PRESS RELEASE: Novartis Delivers Strong New -4-

Fitch had a long-term  rating of AA and  a short-term rating of  F1+. 
These agencies maintained a "stable" outlook. 
 
Cash flow 
Cash flow from operating activities was USD 7.7 billion in the  first 
nine months of 2009,  an 18% increase over  the year-ago period  that 
was driven by improvements of USD 0.5 billion in net working  capital 
and a reduction of  USD 0.4 billion in  tax payments compared to  the 
2008 period. 
 
Cash outflows from investing activities  reached USD 10.0 billion  in 
the first  nine  months of  2009  and  included USD  7.5  billion  in 
marketable securities investments with  proceeds from bond  offerings 
as well  as USD  0.9 billion  related to  the EBEWE  Pharma  generics 
business acquisition and USD 1.3 billion for capital expenditures. 
 
Cash inflows from financing activities were a net USD 3.0 billion  in 
the 2009 period, as the USD 7.1 billion of proceeds from bond  issues 
were partially offset  by the dividend  payment for 2008  of USD  3.9 
billion and other items totaling USD 0.2 billion. 
 
PHARMACEUTICALS PRODUCT REVIEW 
Note: Net sales growth data refer to year-to-date 2009 performance in 
local currencies. 
 
Strategic Cardiovascular and Metabolism franchise 
Rapidly growing contributions from new  products provided 74% of  the 
incremental growth  in the  strategic Cardiovascular  and  Metabolism 
franchise (USD 5.4  billion, +12%  lc) in  the first  nine months  of 
2009. Seven medicines within the Exforge, Tekturna/Rasilez and Diovan 
brands are available  in many  markets, reaffirming  the position  of 
Novartis as the world's largest provider of branded anti-hypertension 
therapies based on annual sales. 
 
Diovan (USD 4.4  billion, +5%  lc) achieved  solid worldwide  growth, 
driven by expansion in Japan, which accounts for approximately 20% of 
net sales  and  where the  Co-Dio  diuretic combination  therapy  was 
launched in  2009.  Results  from the  Japanese  KYOTO  HEART  study, 
presented  in  September  at  the  European  Society  of   Cardiology 
Congress, demonstrated that the addition of Diovan to a non-ARB-based 
treatment regimen for high blood pressure provided a significant  45% 
relative risk reduction in  cardiovascular events, including  stroke, 
over a conventional non-ARB treatment regimen. Diovan also maintained 
strong growth in Europe, where the expected entry of generic versions 
of losartan, another  medicine in the  angiotensin receptor  blockers 
(ARB) segment, has been delayed until the first half of 2010. In  the 
US, Diovan (+3%) expanded during  the 2009 nine-month period  despite 
greater use of generic versions  of high blood pressure medicines  in 
other classes. 
 
Exforge (USD 475 million +81% lc), a single pill with the angiotensin 
receptor blocker Diovan (valsartan)  and the calcium channel  blocker 
amlodipine, delivered above-market  growth and  expanded faster  than 
the broader high blood  pressure segment. Exforge  HCT, which adds  a 
diuretic to this combination, was launched in the US after regulatory 
approval in April 2009  as a high blood  pressure therapy with  three 
medicines in one pill. Exforge was submitted for Japanese  regulatory 
approval in late 2008. 
 
Tekturna/Rasilez (USD 202 million, +114% lc), the first new class  of 
high blood  pressure  medicine in  more  than a  decade,  is  growing 
consistently.  Key  drivers  are  clinical  data  demonstrating   its 
prolonged efficacy in lowering blood pressure for more than 24 hours, 
and superiority  in  clinical trials  over  ramipril, a  leading  ACE 
inhibitor (an older class of high blood pressure medicines).  Rasilez 
was launched  in Japan  in  October 2009.  Valturna -  a  single-pill 
combination of Tekturna/Rasilez  and Diovan (valsartan)  - gained  US 
regulatory approval in September based on clinical data showing  this 
medicine offers significantly  higher blood  pressure reduction  than 
either valsartan or aliskiren alone. 
 
Galvus/Eucreas (USD 115 million, +416% lc), oral treatments for  type 
2 diabetes,  have  been expanding  rapidly  in many  European,  Latin 
American and  Asia-Pacific markets,  and outperforming  a  competitor 
medicine in the DPP-IV segment  in some countries. First launched  in 
2008, Galvus  is  now approved  in  69 countries,  while  Eucreas  (a 
single-pill  combination   with  the   oral  anti-diabetes   medicine 
metformin) is approved in 50 countries. 
Oncology 
Gleevec/Glivec (USD 2.9  billion, +12%  lc), a  targeted therapy  for 
some forms  of chronic  myeloid leukemia  (CML) and  gastrointestinal 
stromal tumors  (GIST), has  achieved sustained  double-digit  growth 
based on its leadership position in treating these cancers backed  by 
new clinical data and regulatory  approvals. The latest approval  was 
for use  in  adjuvant  (post-surgery) GIST  patients,  which  is  now 
approved in  more than  25  countries in  North America,  Europe  and 
Asia-Pacific. 
 
Tasigna (USD 144 million, +171% lc) is approved in 65 countries as  a 
second-line therapy  for  patients with  a  form of  chronic  myeloid 
leukemia (CML) resistant  or intolerant to  prior therapy,  including 
Gleevec/Glivec. New clinical data  has demonstrated the potential  of 
Tasigna to become a leading therapy for newly diagnosed CML patients. 
Independent Phase II  data published  in the  journal "Blood"  showed 
molecular traces  of this  form of  leukemia were  reduced to  nearly 
undetectable levels in 85%  of patients after  12 months. In  October 
2009, results from the global ENESTnd trial, the largest head-to-head 
comparison of  a  targeted  therapy against  Glivec  ever  conducted, 
showed that Tasigna produced faster and deeper responses than  Glivec 
in newly diagnosed CML  patients. A Phase III  trial of Tasigna as  a 
third-line therapy for GIST  did not meet  its primary endpoint,  but 
results showed  a two-month  improvement in  median overall  survival 
(not statistically significant) for patients treated with Tasigna. As 
a result,  Novartis  will  not  seek  regulatory  approval  for  this 
indication. A first-line study in GIST began enrollment in March. 
 
Zometa   (USD 1.1  billion, +9%  lc), an  intravenous  bisphosphonate 
therapy for patients with cancer that has spread to bones, is growing 
due to improved compliance and  use in existing indications.  Studies 
are underway to review potential anti-cancer benefits in other  tumor 
types. US and European regulatory submissions are planned in the 2009 
fourth quarter for  the use of  Zometa in adjuvant  breast cancer  in 
premenopausal women  based on  published  anti-cancer data  for  this 
indication. 
 
Femara (USD 925  million, +16% lc),  an oral therapy  for women  with 
hormone-sensitive breast cancer,  has seen strong  sales during  2009 
due to  growth in  the initial  adjuvant (post-surgery)  setting.  In 
August, "The New England Journal of Medicine" published results  from 
the landmark BIG 1-98  study affirming the  five-year upfront use  of 
Femara  after  surgery  was  an  optimal  treatment  approach  versus 
tamoxifen for postmenopausal women with early-stage, hormone-receptor 
positive breast  cancer.  These data  were  submitted to  US  and  EU 
authorities for inclusion in product information. 
 
Sandostatin (USD 839 million, +6%  lc), for patients with  acromegaly 
and  neuro-endocrine  tumors  of   the  gastrointestinal  tract   and 
pancreas, has  grown  from increasing  use  of Sandostatin  LAR,  the 
once-monthly version that accounts for nearly 90% of net sales. Phase 
III data demonstrating  a significant delay  in tumor progression  in 
patients with metastatic neuroendocrine tumors of the midgut who were 
treated with Sandostatin LAR were published recently in the  "Journal 
of Clinical Oncology."  These data formed  the basis of  a recent  US 
National Comprehensive  Cancer  Network (NCCN)  update  on  treatment 
guidelines for neuroendocrine tumors. 
 
Exjade  (USD 469 million, +30%  lc), currently approved in more  than 
90 countries as  the only once-daily  oral therapy for  transfusional 
iron overload, received US and Canadian regulatory approvals in  2009 
to extend the dose  range to 40 mg/kg.  This new dosing range,  which 
was also approved in  Switzerland in 2009 and  will apply to  various 
other countries, provides a new option to patients who require higher 
dose titration for iron chelation. The FDA is reviewing Exjade safety 
information specifically on  the risk of  adverse events in  patients 
with myelodysplastic  syndrome  (MDS) compared  to  patients  without 
these conditions. Novartis is working with the FDA to further  review 
and clarify  the  population of  MDS  patients most  appropriate  for 
treatment with Exjade. 
 
Afinitor (USD 38  million), an  oral inhibitor of  the mTOR  pathway, 
received European approval in  August 2009 for  use in patients  with 
advanced renal  cell carcinoma  (RCC,  kidney cancer)  whose  disease 
progressed on  or after  treatment with  VEGF-targeted therapy.  This 
follows the US launch in March as the first therapy for patients with 
RCC after failure of treatment with sunitinib or sorafenib.  Afinitor 
is being studied in many cancer types: Phase III studies are underway 
in  patients  with  neuroendocrine   tumors  (NET),  breast   cancer, 
lymphoma, tuberous  sclerosis complex  (TSC)  and gastric  cancer.  A 
late-stage trial is planned to start in patients with  hepatocellular 
carcinoma (HCC) in early 2010. The active ingredient, everolimus,  is 
the same as in the transplant therapy Certican. 
 
Other Pharmaceuticals products 
Lucentis (USD  858 million,  +48% lc),  a biotechnology  eye  therapy 
approved in more than 80 countries, delivered sustained growth on top 
performances in  France, the  United  Kingdom, Australia  and  Japan. 

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October 22, 2009 01:16 ET (05:16 GMT)

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