Apr 09, 2019
  • Novartis positioned for sustained growth, including plans to improve Innovative Medicines core margins into mid-30s by 2022
  • Novartis has a catalyst-rich pipeline with 10 potential blockbuster launches planned in the next two years, and 20 additional potential blockbusters on the horizon
  • Spin-off allows shareholders to benefit from a standalone Alcon and a Novartis with capital and management attention fully focused on medicines
  • Novartis retains a leading ophthalmology pharmaceuticals business and attractive pipeline
  • Novartis plans to pay a strong and growing annual dividend, from the CHF 2.85 per share paid in 2019, with no adjustment for the Alcon spin-off
  • Share buyback of up to USD 5 billion announced in June 2018 expected to be completed in 2019

Basel, April 9, 2019 - Novartis today completed the spin-off of the Alcon eye care devices business through a dividend-in-kind distribution to holders of Novartis shares and ADRs (American Depositary Receipts), with each holder receiving 1 Alcon share for every 5 Novartis shares or ADRs held on April 8, 2019, at the close of business.

The successful execution of the Alcon spin-off allows Novartis to fully focus its capital allocation and management attention on medicines. The spin-off gives Novartis a financial profile closer to its pharmaceutical industry peers, including higher group margins. As a focused medicines company, Novartis is well-positioned for sustained top- and bottom-line growth and plans to improve Innovative Medicines core margins into the mid-30s by 2022.

Vas Narasimhan, CEO of Novartis, said: "This is an incredibly exciting day for both Novartis and Alcon. Alcon has demonstrated consistent growth, and is coming to market from a position of strength. We wish them the very best for the future. At Novartis, we continue to reimagine ourselves as a leading medicines company powered by breakthrough medicines, data science and advanced therapy platforms. We are well positioned for the future and I am excited for our associates, our investors, and most importantly for patients."

Novartis has an industry-leading, catalyst-rich pipeline with 10 potential blockbuster launches expected in the next two years and an additional 20 potential blockbusters on the horizon. Of these potential blockbuster launches, four are planned in 2019, including brolucizumab (RTH258). RTH258 is part of the leading ophthalmology pharmaceuticals business retained by Novartis, with 2018 sales of USD 4.6 billion and a pipeline of potential novel treatments for presbyopia, dry eye and genetic diseases.

Novartis reiterated its disciplined shareholder focused approach to capital allocation, including its intention to continue paying a strong and growing annual dividend up from the CHF 2.85 per share paid in 2019, without adjustments for the Alcon spin-off. Share buybacks will continue to be part of the mix to create shareholder value, with USD 0.8 billion of an up to USD 5 billion commitment completed in 2018, and the remainder expected to be completed by the end of 2019.

Shares in Alcon, Inc. will be listed and commence trading today under the symbol "ALC" on the SIX Swiss Exchange (SIX) from 09:00 CET and on the New York Stock Exchange (NYSE) from 09:30 EST. Shares of Novartis will continue to trade on the SIX under the symbol "NOVN" and Novartis ADRs will continue to trade on the NYSE under the symbol "NVS".

Novartis plans to provide more information on its strategic priorities and prospects to investors and analysts at its annual Meet Novartis Management event in Cambridge, Massachusetts, on May 22-23, 2019.

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as "continues," "positioned," "plans," "by 2022," "pipeline," "potential," "launches," "planned," "in the next two years," "on the horizon," "focused," "growing," "expected," "focus," "well positioned," "for the future," "intention," "will," or similar expressions, or by express or implied discussions regarding the spin-off of Alcon; regarding the future performance of Novartis and Alcon as separate businesses, or regarding any potential strategic benefits, synergies or opportunities as a result of the spin-off; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward looking statements are based on our current beliefs and expectations regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward looking statements. There can be no guarantee that Novartis or Alcon as separate businesses will be able to realize any of the potential strategic benefits, synergies or opportunities as a result of the spin-off, within any particular time frame, or at all. Neither can there be any guarantee that shareholders of Novartis or Alcon will achieve any particular level of shareholder returns. Nor can there be any guarantee that Novartis or Alcon will be commercially successful in the future, or achieve any particular credit rating or financial results. In particular, our expectations could be affected by, among other things: the potential that the strategic benefits, synergies or opportunities expected from the spin-off may not be realized or may take longer to realize than expected; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures and requirements for increased pricing transparency; regulatory actions or delays or government regulation generally; the inherent uncertainties involved in predicting shareholder returns; a failure to successfully separate Alcon from the Novartis Group subsequent to the completion of the spin-off, or within the expected time frame; potential adverse reactions to the spin-off by customers, suppliers, strategic partners or key Alcon personnel and potential difficulties in maintaining relationships with such persons; the uncertainties inherent in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data; the ability of Novartis or Alcon to obtain or maintain proprietary intellectual property protection; safety, quality or manufacturing issues, including withdrawal of products from the market; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes and government investigations generally; uncertainties involved in the development or adoption of potentially transformational technologies and business models; general political and economic conditions, including uncertainties regarding the effects of ongoing instability in various parts of the world; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products or those of Alcon; and uncertainties regarding potential significant breaches of data security or data privacy, or disruptions of our information technology systems or those of Alcon; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission (SEC) or in the Form 20-F filed by Alcon with the SEC, as amended from time to time, and the corresponding Swiss listing prospectus. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

This press release is not an offer to sell, or a solicitation of an offer to buy or sell, any securities of Novartis or of Alcon, and may not be relied upon in connection with the purchase or sale of any such security. Should you wish to invest in Alcon, you should do so solely on the basis of information Alcon has filed with the SEC or in the corresponding Swiss listing prospectus, including the section "Risk Factors" included in the Alcon Inc. Form 20-F registration statement and the Swiss listing prospectus, respectively. The information filed with the SEC is available on the SEC's website at www.sec.gov.

About Novartis
Novartis is reimagining medicine to improve and extend people's lives. As a leading global medicines company, we use innovative science and digital technologies to create transformative treatments in areas of great medical need. In our quest to find new medicines, we consistently rank among the world's top companies investing in research and development. Novartis products reach more than 750 million people globally and we are finding innovative ways to expand access to our latest treatments. About 105 000 people of more than 140 nationalities work at Novartis around the world. Find out more at www.novartis.com.

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