the business development strategy. I mean, it's been quite clear over the last 18 months that you are now very confident about growth through upcoming LOEs for the business overall, but you still will have to absorb LOEs in specific therapeutic categories in order to be thinking about Entresto. So when you look at your cardiovascular franchise, given that let's say it's maybe been a bit slower and a cast on this. Are you comfortable you've got enough coming through to maintain a healthy franchise and not have any negative leverage post that? Or is that an area where you would look to maybe be more active in terms of business development to bring in later stage products? Yeah, thanks, Richard. We feel very confident with what we have in-house for cardiovascular disease.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: Yes.

Speaker Change: Okay.

Vasant Narasimhan: And we hope over time, as we now move Cosimta more broadly across Europe and Asia, we have the opportunity to drive significant growth ex-US. In the US, there are different dynamics. Right now, we estimate that the B-cell class share of NBRX is in the mid 50% range, at 55%. And over time, we expect that to continue to grow. Cosimta's share within the B-cell class is in the high 20s, 27 to 30%, depending on when you look.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Vasant Narasimhan: And we are growing with the B-cell class overall right now. But very much, our goal over time is to grow our share of the B-cell class. And that's something we're very much focused on. That will take, I think, time for us to achieve, but that's gonna be important if we wanna get well beyond the $4 billion guidance we've already given. We think we can get to $4 billion just by the march of the B-cell class, but if we wanna do better, we need to improve our B-cell class share in the US, and that's something we're definitely. Thank you. Next question operator:

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Okay.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Yes.

Okay.

Speaker Change: Yes.

Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Operator: Thank you. Your next question comes from the line of Stephen Scala from TD Cowan. Please go ahead.

Speaker Change: [music].

Stephen Scala: Oh, thank you very much. I'm curious what happens with Entresto IRA price negotiation in 2026 when generics can launch in 2025. It would seem that if there were an Entresto generic, then Entresto would not be eligible for price negotiation. Is that how you see it?

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Vasant Narasimhan: And has that come up in price negotiations so far? If yes, then the best case it would seem for Novartis would be limited generic competition, maybe even an authorized generic, which could turn out to be a plus for Entresto revenue. Thank you. Yeah, thanks, Steve. So it is a valid point.

Vasant Narasimhan: Of course, other companies are pursuing orals, and we fully understand that. But we believe that in this space, given the compliance challenge over the long run that's been demonstrated over decades, having infrequently administered siRNAs on validated targets is the right strategy. So given all of that and the efforts that we have ongoing, we feel very comfortable with our internal cardiovascular portfolio and, Next question, operator. Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1 on your telephone keypad.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: And, you know, our position would be if there is a generic that's launched, the medicine in our portfolio, per the current guidance of the IRA, would not be eligible at that point in time. So that would be our view. But I think, as you know, there are many things that are still unfolding with respect to the IRA negotiations. I obviously can't comment on our approach to the various generic entrants and our approach to how to manage that. I would say that, you know, look for Entresto, even beyond in the US. We guide to this 2025, mid 2025 LOE, and an IRA. If we were to move, not have a generic entry in 2025, we would be IRA eligible in early 2026.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Thanks.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Mark Purcell: Your next question. Coming from the line of Mark Purcell from Morgan Stanley, please go ahead. Yeah, thanks for taking my question. On Cosympter, Faz, hopefully you can help us understand the growth dynamics here and what MBRX leadership means, especially in light of the ex-US acceleration. So when you think about B-cell, MBRX share, how does the ex-US share compare to the US, where we get data from Roche? And then when I looked at the MBRX leadership footnote in 7 out of 10 markets, it just said data on file. So could you help us understand, I guess, where infusions are more of a barrier to treatment in some ex-US markets versus the US, and where your share stands relative to the alternative infused therapy in this space? And then just the housekeeping.

Speaker Change: Sure.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: [music].

Yes.

Speaker Change: Okay.

Speaker Change: Alright.

Speaker Change: [music].

Vasant Narasimhan: So one way or another, we are going to have Entresto being impacted in this period of time. What is important to note is we guide to 5% plus 2023 to 28 growth, even with Entresto coming out in the US and also coming out in Europe, given the timeline of our RDP in Europe. So I think we feel confident we can grow well, well beyond the Entresto LOE or IRA. However, it ultimately happens. Next question operator.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Speaker Change: [music].

Speaker Change: Yes.

[music].

Operator: Thank you. Your next question comes from the line of Matthew Weston, UBS. Please go ahead. Thank you very much.

Speaker Change: Okay.

Matthew Weston: Thanks for taking the follow-up. It's a follow-up on Plavicto. Vas, I think at J.P. Morgan and at R&D Day, you highlighted the PSMA IV filing in 2024. Now it's the second half of 2024.

Speaker Change: Thanks.

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Vasant Narasimhan: Can you give investors comfort that you're still confident that it will be acceptable to FDA and regulators around the world? Thanks, Matthew. So we don't have any updates as the trial, you know, continues to accrue events. I mean, based on our current estimates, we think a second half 2024 filing is the right timeline to provide at this point in time. But of course, you know, this will evolve as we as the events accumulate. In terms of our confidence level, nothing has changed.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Yes.

[music].

Speaker Change: Okay.

Vasant Narasimhan: When you look at the overall data set that you saw last year, you saw very impressive gains. In our PFS, you saw impressive gains in ORR, you saw a high quality of life improvement, and a relatively clean safety profile, even versus the ARPI comparator arm. So I think that overall, we have a positive safety profile.

Speaker Change: Okay.

[music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: So we think we have a very compelling case; we think it's really a matter of getting to higher resolution, both in terms of the adjusted analysis, where we're already below a hazard ratio of one, as well as a tighter radius around the all-comers analysis as well for the OS. And so this will be, of course, a topic of discussion with the FDA, but we think we can make a very clear and compelling case that this medicine should be offered to patients in the pre-taxing setting. And then we also are continuing, as I mentioned, to move forward rapidly on PSMA addition, as well as Pluvicto in all metastatic settings, so we can cover all of our bases.

Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: On Kiskale and the NAFLI filing, did you include any negative patients in that filing? Thanks very much. Yes, thanks, Mark. So, Kaskali, yes, no negative patients were included. On Kasympta, so first on the ex-US dynamics, I think first it's important to note, outside of the US, you don't have the same structure as Part B for providing an infused medicine. And in many of these healthcare systems, there's a preference to move patients out of medical centers and medical homes and more into having at home therapists.

Speaker Change: Okay.

[music].

Speaker Change: Hum.

Speaker Change: Tom.

Vasant Narasimhan: I do think overall, as an industry, we'll learn more with some of the upcoming advertising comms, from other competing medicines, on how the FDA is thinking about OS crossover and how to manage this. And I'm hopeful that overall patient benefit is what ultimately rules out some of the statistical, pure, pure statistical considerations given that we are encouraged to utilize crossover in our studies to be patient-friendly in an appropriate way. I think it's very important we start to look at the adjusted analysis. Otherwise, this puts the overall industry in a very challenging position. Next question, operator.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Vasant Narasimhan: So in those key markets, we really see a dynamic. I don't know the specific shares offhand, but we see a dynamic where we are being a favored class of medicine. We have very strong performance in markets like Germany and very strong performance in markets like Japan, and so I think that's really just a reflection of different dynamics in those markets, where there's a preference for neurologists to provide patients with a medicine that's easy for at-home use.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Operator: Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead. Okay, thanks. Thanks for taking the call.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Graham Parry: I just wanted to dig into some of the moving parts for the guide on generics and make some sort of high-level comments there, but in terms of the ability to manufacture, I assume that's a standard stat in LAR, I think Teva got an approval in December, but is that a restriction, a legal one? So is there any sort of litigation around manufacturing, even if there isn't around the approval, or is that a tech ops consideration there?

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Right.

Vasant Narasimhan: And we hope over time, as we now move Cosimta more broadly across Europe and Asia, we have the opportunity to drive significant growth ex-US. In the US, there are different dynamics. Right now, we estimate that the B-cell class share of NBRX is in the mid-50% range, at 55%. And over time, we expect that to continue to grow. Cosimta's share within the B-cell class is in the high 20s, 27% to 30%, depending on when you look.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Vasant Narasimhan: And then on Promacta, I believe there's no litigation outstanding. You have a SALT patent in 2026, so what are the moving parts for timing of a launch there, and is a 2025 or 26 launch on Promacta even still a possibility? Thank you. Yeah, thanks, Graham. On sandastatin, there is no litigation ongoing, I think, and I can't comment on other companies' manufacturing capabilities. However, I think what we did observe in Europe with the launch of generics is that there was limited supply available for those launches, given the complexity of the manufacturing. And we believe that that's a problem as well; that would still be the case in the US.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Okay.

Speaker Change: Yes.

Vasant Narasimhan: And we right now are growing with the B-cell class overall, but our goal over time is to grow our share of the B-cell class. And that's something we're very much focused on. That will take time for us to achieve, but that's going to be important if we want to get well beyond the $4 billion guidance we've already given. We think we can get to $4 billion just by the march of the B-cell class, but if we want to do better, we need to improve our B-cell class share in the US, and that's something we're definitely working on. Thank you. Your next question comes from the line of Stephen Scala from TD Cowan. Please go ahead.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

[music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: This is a very difficult medicine to make, characterize, and release, but obviously that's for the approved generic to ultimately determine. So we'll be monitoring to see how and when that product comes to market and in what volumes. And in the meantime, as well, we are very much focused on our Lutathera frontline data, where we, I think, presented really compelling data to make Lutathera the medicine, the frontline medicine of choice. It's already on label. We're already promoting that to physicians and making sure physicians understand the data set that we've now generated with the NETR2, and that gives us an opportunity as well to maintain our neuroendocrine tumor business. With respect to Primacta, there is not much more I can add.

Speaker Change: Yes.

Speaker Change: [music].

Stephen Willey: Oh, thank you very much. I'm curious what happens with Entresto IRA price negotiation in 2026 when generics can launch in 2025. It would seem that if there were an Entresto generic, then Entresto would not be eligible for price negotiation. Is that how you see it?

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Thanks.

Speaker Change: Yes.

Sure.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Vasant Narasimhan: And you know, our position would be if there is a generic that's launched, the medicine in our portfolio, per the current guidance of the IRA, would not be eligible at that point in time. So that would be our view. But I think, as you know, there are many things that are still unfolding with respect to the IRA negotiations. I obviously can't comment on our approach to the various generic entrants and our approach to how to manage that. I would say that, you know, look for Entresto, even beyond in the US. We guide to this 2025, mid 2025 LOE, and an IRA. If we were to move, not have a generic entry in 2025, we would be IRA eligible in early 2026.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Okay.

Yes.

Speaker Change: Okay.

Speaker Change: Thank you.

Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Vasant Narasimhan: So one way or another, we are going to have Entresto being impacted in this period of time. What is important to note is we guide to 5% plus 2022 23 to 28 growth, even with Entresto coming out in the US and also coming out in Europe, given the timeline of our RDP in Europe. So I think we feel confident we can grow well, well beyond the Entresto LOE or IRA. However, it ultimately happens. Next question operator.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Vasant Narasimhan: We, of course, continue to defend our IP, and we'll do so and try to maintain the medicine's protection for as long as possible, but at this point in time, I can't provide any further details or guidance on Primacta. For forecasting purposes, we're saying a generic entry in 2024, but as always, we defend our IP to the fullest. Moving to the last question, Operator.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: Okay.

Matthew Stephan Miksic: Thank you. Your next question comes from the line of Matthew Weston, UBS. Please go ahead. Thank you very much.

Operator: Thank you. Your last question for today comes from the line of Tim Anderson, Wolf Research. Please go ahead.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Timothy Anderson: Thank you so much. Obesity, I think you've been asked this before, but quite possibly the biggest therapeutic category, you guys have a big presence in cardiometabolic. How high of a priority is it to enter this space? There are acquirable assets in clinical development. They fall into that sub $5 billion range. Why not move on one of them? Can't late entrant products still capture revenues? Or are vulnerabilities just too far ahead to justify the cost of a competitive development program?

Speaker Change: Yes.

Speaker Change: Okay.

Vasant Narasimhan: Thanks for taking the follow-up. It's a follow-up on Plavicto. Vass, I think at J.P. Morgan and at R&D Day, you highlighted the PSMA IV filing in 2024. Now, it's the second half of 2024.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

[music].

Vasant Narasimhan: So can you give us an update? Has anything changed? And also, can you just give us an update on your discussions with regulators? I know there's been a lot of discussion about the modeled control arm, given the significant crossover. Can you give investors comfort that you're still confident that it will be acceptable to FDA and regulators around the world? Thanks, Matthew.

Speaker Change: Okay.

Vasant Narasimhan: Yeah, thanks, Tim. So look, when we think about the obesity market, we very much look at it in the lens of our presence in cardiovascular disease and want to ensure we have a presence that enables future cardiovascular drugs we have in our pipeline to either be combined or available to patients with the full range of cardiovascular diseases. So certainly something we're evaluating and looking at. Our current view is that given the number of companies already pursuing injectable and oral GLP, and GIP top assets, we should be focused on differentiated assets that have novel targets or novel approaches, or novel profiles, which is what we look at in research.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: Okay.

Hi.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Right.

Speaker Change: Okay.

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Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Vasant Narasimhan: So we don't have any updates as the trial, you know, continues to accrue events. I mean, based on our current estimates, we think a second half 2024 filing is the right timeline to provide at this point in time. But of course, you know, this will evolve as we accumulate events. In terms of our confidence level, nothing has changed.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

But, of course, we evaluate all the opportunities that are currently out there, given the size of this market and its importance for cardiovascular health. So obviously, if we find something of interest, we'll pursue it. But at the moment, I can't really say anything specific about it. Perfect. Thanks, everyone, for joining. We look forward to keeping you updated over the course of the year and wish everyone a happy 2020. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: [music].

Vasant Narasimhan: So we think we have a very compelling case; we think it's really a matter of getting to higher resolution, both in terms of the adjusted analysis, where we're already below a hazard ratio of one, as well as a tighter radius around the all-comers analysis, as well as for the OS. And so this will be, of course, a topic of discussion with the FDA, but we think we can make a very clear and compelling case that this medicine should be offered to patients in the pre-taxing setting. And then we also are continuing, as I mentioned, to move forward rapidly on PSMA addition, as well as PluVicto in all metastatic settings, so we can cover all of our bases. I do think, overall, as an industry, we'll learn more with some of the upcoming ad comms.

Speaker Change: Okay.

Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Okay.

Speaker Change: [music].

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Speaker Change: Okay.

Speaker Change: [music].

Yes.

Vasant Narasimhan: On from other competitor medicine on how the FDA is thinking about OS crossover and how to manage this. And I'm hopeful that overall patient benefit is what ultimately rules out some of the statistically pure, pure statistical considerations, given that we are encouraged to utilize crossover in our studies to be patient-friendly in an appropriate way. I think it's very important.

Vasant Narasimhan: We start to be looking at the adjusted analysis. Otherwise, this puts the overall industry in a very challenging situation. Next question, operator.

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

Vasant Narasimhan: Okay, thanks for taking the follow-up. I just wanted to dig into some of the moving parts for the guide on generics you saw first. I made some sort of high-level comments there, but in terms of the ability to manufacture, I assume that's a standard stat in LAR. I think Teva got an approval in December, but is that a restriction, a legal one? So is there any sort of litigation around manufacturing, even if there isn't around the approval, or is that a tech ops consideration there?

Vasant Narasimhan: On Sandestatin, there is no litigation ongoing, I think, and I can't comment on other companies' manufacturing capabilities. I think what we did observe in Europe with the launch of generics is there was limited supply available for those launches, given the complexity of the manufacturing. And we believe that that's a problem as well, that would still be the case in the US. This is a very difficult medicine.

Vasant Narasimhan: May can characterize and release the product, but obviously that's for the approved generic to ultimately determine. So we'll be monitoring to see how and when that product comes to market and in what volumes. And in the meantime, as well, we very much are focused on our Lutathera frontline data, where we, I think, presented really compelling data to make Lutathera the medicine, the frontline medicine of choice. It's already on label

Vasant Narasimhan: We're already promoting that to physicians and making sure physicians understand the data set that we've now generated with the NETR2, and that gives us an opportunity as well to maintain our neuroendocrine tumor business. With respect to Primacta, there's not much more I can add. We will, of course, continue to defend our IP, and we'll do so and try to maintain the medicine's protection for as long as possible. But at this point in time, I can't provide any further details or guidance on Primacta. For forecasting purposes, we're saying a generic entry in 2024, but as always, we defend our IP to the fullest. Moving to the last question, operator.

Tim Anderson: Thank you. Your last question for today comes from the line of Tim Anderson, Wolf Research. Please go ahead. Thank you so much. Obesity, I think you've been asked this before, but quite possibly the biggest therapeutic category.

Vasant Narasimhan: You guys have a big presence in cardiometabolics. How high of a priority is it to enter this space? There are acquirable assets in clinical development that fall into that sub-5 billion range. Why not move on one of them?

Vasant Narasimhan: Can't late entrant products still capture revenues? Or are vulnerabilities too far ahead to justify the cost of a competitive development program? Yeah, thanks, Tim. So look, when we think about the obesity market, we very much look at it in the lens of our presence in cardiovascular disease and want to ensure we have a presence that enables future cardiovascular drugs we have in our pipeline to either be combined or available to patients with the full range of cardiovascular diseases. So certainly something we're evaluating and looking at. Our current view is that given the number of companies already pursuing injectable and oral GLP, and GIP top assets, we should be focused on differentiated assets that have novel targets or novel approaches, or novel profiles, which is what we look at in research. But, of course, we evaluate all the opportunities that are currently out there, given the size of this market and its importance for cardiovascular health. So obviously, if we find something of interest, we'll pursue it. But at the moment, I can't really say anything specific about it.

Perfect. Thanks, everyone, for joining. We look forward to keeping you updated over the course of the year and wish everyone a, 2020. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Vieira, ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ Hutton. ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

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