Frequently Asked Questions

Top 10 questions from our investors

Last updated: August 2023

What is your approach to risk and opportunities related to artificial intelligence?

• Artificial intelligence is the ability of a computer/robot to perform tasks commonly associated with intelligent beings. We believe the opportunities associated with this are limitless. We need to also mitigate risks mainly (though not exclusively) related to ethics and data privacy.
• Novartis uses AI in three main areas
  1) Development of novel therapies and drug
  2) Optimization of business processes and operation
  3) Engagement with patients, healthcare professionals and partners
• We recognize the important ethical consideration in implementing AI systems, and have set out eight principles for the use of AI, based on a human-centered approach.
• In the ideation and creation of our eight principles, we engaged a team of specialists in Ethics, Risk & Compliance, Data Privacy, Legal and AI, as well as the Independent Bioethics Advisory Committee (IBAC).
• As we operationalize our eight principles, we are focusing on targeted awareness of risks and training for our associates. In this way, we are upskilling our organization to embed ethics in the design of AI systems.
• We have developed and are launching a novel risk and compliance framework for the responsible use of AI at Novartis. This framework allows us to assess and manage risks related to the exploration, design, development and usage of AI systems.
• Transparency is of utmost importance for our “digital responsibility” approach.
• Our AI/Ethics position paper can be found here.
• Our approach and commitment to data privacy can be found here.

How do you expect the planned separation of Sandoz to impact your Access to Medicines deliverables?

• Going forward, Novartis will focus more on access to innovation/innovative medicines and Sandoz will focus more on affordable healthcare and patient reach.
• Our strategy on sustainability and access remains unchanged post-spin-off. We are focused on working with healthcare systems to advance access for underserved patients in LMICs and leading on innovative efforts such as pricing and our Sub-Saharan Africa strategy.
• Sandoz will continue to focus on broadening and accelerating access to affordable medicines ensuring their sustainable and responsible use. As the leading global supplier of generic antibiotic medicines, it will continue its efforts to help combat AMR, taking a balanced approach across the four pillars of the global AMR response strategy: Responsible access, responsible use, responsible manufacturing, and innovation.
• Novartis launched a joint AMR program together with Sandoz in 2021. Novartis plans to continue providing programmatic interventions and drive innovation through the AMR Action Fund.

Can you share more detail on the AMR Action Fund and the role of Novartis?

• The barriers to innovating in antibiotics are too great and the problem of appropriately managing antimicrobial resistance (AMR) is too complex for one company to tackle alone. Novartis has partnered with a broad group of stakeholders, including the International Federation of Pharmaceutical Manufacturers & Associations (IFMA) and 23 of its member biopharmaceutical companies, the World Health Organization, the European Investment Bank, and the Wellcome Trust to create the AMR Action Fund.
• Novartis is one of the members of the USD 1 billion AMR Action Fund, established in 2020 to invest in cross-industry antibacterial R&D. This partnership between pharmaceutical companies, philanthropic organizations, development banks and multilateral organizations aims to strengthen and accelerate antibiotic development and bring 2–4 new antibiotics to patients by 2030.
• The Fund is managed independently from the contributing organizations and has already made strategic investments in new antibiotic discovery and development.

Is Novartis ready for new regulatory requirements such as CSRD?

• Novartis is on track to meet applicable reporting requirements in Switzerland, Europe and US. These include Art. 964 of the Swiss Code of Obligations in Switzerland, Corporate Sustainability Reporting Directive (CSRD) in Europe and SEC proposed climate disclosures in US.
• CSRD regulation is part of the EU’s non-financial reporting regulation, which Novartis is preparing for ahead of its implementation in 2025. We welcome the evolving regulation because it aims to address greenwashing and standardize difficult outputs across peers and sectors.

Can you comment on Principle Adverse Impacts required under CSRD and what you report on?

• We are aware of the Principal Adverse Impact (PAI) indicators defined by the Sustainable Finance Disclosure Regulation (SFDR) and the need of financial market participants to access information related to these indicators for companies in their portfolios. Most PAIs are part of or can be derived from our existing disclosures in the Novartis in Society Integrated Report (e.g. NiS 2022 – pages 49, 60, 82-84).
• We disclose non-financial information through our NiS, on Novartis.com, and in dedicated channels like CDP and the Communication of Progress (CoP) by the UN Global Compact. In addition, various ESG rating agencies collect information on PAIs based on our disclosures. We are evaluating the metrics we disclose based on new and upcoming regulations and we support further modifications where it is helpful and relevant.

How do you ensure diversity in clinical trials?

• As we reimagine medicine, delivering on access and improving healthcare equity are key material factors, and essential to our commitment for patients and healthcare workers.
  
  We have set our ambitions to enhance diversity in clinical trials. We evaluate for diversity in all Phase 3 studies with US country participation. Our long-term intention is to embed this evaluation throughout our global trials. These aims are embedded in the Novartis Code of Ethics and our Access Principles.
• In mid-2021, we developed ‘Beacon of Hope’, a 10 year collaboration with approximately 30 Historically Black Colleges, Universities and Medical Schools in the US, to address root causes of disparities in health and education.
• We work with policy makers through advocacy, we also partner with local authorities, expanding engagement with clinical sites/investigators to include areas where diverse patients with particular diseases may be located and collaborate with patient groups, medical institutions and communities to develop investigators of color and recruit broader patient populations.

What is your approach to improving access and pricing in LMICs?

• Access to innovative therapies and addressing unresolved global health challenges is where the healthcare industry can drive the largest impact to society, as this is the highest unmet need in medicine.
• Some of our efforts at Novartis include our 2020 sustainability-linked bond (SLB), which will remain with Novartis after Sandoz spin-off, our emerging growth brands and our Sub-Saharan strategy which focus on innovation and creating value for different stakeholders, which include healthcare professionals, patients, and our shareholders. These efforts were intentional, created to have measurable KPIs and further access to innovative medicines.
• On pricing, our approach is similar. We believe that pricing of medicines should be based on the value they bring to patients, healthcare systems and society. We have been driving a shift to a value-based pricing approach with reasonable out-of-pocket costs for patients. Novartis believes that this approach contributes significantly to delivering access to medicines.

Have you quantified the carbon credits you plan to purchase to achieve your decarbonization goals?

• We commit to be fully in line with the Science-Based Targets Initiative (SBTi) net-zero standards, which recommend no more than 10% carbon removal offsets by 2040.
  
  To support this, Novartis has developed a climate model which estimates the investments needed to achieve our decarbonization goals. This model will be revised when our net-zero glidepath has been updated and validated by the SBTi.
• Our climate model factors in our 2040 decarbonation goals across our value chain (scope 1, 2, 3).

How do you govern market-specific diversity, equity and inclusion programs at Novartis?

• Our Diversity, Equity and Inclusion (DEI) programs are integral to our Human Resources and management strategy and operationalized in every country.
  
  For example, since 2021, Novartis offers at least 14 weeks of parental leave across geographies, regardless of gender, to help people support the wellbeing of their families after a birth or adoption.
• In 2022, we were recognized externally for the progress we continue to make in providing a positive and inclusive work environment for all employees through the Stonewall Top Global Employer Silver Award, and were included in the Bloomberg Gender Equality Index. These ratings and benchmarks provide valuable insights and our progress compared to industry standards and peers.

You have a commitment to invest USD 250 million between 2021-2025 in R&D for neglected diseases. Can you share an update on this?

• Our long-term ambition is to drive and deliver access to innovation, and we believe that there are significant unmet needs and opportunities in neglected diseases.
• Our commitment of USD 250 million over five years (2021-2025) includes: funding to advance research and development of our neglected tropical disease program with research efforts and collaborations to reduce the burden of Chagas disease, leishmaniasis, dengue and cryptosporidiosis; R&D for next-generation antimalarials to combat the emerging resistance to artemisinin and an optimized formulation for babies under 5kg, addressing the unmet needs of children.

Some highlights:

• Malaria: Delivered more than 1 billion treatment courses of our antimalarial, Coartem.
• Leprosy: Novartis is a founding member of the Global Partnership for Zero Leprosy, established in 2018 to help interrupt transmission and achieve zero new leprosy cases.
• Chagas: In 2022, we kicked off the RAISE Study: The buRden of ChAgas dISEase in the contemporary world under a research collaboration with the World Heart Federation and the University of Minas Gerais in Brazil.

Where are Novartis shares traded?

Novartis shares are listed and traded on the SIX Swiss Exchange (Valor No. 001200526, ISIN CH0012005267, symbol: NOVN) as well as on the NYSE in the form of American Depositary Receipts (ADR) (Valor No. 567514, ISIN US66987V1098, symbol: NVS).

What are the ticker symbols for Novartis?

Shares	SIX (Reuters / Bloomberg)	NOVN.S / NOVN SW
ADRs	NYSE (Reuters / Bloomberg)	NVS / NVS US

What is an ADR/ADS?

ADR stands for American Depositary Receipt. ADS stands for American Depositary Share. An ADR is a receipt for a number of shares of a foreign-based corporation held by a US depositary bank, entitling the ADR holder to all dividends and capital gains.

What is the number of outstanding shares in Novartis?

Key Novartis share data

Calculated on the weighted average number of shares outstanding

	2022	2021	2020
Issued shares	2 403 721 252	2 434 420 920	2 467 060 920
Treasury shares1	284 112 195	199 480 972	210 238 872
Outstanding shares at December 31	2 119 609 057	2 234 939 948	2 256 822 048
Weighted average number of shares outstanding	2 181 180 341	2 242 601 173	2 277 041 940

1. Approximately 99 million treasury shares (2021: 102 million; 2020: 103 million) are held in Novartis entities that restrict their availability for use.

What is the number of outstanding ADRs in Novartis?

Key data on ADRs issued in the US

	2022	2021	2020
Year-end ADR price (USD)	90.72	87.47	94.43
Number of ADRs outstanding1	225 435 680	269 891 321	288 755 853

1. The depositary, JPMorgan Chase Bank, N.A., holds one Novartis AG share for every ADR issued.

When is your dividend going to be paid?

The dividend payment date has been set for March 13, 2023.

What is the dividend history for Novartis shares?

Shareholders approved the 25th consecutive dividend increase to CHF 3.10 (+3.3%) per share for 2021 at the Annual General Meeting on March 04, 2022.

Learn more about dividend information

What is the new cost basis of my Novartis and Alcon shares following the spin-off of Alcon from Novartis?

Information about allocation of tax basis for U.S. holders may be found in the Form 8937: Basis of Securities (PDF 0.1 MB). With regard to non-U.S. holders, please note that the allocation of tax basis for Novartis and Alcon shares following the spin-off depend on the applicable local tax provisions and each shareholder’s individual circumstances. Accordingly, all shareholders and ADR holders are asked to consult their own tax advisor regarding the tax basis allocation calculations.

What are the income tax implications to Canadian shareholders due to the Alcon spin-off?

The following documents include the Finance Canada and Canada Revenue Agency comfort letter, Canada income tax guidelines and tax election letters related to the Alcon Spin-off for Canadian resident shareholders:

Canada Income Tax Alcon Spin-off FAQ - English (PDF 0.1 MB)

Canada Income Tax Alcon Spin-off FAQ- French (PDF 0.1 MB)

Department of Finance Canada Comfort Letter (PDF 0.1 MB)

Download the Canada and Quebec Tax Election Example Letters (ZIP 0.1 MB)

 

What is the amount and timing of the next dividend payment?

The Novartis Board of Directors will propose a dividend of CHF 3.20 per share to the shareholders for approval at the Annual General Meeting to be held on March 07, 2023.

If this proposal is approved, the dividend will be paid as from March 13, 2023. The last trading day with entitlement to receive the dividend is March 08, 2023. As from March 09, 2023, the shares will be traded ex-dividend.

Is the dividend on the Novartis ordinary share and the Novartis ADR the same?

Yes, however, since ADR holders will receive their dividend in US dollars, the amount received will be impacted by currency exchange rates, as well as by a handling fee (historically, $0.01 per share) associated with the ADR dividend. An estimate of the amount of the US dollar dividend for the ADR will be calculated on the day of the dividend announcement based on that day’s exchange rates. The actual exchange rate will be determined once all funds are received and exchanged by J.P. Morgan, the depositary bank.

Since 2019, Novartis’s dividend to ADR holders will be paid in two stages. The first payment will be equal to 65% of the payout, payable one week after Swiss payment date. Those holders reclaiming withholding tax will receive a second payment once the reclaim process is completed.

Will the rate recently announced for the ADRs change between now and the ADR payment date?

Yes, the preliminary announcement only provides an estimated rate based on a current FX rate. The actual rate will be determined when the Swiss Francs are converted to US dollars on the Swiss payment date once all the funds are received by J.P. Morgan, the Depositary.

When will the remainder of the funds be converted and paid to the ADR holders?

The remainder of the funds due to ADR holders will be converted only after a tax reclaim has been completed and once any such reclaimed funds have been received by J.P. Morgan from the Swiss Tax Authorities. Once the funds are received and converted into US dollars a payment will be made shortly thereafter to any ADR holders entitled thereto. From previous years, we can expect tax reclaim funds to be distributed to ADR holders six to seven weeks after the Swiss payment date.

Will the entire dividend amount be converted into US dollars on the Swiss payment date of March 13, 2023?

On the Swiss payment date only 65% of the dividend is received. This amount will be converted into US dollars and paid on the ADR payment date of March 20, 2023.

Why can’t J.P. Morgan receive all of the funds on the Swiss payment date?

The Swiss Tax Authorities require that a tax reclaim be completed prior to each payment for any amounts due above and beyond the non-treaty amount. Investors must certify and elect their entitlement and provide necessary disclosure documentation as required by the treaty between the US and Switzerland based upon their tax status.

Why does it take so long to get the reclaim funds back from the Swiss Tax Authorities?

Holders of ADRs entitled to receive the dividend are not able to elect until after the ADR record date which is just one (1) day prior to the Swiss payment date. Eligible holders of ADRs are given 10 days to complete and submit their election. Once any reclaims are submitted to the Swiss Tax Authorities it takes approximately 15 days for such authorities to process the reclaim.

Will another announcement be made once the tax reclaim funds are received?

No, the funds will be converted and paid to the holders.

How does the tax reclaim process work?

There is a process for banks and brokers within Depositary Trust Company to elect their clients’ correct tax status electronically and to provide documentation on behalf of their clients. J.P. Morgan elects on behalf of registered holders based upon their tax status. Please contact J.P. Morgan / Goal Group Recoveries, Inc., New York at +1 212 248 9130 for further questions.