NOVARTIS AG CHF0.50(REGD) / Novartis achieves record results in 2009 as momentum from recently launched products drives growth across its entire healthcare portfolio processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement.

Novartis completes CEO succession process with appointment of Joe Jimenez as new CEO and simplified leadership organization

·   Group delivers sustained business expansion and profit improvement with all divisions contributing to strong performance in 2009

o    Net sales rise 11% in local currencies (lc) to USD 44.3 billion (+7% in
USD), as innovative  products drive Pharmaceuticals to industry-leading growth
and Vaccines and Diagnostics sells over 100 million influenza A (H1N1) pandemic
vaccine doses

o    Core operating income grows 11% to USD 11.4 billion, as margin improves to 25.8% of net sales on business expansion and productivity gains

o    Core net income rises 8% to USD 10.3 billion, at a lower pace than core operating income mainly due to Alcon-related financing costs

o     Core EPS up 8% to USD 4.50

o    Free cash flow before dividends advances 24% to USD 9.4 billion

·   More than 30 drug approvals and full pipeline with 145 projects in pharmaceutical clinical development, of which 60 involve new molecular entities

·         ·   Forward productivity program exceeds savings goal by nearly 50% and a year ahead of schedule

·   Access-to-medicine programs including medication for malaria and leprosy
reach 80 million patients in 2009 with contributions valued at USD 1.5 billion,
or 3% of sales

·   New management in place for the next phase of growth

o    Dr. Vasella to focus on strategic priorities as Chairman, Board names Joe Jimenez CEO and simplifies organizational structure completing the CEO succession process begun in 2008

o    Novartis to become the first large, listed Swiss company to include a consultative vote on Compensation System in its Articles of Incorporation, further strengthening governance in wake of global financial crisis

·         ·    13th consecutive dividend increase: CHF 2.10 per share proposed for 2009

·         ·    2010 to be a year of significant progress in implementing
strategic priorities with continued focus on innovation, growth and productivity

Key figures

                             Full year                  Fourth quarter

                       2009     2008   % change     2009     2008   % change

                      USD m    USD m   USD   lc    USD m    USD m   USD   lc

------------------------------------------------------------------------------

  Net sales          44 267   41 459     7   11   12 926   10 077    28   20

  Operating income    9 982    8 964    11         2 637    1 680    57

  Net income          8 454    8 163     4         2 323    1 507    54

  Basic EPS (USD)      3.70     3.59     3          1.01     0.66    53

  Core(1)

  Operating income   11 437   10 319    11         3 204    2 090    53

  Net income         10 267    9 501     8         2 892    1 967    47

Basic EPS (USD) 4.50 4.18 8   1.26 0.86 47 ------------------------------------------------------------------------------

[1] Core results for operating income, net income and earnings per share (EPS) eliminate the impact of acquisition-related factors and other significant exceptional items. See page 35 for further information.

Basel,  January  26, 2010 -  Commenting  on  the  results,  Dr.  Daniel Vasella,
Chairman and CEO of Novartis, said: "Novartis delivered an excellent performance
in  2009 driven  by  strong  underlying  growth  across  our  entire  healthcare
portfolio.  Over the past 12 months, we sustained  our lead in approvals for new
products,  achieving more than 30 major new  product approvals in the US, Europe
and  Japan.  Our  productivity  efforts  improved  profitability and allowed for
continued  investments in drug discovery. The  planned acquisition of Alcon will
propel  Novartis to the global leadership position  in eye-care and create a new
growth  platform. After  14 years as  CEO it  is the  right time to complete the
carefully  planned CEO  succession process,  which started  over a year ago. The
Board  appointed  Joe  Jimenez,  currently  division  head of our pharmaceutical
business  as new CEO and also agreed  to delayer and simplify the top leadership
structure.   The   international  experience  in  pharmaceuticals  and  consumer
businesses  together with an excellent track  record destine Joe Jimenez to lead
Novartis  into a next phase of expansion and growth. I am convinced 2010 will be
a year of significant progress."

OVERVIEW

Full year
The  underlying double-digit expansion in Pharmaceuticals,  ranked as one of the
industry's  fastest-growing businesses  based on  market share,  led the Group's
healthcare  portfolio in  2009 to another  year of  record results. Vaccines and
Diagnostics   achieved  exceptionally  high  sales  by  rapidly  developing 

and

delivering  influenza A  (H1N1) pandemic  vaccines to  address the public health
threat.

Net  sales rose  7% (+11% in  local currencies,  lc) to  USD 44.3 billion on the
underlying  expansion in all divisions:  Pharmaceuticals (+12% lc), Vaccines and
Diagnostics   (+39%   lc),  Sandoz  (+5%  lc)  and  Consumer  Health  (+5%  lc).
Top-performing  regions  included  Europe  (USD  18.4 billion,  +10% lc) and the
United  States  (USD  14.3 billion,  +11%  lc)  as  well as the top six emerging
markets  (USD 4.0 billion, +17% lc) of Brazil, China, India, Russia, South Korea
and  Turkey. Higher  volumes contributed  10 percentage points  of growth, while
acquisitions  and price  changes together  added one  percentage point  of sales
growth. The stronger US dollar compared to 2008 reduced full-year growth by four
percentage points.

Operating  income grew  11% to USD  10.0 billion in  2009, which resulted in the
operating  income margin  rising to  22.5% of net  sales from 21.6% in 2008. The
stronger  US dollar  compared to  2008 reduced operating  income growth  by nine
percentage  points. Core operating income,  which excludes exceptional items and
amortization  of intangible assets in both periods, grew 11% to USD 11.4 billion
on  improvements  in  Pharmaceuticals  and  Vaccines  and Diagnostics as well as
productivity  gains in all  divisions. The core  operating income margin rose to
25.8% of net sales from 25.0% in 2008.

Net  income rose 4% to USD 8.5 billion, while  basic EPS was up 3% to USD 3.70.
Core  net income of USD 10.3 billion (+8%)  rose at a slower pace than operating
income  as  increased  contributions  from  associated  companies were partially
reduced by Alcon-related financing costs. Core earnings per share were USD 4.50
in 2009, up from USD 4.18 in 2008.

Fourth quarter
Novartis  ended 2009 strongly,  delivering double-digit  net sales  and earnings
growth  that reflected operational progress in  all divisions and more favorable
currency conditions over the 2008 period.

Net  sales grew  28% (+20% lc)  to USD  12.9 billion. Pharmaceuticals  (+13% lc)
maintained its industry-leading performance based on growth of recently launched
products.  Results  in  Vaccines  and  Diagnostics  (+166% lc) included USD 1.0
billion  of  A  (H1N1)  pandemic  vaccine  and  adjuvant sales. Sandoz (+10% lc)
benefited  from  the  EBEWE  Pharma  specialty  generics business acquisition in
September,  which added five percentage points  to sales growth. Consumer Health
(+13%  lc) had  better results  in all  businesses, particularly  in OTC  on the
first-to-market OTC launch of Prevacid24HR in the US.

Operating  income rose 57% to USD 2.6 billion, with favorable currency movements
having  a positive impact of five percentage points. The operating income margin
improved  to 20.4% in the 2009 quarter from 16.7% in 2008. Core operating income
rose  53% to USD 3.2 billion  in the 2009 quarter  on double-digit contributions
from all businesses, with the core operating income margin expanding to 24.8% of
net sales in the 2009 period from 20.8% in the year-ago quarter.

Net income rose 54% to USD 2.3 billion, while basic EPS rose at the same pace to
USD 1.01 in the 2009 period from USD 0.66 in 2008. Core net income was up 47% to
USD  2.9 billion, which  reflected higher  financing charges  and reduced income
from  associated companies. Core basic earnings  per share (EPS) rose 47% to USD
1.26 in the 2009 quarter from USD 0.86 in the 2008.

More than 30 major approvals in 2009
Novartis   is  transforming  its  portfolio  through  long-term  investments  in
innovation.  More than  30 major regulatory  approvals in  2009 included the new
medicines  Afinitor (cancer),  Onbrez Breezhaler  (chronic obstructive pulmonary
disease)  and  Ilaris  (CAPS);  A  (H1N1)  pandemic flu vaccines; the first-ever
biosimilars in Japan and Canada; and the Prevacid24HR OTC brand in the US. Among
regulatory  submissions  completed  in  2009 included  Gilenia (FTY720, multiple
sclerosis)  in the US and Europe. Other key submissions involved new indications
for  Tasigna  (first-line  CML),  Zometa  (adjuvant  breast cancer) and Lucentis
(diabetic  macular  edema).  Novartis  gained  approvals  in  Japan  for six new
medicines,  while three  more approvals  were received  in January 2010 for Equa
(Galvus),  Exforge (hypertension) and Afinitor. Many submissions are planned for
2010, with  up to  five in  oncology: Afinitor  (neuroendocrine tumors)  and the
development projects SOM230 (Cushing's disease), LBH589 (Hodgkin's lymphoma) and
EPO906 (ovarian cancer).

Improving organizational productivity
Novartis  is  integrating  the  drive  for  greater  productivity  and increased
efficiency  into its operations,  improving speed while  freeing up resources to
focus  on customers and growth initiatives. This  is expected to lead to further
improvement  in  the  Group's  operating  income  margin  in  2010. Forward, the
Group-wide  initiative launched in late 2007 to simplify structures and redesign
the  way Novartis operates,  has been completed  a year ahead  of schedule after
progressing  rapidly and achieving more than  USD 2.3 billion of cumulative cost
savings since 2007 and exceeding its 2010 goal of USD 1.6 billion.

Commitment to patients
Business  success enables Novartis to continue its commitment to patients around
the world, an integral part of the Group's strategy. Medicines and vaccines from
Novartis  were used  in 2009 to  treat and  protect more than 930 million people
around  the world, according to internal estimates. Novartis is helping patients
in  the developing world through key  initiatives focused on neglected diseases,
especially  malaria, leprosy, dengue fever and treatment-resistant tuberculosis.
Treatments   worth   USD   1.5 billion   were   contributed   through   Novartis
access-to-medicine programs in 2009, reaching 79.5 million patients in need.

2010: Delivering on strategic priorities
Novartis  expects 2010 to be a year  of significant progress in implementing its
strategy  to meet  the growing  needs of  patients and aging societies worldwide
through its healthcare portfolio.

Industry-leading growth
Novartis  expects to maintain momentum in 2010 and increase Group net sales at a
mid-single-digit  percentage rate  in local currencies[1]  based on  the rapidly
growing  contributions of recently launched products and targeted investments in
emerging growth markets.

Pharmaceuticals expects to continue the strong volume growth achieved in 2009 on
the  rapid expansion of recently  launched products, implementing new commercial
models  to adapt to  local market needs  while expanding in high-growth markets.
However, pricing conditions are uncertain given industry challenges that include
healthcare  reforms (particularly in the US  and Turkey) and biennial price cuts
in  Japan, while therapeutic-class generic competition  is also set to start for
Diovan  in 2010 ahead  of the  end of  exclusivity in  Europe (2011)  and the US
(September  2012). Reflecting these factors, Pharmaceuticals  net sales in 2010
are expected to grow at a mid- to high-single digit rate in local currencies.

Vaccines  and Diagnostics  is preparing  the launch  of Menveo,  a developmental
vaccine  against four serogroups of  meningococcal meningitis. European approval
is  expected in early 2010 after a positive opinion in December 2009, while a US
regulatory  decision is also  expected in the  first half of  the year. Novartis
plans  to continue delivering A (H1N1) pandemic influenza vaccines and adjuvants
in 2010; however, sales estimates for the year are well below 2009 levels.

Sandoz  expects to increase  its pace of  growth in 2010. The  addition of EBEWE
Pharma's  specialty  injectables  business  in  September 2009 has created a new
global growth platform by improving access to price competitive quality oncology
medicines.

Consumer  Health aims  to keep  growing ahead  of its  markets in 2010. The late
2009 US  launch of Prevacid24HR, the first OTC version of this drug for frequent
heartburn  pain, has created an important new brand. Novartis will launch an OTC
version of pantoprazole, another proton pump inhibitor, in 14 European countries
in the second quarter of 2010 after gaining rights from Nycomed.

The  addition  of  Alcon,  the  global  leader  in eye care, will strengthen the
Novartis healthcare portfolio and provide a greater presence in the fast-growing
global  eye care sector.  Novartis announced on  January 4 its intention to gain
full ownership of Alcon by first completing the April 2008 agreement with Nestlé
S.A. to acquire a 77% majority stake and subsequently entering into an all-share
direct  merger with  Alcon for  the remaining  23% minority stake.  This merger,
which  will be implemented under the Swiss Merger Act, is in the interest of all
stakeholders  and will provide  the needed clarity  on Alcon's future. Following
the  merger, Alcon  will become  a new  Novartis division that incorporates CIBA
Vision and certain Novartis ophthalmic medicines.

Board selects new CEO and simplifies the top leadership organization

The  Board  has  accepted  Dr.  Daniel  Vasella's  proposal  to complete the CEO
succession  process after serving  14 years as CEO  and 11 years as Chairman and
CEO,  by appointing Joe Jimenez, currently  Head of the Pharmaceuticals Division
as  Novartis' new CEO. Dr. Vasella will continue  in his role as Chairman of the
Board  concentrating on strategic priorities. This completes the succession plan
which  began in 2008 with  the creation of  a transitional COO  position and the
appointment  of  new  divisional  management.  The  business  portfolio has been
successfully  transformed to focus  on healthcare, the  research organization is
highly  respected  and  the  pipeline  is  full  and  highly  valued.  Novartis'
reputation  is among the best  in its industry and  beyond, led by a world-class
leadership team. So, it is timely to transition to a new CEO.

The  Board has selected Joe Jimenez with complete trust in his global leadership
capabilities,   based   on  his  outstanding  performance  track  record,  broad
international  business experience and  his ability to  provide direction, align
and  engage  people.  These  skills  will  be crucial for implementing Novartis'
strategy.  Jimenez  will  take  over  the  CEO  responsibilities  as of February
1, 2010.

David  Epstein, currently  Head of  the Novartis  Oncology business, the fastest
growing  unit  in  Pharmaceuticals,  will  become  Head  of  the Pharmaceuticals
Division.  Jon Symonds will  take over as  CFO on February 1, 2010, from Raymund
Breu, who will retire on March 31, having reached the mandatory retirement age.

Simplifying  its leadership structure Novartis reduces the size of the Executive
Committee  from  12 to  9. They  will  be  Joe Jimenez, CEO; Mark Fishman, M.D.,
Global  Head of  NIBR (The  Novartis Institute  for BioMedical  Research); David
Epstein,  Division Head  Pharmaceuticals; Jeff  George, Division  Head Generics;
George  Gunn, Division Head Consumer Health:  Andrin Oswald, M.D., Division Head
Vaccines  and Diagnostics; Jon Symonds, CFO; Thomas Werlen, General Counsel; and
Jürgen Brokatzky-Geiger, Global Head Human Resources.

Furthering   the   delayering  efforts,  three  executive  positions  have  been
eliminated:  COO,  Head  Corporate  Affairs,  and  Head  Group Quality/Technical
Operations.

Two  smaller units,  Group Quality  Assurance, headed  by Juan  Andres and Group
Country  Management/External Affairs, led  by Joe Jimenez  ad interim, report to
the CEO. Corporate Audit and Compliance reports to the Chairman.

In  the context  of this  new organizational  structure Joerg Reinhardt, Andreas
Rummelt  and Thomas  Wellauer have  decided to  pursue their  careers outside of
Novartis.  We are thankful to each of them for their many contributions over the
many  years to the success  of Novartis. All changes  will be effective February
1, 2010.

AGM proposals for dividend rise and consultative vote on Compensation System to
further strengthen governance in the wake of the global financial crisis, and
against the mandatory separation of the responsibilities of Chairman and CEO

The Board proposes a dividend payment of CHF 2.10 per share for 2009, up 5% from
CHF  2.00 per share  for 2008 and  representing the  13(th) consecutive dividend
increase  since the  creation of  Novartis in  December 1996. The average annual
dividend  increased by 11.7% in  CHF, while the  annual total shareholder return
since  1996 increased by 9%. Dividends paid  for 2009 on outstanding shares will
amount  to  USD  4.6 billion  and  the  payout  ratio is estimated at 55% of net
income.  Based on the year-end 2009 share price of CHF 56.50, the dividend yield
is  3.7%. The  payment  date  is  March  5, 2010. All issued shares are dividend
bearing, except 167.7 million treasury shares.

The  Board further proposes  that Novartis become  the first large, listed Swiss
company  to  include  a  consultative  vote  on  its  Compensation System in its
Articles  of Incorporation. Such a  vote is to be  held before every significant
change  in the Compensation System,  but at least at  every third Annual General
Meeting (AGM). The three-year cycle for votes also allows shareholders to take a
longer-term  view when examining the  sustainability of the Compensation System.
Sustainable  compensation systems are harmonized with multi-year business plans,
and only attain their full effect when used unchanged for several years, in part
since  it takes time for  them to be understood  by employees. This proposal, if
approved  by shareholders, would be implemented  following the upcoming AGM. The
proposal  complements  the  corporate  governance  initiatives that Novartis has
instituted  over the past  year. In 2009 a  new Risk Committee  of the Board was
established  that oversees  enterprise risk  management processes  for the Group
while   monitoring  risk-adjusted  decision-making.  In  addition,  a  "clawback
provision"  for incentive  payments will  be progressively  included in employee
contracts.  This will  allow Novartis  to retract  any unjustified payment to an
employee  if  later  it  is  found  to  be  based  on financial misstatements or
unethical  business behavior. This will  further enhance Novartis' governance in
the  wake of the global financial crisis,  which revealed among some companies a
lack  of standards and  oversight which eventually  contributed to the worldwide
recession.

The  Board  recommends  to  shareholders  to  vote  against  the  proposal  by a
shareholder  group  to  introduce  a  yearly  separate  consultative vote on the
Compensation  Report, stating  that such  a vote  is retrospective as it relates
only  to  the  previous  business  year.  This  vote  would  not  allow  a  true
consultation  since shareholders would only express  their views on matters that
had  already occurred. Shareholders also do not  have the essential basis for an
informed  opinion  on  compensation  awarded,  as  this implies knowledge of the
pre-agreed  objectives and the  degree to which  these objectives have been met.
For  competitive reasons it would be against  the interest of the corporation to
disclose yearly and long-term objectives and individual performance assessments.
Setting  the compensation of executives is an essential management instrument of
the  Board that may not be rescinded.  Swiss company law mandates that this duty
must be allocated to the Board.

The Board also recommends to shareholders to vote against a mandatory separation
of  the Chairman of  the Board and  CEO functions, regarding  such a rule as too
rigid  and  not  in  the  best  interests  of shareholders, as it would restrict
freedom  and prevent the flexible adaptation of the Group's leadership structure
to  circumstances and  strategic requirements.  Novartis has  long complied with
international  best practice based on the  Board's decision to combine the roles
of  Chairman  and  CEO  with  the  appointments  of  a  Lead  Director  and only
Independent Directors for the most important Board Committees.

Finally, the Board proposes the re-election of Dr. Daniel Vasella and Marjorie
M.T. Yang, each for a three-year term, and Hans-Joerg Rudloff for a one-year
term (as he will reach the age limit).

Shareholders will vote on these and other proposals at the next Annual General Meeting scheduled for February 26, 2010.

BUSINESS REVIEW

Full year

Net sales

                               2009     2008   % change

                              USD m    USD m   USD   lc

---------------------------------------------------------

  Pharmaceuticals            28 538   26 331     8   12

  Vaccines and Diagnostics    2 424    1 759    38   39

  Sandoz                      7 493    7 557    -1    5

  Consumer Health             5 812    5 812     0    5

---------------------------------------------------------

  Net sales                  44 267   41 459     7   11

---------------------------------------------------------

Pharmaceuticals: USD 28.5 billion (+8%, +12% lc)
All  geographic regions  and therapeutic  areas contributed  to the double-digit
expansion  in local currencies,  driven by recently  launched products (USD 4.7
billion,  +81% lc) that increased  their share of net  sales to 16% in 2009 from
10% in  2008. This  group  of  rapidly  growing  products  - including Lucentis,
Exforge,  Exjade, Exelon Patch,  Reclast/Aclasta, Tekturna/Rasilez, Afinitor and
Ilaris  - provided  eight percentage  points of  the division's 12% lc net sales
growth in 2009.

Oncology (USD 9.0 billion, +14% lc) remained the largest franchise and ranks No.
2 in the global oncology segment, led by sustained growth of Gleevec/Glivec (USD
3.9 billion,  +12%  lc)  and  three  additional  products  -  Zometa, Femara and
Sandostatin  - that each achieved more than  USD 1 billion of sales. Exforge and
Tekturna/Rasilez  (high  blood  pressure)  and  Galvus  (type  2 diabetes) drove
expansion   of   Cardiovascular   and  Metabolism  (USD  8.8 billion,  +9%  lc),
complementing Diovan (USD 6.0 billion, +6% lc) as Novartis expanded its position
as  the global leader  in hypertension. Lucentis  (USD 1.2 billion, +47% lc) and
Exelon  (USD 954 million, +22% lc) fueled growth in Neuroscience and Ophthalmics
(USD 4.9 billion, +12% lc).

All  regions benefited  from the  product portfolio transformation, particularly
Europe  (USD 10.5 billion,  +12% lc)  as the  largest region and generating more
than   20% of  sales  from  recently  launched  products.  Also  delivering  top
performances were Latin America and Canada (USD 2.5 billion, +13% lc), while the
US  (USD 9.5 billion, +11% lc)  and Japan (USD 3.1 billion,  +9% lc) both showed
renewed  growth.  All  six  top  emerging  markets  (USD 2.6 billion, +19% lc) -
Brazil,  China,  India,  Russia,  South  Korea  and  Turkey - advanced at robust
double-digit rates.

Vaccines and Diagnostics: USD 2.4 billion (+38%, +39% lc)
A  rapid response  after the  outbreak of  the A  (H1N1) pandemic in April 2009
enabled  Vaccines and Diagnostics to deliver more than 100 million vaccine doses
to  governments around the world in only a few months, providing USD 1.0 billion
of  net sales from  pandemic vaccines and  adjuvants in 2009. Pediatric vaccines
and  strong growth in emerging markets  helped offset price pressure on seasonal
influenza  vaccines and a decline in tick-borne encephalitis vaccines in Europe.
Diagnostics sales were slightly lower.

Sandoz: USD 7.5 billion (-1%, +5% lc)
Consistent  growth in 2009 at a stronger  pace than in 2008 reflected the impact
of  new product launches, a sharper commercial focus in both mature and emerging
markets,  and the US returning  to growth. To the  benefit of customers, a price
decline  of seven percentage points  from price erosion was  more than offset by
volume growth of 11 percentage points from new product launches. Retail generics
and biosimilars in Germany (+4% lc) reached a leading 29% share from new product
launches  and volume growth in  a challenging market. A  total of 25 new product
launches,  eight more than 2008, underpinned  US retail generics and biosimilars
(+5%).  Asia-Pacific  (+17%  lc)  and  Russia  (+19%  lc)  were  also  among top
performers. The EBEWE acquisition in September, which added one percentage point
to  sales growth  in 2009, provided  a strong  platform for growth in injectable
oncology medicines.

Consumer Health: USD 5.8 billion (+0%, +5% lc)
All  businesses achieved faster underlying  growth than their respective markets
despite  the  difficult  economic  conditions.  CIBA  Vision  was the industry's
fastest-growing  contact  lens  and  lens  care  company  on the strength of new
product  introductions.  OTC  delivered  an  increasingly  positive performance,
driven  by portfolio innovation and the  successful US launch of Prevacid24HR in
November 2009. Animal Health grew ahead of the competition in the US.

Core operating income

                                        2009         2008     Change

                                            % of         % of
                                             net          net
                                     USD m sales  USD m sales      %

---------------------------------------------------------------------

 Pharmaceuticals                     9 068  31.8  8 249  31.5     10

 Vaccines and Diagnostics              719  29.7    309  18.1    133

 Sandoz                              1 395  18.6  1 421  18.8     -2

 Consumer Health                     1 118  19.2  1 125  19.4     -1

Corporate income and expenses, net -863   -785 ---------------------------------------------------------------------

 Core operating income              11 437  25.8 10 319  25.0     11

---------------------------------------------------------------------

Pharmaceuticals

Operating income rose 11% to USD 8.4 billion and the operating income margin was
29.4% of  net  sales,  up  from  28.8% in  2008. Core operating income (USD 9.1
billion,  +10%, including adverse currency impact of six percentage points) also
grew  well ahead of net sales on the strong volume expansion in local currencies
and  productivity  gains  of  nearly  USD  1 billion, which resulted in the core
operating income margin rising 0.3 percentage points to 31.8% of net sales.

The  improved core operating income performance also absorbed a dilution of 1.1
percentage points in lower Other Revenues, mainly due to the end of Betaseron(®)
royalties  in late 2008. The operational  expansion, along with reinvestments of
some  productivity gains, enabled major investments  in new product launches and
rapid  expansion  of  top  emerging  markets  such  as  China. Marketing & Sales
expenses   fell   1.6 percentage   points  to  29.3% of  net  sales  in  2009 as
productivity  improvements  more  than  offset  costs  for the ongoing worldwide
launches  of many new products including  Galvus, Exelon Patch, Valturna and the
Tekturna/Rasilez  portfolio. R&D investments supported the start of 14 new Phase
III trials in 2009, with R&D representing 20.0% of net sales in 2009 compared to
20.3% in  2008. Among  items  excluded  from  core operating income in 2009 that
totaled  USD 676 million,  which was  largely unchanged  from USD 670 million in
2008, were  a USD  318 million increase  in legal  provisions as part of pending
settlements  to resolve US federal  investigations into past marketing practices
of  Trileptal.  Also  in  2009, the  ongoing  strong sales performance of Famvir
outside  the US enabled  the partial reversal  of an impairment  charge taken in
2007, providing a one-time gain of USD 100 million.

Vaccines and Diagnostics
Operating  income of USD 372 million rose  sharply from USD 78 million in 2008,
with  the  operating  income  margin  rising  to  15.3% from  4.4% in 2008. Core
operating  income of USD 719 million  in 2009 included substantial contributions
from  A (H1N1) pandemic flu vaccine sales enabled by significant development and
manufacturing  investments earlier in the year. Clinical trials for the pandemic
vaccines  and investments in the  late-stage meningitis development vaccines led
to  R&D costs  still rising  as a  percentage of  net sales  in 2009 compared to
2008. Results  in 2008 included sales from major deliveries of A (H5N1) pandemic
flu vaccines.

Sandoz
Operating  income  declined  1% to  USD  1.1 billion,  which included an adverse
currency  impact  of  11 percentage  points,  with  the  operating income margin
unchanged  at  14.3% of  net  sales.  Core  operating income fell 2% to USD 1.4
billion.  Improved business  conditions in  key markets  and productivity gains,
particularly  in Marketing &  Sales and R&D,  reduced the total  cost base while
supporting  investments  in  emerging  markets  and  new  products. However, the
underlying  improvements were more than offset  by significant price erosion and
the  adverse  currency  impact,  resulting  in  the core operating income margin
falling 0.2 percentage points to 18.6% of net sales.

Consumer Health
Operating  income fell 3% to USD 1.0 billion, which included an adverse currency
impact  of 10 percentage  points, and  the operating  income margin in 2009 fell
0.5 percentage  points to  17.5% of net  sales. Core  operating income benefited
from  the strong underlying business  expansion and productivity gains. However,
it  declined 1% to USD 1.1 billion due to  the adverse currency impact and major
investments  to launch the OTC product Prevacid24HR in the US, which resulted in
the  core operating  income margin  declining slightly  to 19.2% of net sales in
2009 from 19.4% in 2008.

Corporate Income & Expense, net
Corporate  income and expense, net, as  well as related core measures, increased
mainly due to higher pension expenses.

Fourth quarter

Net sales

                             Q4 2009   Q4 2008   % change

                               USD m     USD m   USD    lc

------------------------------------------------------------

  Pharmaceuticals              7 773     6 430    21    13

  Vaccines and Diagnostics     1 387       491   182   166

  Sandoz                       2 143     1 804    19    10

  Consumer Health              1 623     1 352    20    13

------------------------------------------------------------

  Net sales                   12 926    10 077    28    20

------------------------------------------------------------

Pharmaceuticals: USD 7.8 billion (+21%, +13% lc)
Sustained  dynamic growth in  the 2009 fourth quarter  driven by rapid uptake of
new  products  and  ongoing  expansion  in  all major markets. Recently launched
products  provided USD 1.4 billion  of net sales  in the 2009 quarter, rising to
18% of  the division's  net sales  from 12% in  the 2008 quarter. These products
also  provided eight  percentage points  of the  13% lc net  sales growth in the
quarter.  Among new product  launches initiated in  the 2009 quarter were Onbrez
Breezhaler (COPD) in Germany following European regulatory approval in November.

Recently  launched products  provided important  contributions in  Oncology (USD
2.5 billion,  +14%  lc),  which  benefited  from  the  new  anti-cancer medicine
Afinitor  (USD  32 million)  approved  in  2009 and new clinical data supporting
Tasigna  (USD  68 million,  +101%  lc).  Cardiovascular and Metabolism (USD 2.4
billion, +10% lc) benefited from rapid expansion of the diabetes medicine Galvus
(USD  66 million, +211%  lc), while  Novartis expanded  its share  of the global
branded anti-hypertension market on gains recorded for Diovan in all key markets
as  well  as  the  rollout  of  new  single-pill combination therapies involving
Tekturna/Rasilez  and  Exforge.  The  ophthalmics  medicine  Lucentis  (USD 374
million, +44% lc) also continued to show strong gains.

Europe (USD 2.9 billion, +14% lc) solidified its position as the largest region.
Gains were also seen in the US (USD 2.5 billion, +12% lc), while Japan (USD 889
million,  +9% lc) continued  to benefit from  new launches in  2009. The six top
emerging  markets (USD 712 million,  +22% lc) advanced  at a rapid  pace, led by
gains  in  China,  Russia  and  India  that more than offset recent governmental
cost-containment measures in Turkey.

Vaccines and Diagnostics: USD 1.4 billion (+182%, +166% lc)
USD 1.0 billion of net sales in the 2009 period came from deliveries of A (H1N1)
pandemic  flu  vaccines  and  adjuvants.  Seasonal  flu  vaccines were adversely
impacted  by a price decline, while pediatric vaccines helped offset lower sales
of tick-borne encephalitis vaccines.

Sandoz: USD 2.1 billion (+19%, +10% lc)
Solid  growth in  key markets  was in  line with  the consistent pace throughout
2009, with  completion of the EBEWE Pharma  acquisition in September adding five
percentage  points  of  growth  in  the  2009 quarter.  US  retail  generics and
biosimilars  (+24%) achieved a third consecutive  quarter of growth in 2009 with
more new product launches than 2008. German retail generics and biosimilars (+1%
lc)  extended its lead in a deteriorating environment. Key emerging markets kept
up their expansion, particularly in Asia-Pacific (+10% lc).

Consumer Health: USD 1.6 billion (+20%, +13% lc)
Very  strong  growth  across  all  businesses  was  led  by  OTC  expansion at a
double-digit  rate  in  local  currencies  on  the  strength of the US launch of
Prevacid24HR  in  November  and  strong  demand  for  "cough  &  cold" products.
Continued  momentum of  new contact  lens products  supported CIBA Vision, while
Animal Health advanced on market share gains in the US.

Core operating income

                                          Q4 2009         Q4 2008      Change

                                                % of            % of
                                                 net             net
                                       USD m   sales   USD m   sales        %

-------------------------------------------------------------------------------

  Pharmaceuticals                      2 215    28.5   1 803    28.0       23

  Vaccines and Diagnostics               653    47.1      55    12.5       NM

  Sandoz                                 356    16.6     296    16.4       20

  Consumer Health                        248    15.3     209    15.5       19

Corporate income and expenses, net -268   -273 -------------------------------------------------------------------------------

  Core operating income                3 204    24.8   2 090    20.8       

53

-------------------------------------------------------------------------------

Pharmaceuticals

Operating  income rose 22% to  USD 1.9 billion, and  the operating income margin
improved  0.2 percentage  points  to  24.5% of  net sales. Core operating income
advanced  23%, well  ahead  of  sales  and  included  four  percentage points of
positive currency impact.

The  strong business  expansion, with  net sales  rising 13% lc, and benefits of
productivity  initiatives resulted  in double-digit  core operating income gains
after  investments in product launches,  key development projects and geographic
expansion.  Marketing & Sales expenses were  30.3% of net sales, declining three
percentage  points  from  the  2008 period.  R&D investments also benefited from
productivity  efforts, but  remained largely  steady at  21.0% of net sales amid
investments  in oncology, biologics and molecular  diagnostics. As a result, the
core  operating income margin rose 0.5 percentage  points to 28.5% of net sales.
Cost  of  Goods  Sold  were  18.1% of  net  sales, an increase of 2.7 percentage
points,  reflecting higher  Lucentis royalties  and the  short-term impact of an
accelerated  inventory reduction program in the quarter. Among exceptional items
excluded  in core operating income for  2009 that totaled USD 309 million were a
USD  318 million increase in legal provisions  as part of pending settlements to
resolve  US federal investigations into past marketing practices of Trileptal as
well  as a  one-time gain  of USD  100 million from  the partial  reversal of an
impairment  charge in 2007 for Famvir due to ongoing strong sales growth outside
the  US in  the meantime.  Core adjustments  in 2008 excluded  total exceptional
items of USD 241 million.

Vaccines and Diagnostics
Operating income rose to USD 583 million from USD 26 million in the 2008 period,
while core operating income of USD 653 million in the 2009 quarter reflected the
recognition  of exceptional  contributions from  sales of  A (H1N1) pandemic flu
vaccines during the period that were made possible by significant investments in
development and manufacturing earlier in the year.

Sandoz

Operating  income  grew  11% to  USD  221 million,  which  was  reduced by seven
percentage  points of adverse currency impact. Core operating income improved on
strong  economies of scale and high growth  in the US, advancing 20% to USD 356
million.  As a result, the core  operating income margin improved 0.2 percentage
points  to 16.6% of net sales.  Core results excluded higher acquisition-related
charges  and exceptional items totaling USD 135 million in 2009 (including EBEWE
acquisition  costs and restructuring  in Germany) compared  to USD 96 million in
2008.

Consumer Health
Operating  income  was  up  9% to  USD  207 million  in  the 2009 quarter, which
included  nine  percentage  points  of  positive  currency  impact. However, the
operating  income margin declined  1.3 percentage points to  12.8% of net sales.
Core  operating income, which  excluded higher impairment  and other exceptional
charges  of USD  22 million in  2009 over the  2008 period, grew 19% to USD 248
million  as productivity  gains and  cost controls  helped free up resources for
increased Marketing & Sales investments for the launch of Prevacid24HR in the US
and  R&D projects. As a  result, the core operating  income margin declined only
0.2 percentage points to 15.3% of net sales.

Corporate Income & Expense, net
Net corporate expenses in the fourth quarter of 2009 were slightly lower than in
the  2008 period, as positive currency exchange movements and a gain on the sale
of financial assets more than offset higher pension costs.

FINANCIAL REVIEW

Full year and fourth quarter

                                    2009   2008 Change Q4 2009 Q4 2008 Change

                                   USD m  USD m      %   USD m   USD m      %

------------------------------------------------------------------------------

 Core operating income            11 437 10 319     11   3 204   2 090     

53

 Income from associated companies  1 051    839     25     252     266     -5

 Financial income                    198    384    -48     104      58     79

 Interest expense                   -551   -290     90    -156     -76    105

 Taxes                            -1 868 -1 751      7    -512    -371     38

------------------------------------------------------------------------------

 Core net income                  10 267  9 501      8   2 892   1 967     

47

------------------------------------------------------------------------------

 Core basic EPS (USD)               4.50   4.18      8    1.26    0.86     

47

------------------------------------------------------------------------------

Income from associated companies
For the fourth quarter of 2009, income from associated companies rose 10% to USD
107 million,  but fell 34% to USD  293 million for the full  year, mainly due to
USD  189 million of exceptional charges in  the third quarter of 2009 related to
Roche's  restructuring of Genentech  and Alcon's decision  to stop a development
project.  Core results in the fourth  quarter declined 5% to USD 252 million due
to  losses from Idenix  after it became  an associated company  when the Group's
shareholding  fell below 50% in late 2009. Full-year core income from associated
companies rose 25% to USD 1.1 billion on increased underlying contributions from
Roche  as well as full-year  equity accounting of the  25% Alcon stake after the
mid-2008 purchase.

Financial income and interest expense
Financial  income rose  79% to USD  104 million in  the fourth quarter of 2009,
primarily  from  realized  gains  and  lower  impairment  charges for marketable
securities as well as average liquidity of USD 15.7 billion compared to USD 7.2
billion  in the  2008 quarter. Interest  expense more  than doubled in the 2009
quarter to USD 156 million following the issuance of US dollar and euro bonds in
the  first half of  the year. Reflecting  these same factors  for the full year,
financial  income declined 48% to USD  198 million, while interest expenses rose
90% to USD 551 million.

Taxes

The  tax rate (taxes as a percentage of pre-tax income) in the fourth quarter of
2009 was  13.7% compared to 14.3% in the prior-year quarter, while the full-year
tax  rate rose to 14.8% from 14.1%. For core results, the tax rate in the fourth
quarter  of 2009 declined to  15.0% from 15.9% in the  2008 period. The core tax
rate in 2009 was 15.4%, down from 15.6% in 2008.

Net income
In the fourth quarter of 2009, net income rose 54% to USD 2.3 billion, while net
income  for the full year  rose 4% to USD 8.5 billion.  Core net income advanced
47% to  USD 2.9 billion in the  fourth quarter of 2009. For  the full year, core
net income rose 8% to USD 10.3 billion.

Earnings per share
Basic  earnings per share (EPS)  in the fourth quarter  were up 53% to USD 1.01
from  USD 0.66 in  the 2008 quarter,  while full-year  basic EPS  rose 3% to USD
3.70 compared  to USD 3.59 in 2008, at a slightly slower pace than net income in
2009 due  to higher net income attributable to minority interests. For quarterly
core  results, basic EPS rose in line  with core net income in the 2009 quarter,
up  47% to USD 1.26 from USD 0.86 in  the 2008 period, while full-year basic EPS
grew 8% to USD 4.50 from USD 4.18 in 2008.

Balance sheet
The  acquisition  of  EBEWE  Pharma's  specialty  generics business and USD 7.1
billion  of investments in marketable securities  with proceeds from bond issues
in  2009 led to an increase  in total assets, which  rose to USD 95.6 billion in
2009 from USD 78.3 billion in 2008.

The Group's equity rose to USD 57.5 billion at December 31, 2009, from USD 50.4
billion  at the start  of the year.  The increase resulted  mostly from USD 8.5
billion  in net income in 2009, actuarial  gains of USD 0.9 billion and currency
translation  gains of  USD 0.8 billion.  Other equity  movements provided  a net
increase  of USD 0.8 billion,  mainly from share-based  compensation of USD 0.6
billion.  These contributions more than offset  the dividend payment of USD 3.9
billion in the 2009 first quarter.

The  Group's debt/equity  ratio rose  to 0.24:1 at  the end  of 2009 compared to
0.15:1 at  the end  of 2008, reflecting  issuance of  a USD  5 billion bond (two
tranches)  in the US in  the first quarter and  a EUR 1.5 billion bond (USD 2.1
billion)  in the second quarter. At the  end of 2009, the Group's financial debt
of  USD 14.0 billion consisted of USD 5.3 billion in current and USD 8.7 billion
in non-current liabilities.

Overall  liquidity  rose  to  USD  17.4 billion  at December 31, 2009, more than
double  the year-end  2008 level of  USD 6.1 billion,  underpinned by increasing
cash  flow from operations and proceeds  from the bond issues. Novartis returned
to  a net liquidity position at the  end of 2009, which stood at USD 3.5 billion
compared to net debt (financial debt net of liquidity) of USD 1.2 billion at the
end of 2008.

Credit  agencies maintained their ratings  of Novartis debt during 2009. Moody's
rated  the  Group  as  Aa2  for  long-term  maturities  and  P-1  for short-term
maturities,  and Standard & Poor's had ratings of AA- for long-term and A-1+ for
short-term  maturities.  Fitch  had  a  long-term  rating of AA and a short-term
rating of F1+.

Cash flow
Cash  flow from  operating activities  improved 25% in  2009 to USD 12.2 billion
based  on  higher  profitability  and  initiatives  to  reduce  working  capital
requirements, which fell USD 1.3 billion from 2008 levels.

Cash  outflows from investing  activities amounted to  USD 14.2 billion in 2009
compared  to USD 10.4 billion in 2008, as lower capital expenditures of USD 1.9
billion  (which declined to 4.3% of net sales in 2009 compared to 5.1% in 2008)
was  more  than  offset  by  investments  in marketable securities and increased
investments  totaling USD 12.3 billion in  intangible, non-current and financial
assets, including the EBEWE Pharma generics acquisition.

Cash  inflows from financing  activities were a  net USD 2.8 billion in 2009, as
proceeds  of USD 7.1 billion from  the bond issues were  partially offset by the
dividend  payment of USD 3.9 billion for  2008 and other items totaling USD 0.4
billion.

Free  cash flow before dividends rose 24% to USD 9.4 billion in 2009, reflecting
the  strong  focus  on  business  performance  and  control of fixed and working
capital.

PHARMACEUTICALS PRODUCT REVIEW
Note:  Net  sales  growth  data  refer  to  full-year  2009 performance in local
currencies.

Cardiovascular and Metabolism

Diovan  (USD 6.0 billion, +6%  lc) achieved solid  worldwide growth based on its
status  as the  only medicine  in the  angiotensin receptor  blocker (ARB) class
approved for all three indications to treat high blood pressure, high-risk heart
attack  survivors and heart failure. Japan now accounts for 20% of annual sales,
while growth was seen in Europe, where the expected entry of generic versions of
losartan,  another medicine in the ARB segment, was delayed until the first half
of  2010. In the US  (+4%), Diovan increased  its leadership of  the ARB segment
despite  the overall  shrinking of  the branded  anti-hypertension market due to
increasing use of generic medicines in other anti-hypertensive classes.

Exforge (USD 671 million, +72% lc), a single-pill combination of the angiotensin
receptor  blocker Diovan (valsartan) and the calcium channel blocker amlodipine,
has  delivered above-market growth and set new standards for high blood pressure
combination  therapies  since  its  launch  in  2007. Exforge  HCT, which adds a
diuretic,  was launched in  the US in  April 2009 as a  single-pill therapy with
three medicines. Exforge received approval in Japan in January 2010.

Tekturna/Rasilez  (USD  290 million,  +104%  lc),  the  first  in a new class of
medicines  known as  direct renin  inhibitors to  treat high blood pressure, has
been  growing consistently since  its launch in  2007 based on positive 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.  Valturna - a  single-pill combination with  Diovan (valsartan) - was
launched  in the US in late  2009, joining the group of single-pill combinations
that involve aliskiren, the active ingredient in Tekturna/Rasilez. A single-pill
combination  of  aliskiren  and  amlodipine  was  submitted  for US and European
approvals  in 2009, and a  triple-combination with amlodipine  and a diuretic is
expected to be submitted in 2010.

Galvus/Eucreas (USD 181 million, +327% lc), oral treatments for type 2 diabetes,
have  achieved rapid success  in many European,  Latin American and Asia-Pacific
markets  since  first  launched  in  2007. Galvus  and  Eucreas,  a  single-pill
combination  of Galvus with  metformin that accounts  for the majority of sales,
have  outperformed a competitor medicine in the DPP-4 segment in some countries.
Galvus was approved in Japan in January 2010 with the brand name Equa.

Oncology

Gleevec/Glivec (USD 3.9 billion, +12% lc), a targeted therapy for some forms of
chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST),
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 in 2009 was for use in adjuvant (post-surgery) GIST patients,
which is now approved in more than 55 countries in North America, Europe and
Asia-Pacific.

Tasigna  (USD 212 million, +145% lc), a  second-line therapy for patients with a
form of chronic myeloid leukemia (CML) resistant or intolerant to prior therapy,
including  Gleevec/Glivec, has gained rapid acceptance following its approval in
more  than  80 countries.  In  December  2009, Tasigna  was submitted for US and
European  regulatory approvals for first-line use in CML after new data from the
global  ENESTnd trial, the largest head-to-head comparison of a targeted therapy
against  Glivec  ever  conducted,  showed  Tasigna  produced  faster  and deeper
responses  than  Glivec  in  newly  diagnosed  CML patients. Trials are underway
examining  the use of Tasigna in CML with suboptimal response to Glivec, as well
as a Phase III trial in patients with GIST.

Zometa (USD 1.5 billion, +9% lc), an intravenous bisphosphonate therapy for
patients with certain types of cancer that has spread to bones, is growing due
to improved compliance and use in existing indications. US and European
regulatory submissions were completed in late 2009 for the use of Zometa in
adjuvant breast cancer in premenopausal women based on published anticancer data
for this indication. Studies are underway to review potential benefits in other
tumor types.

Femara (USD 1.3 billion, +16% lc), an oral therapy for postmenopausal women with
hormone-sensitive breast cancer, saw strong sales growth in 2009 due to growth
in the initial adjuvant (post-surgery) setting. In August 2009, "The New England
Journal of Medicine" published results from the landmark BIG 1-98 study
affirming that the five-year upfront use of Femara after surgery was an optimal
treatment approach for postmenopausal women with early-stage, hormone-receptor
positive breast cancer. These data were submitted in the US and Europe for
inclusion in product information.

Sandostatin (USD 1.2 billion, +7% lc), for patients with acromegaly and symptoms
associated with neuroendocrine 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. Recent clinical trial data
demonstrated a significant delay in tumor progression in patients with
metastatic neuroendocrine tumors of the midgut treated with Sandostatin LAR.
These data formed the basis of a recent US National Comprehensive Cancer Network
(NCCN) update on treatment guidelines for neuroendocrine tumors.

Exjade (USD 652 million, +27% lc), currently approved in more than 90 countries
as the only once-daily oral therapy for transfusional iron overload, received
regulatory approvals in 2009 in the US, Europe, Switzerland and other countries
to extend the dose range to 40 mg/kg. This new dosing range provides a new
option to patients who require dose intensification due to high iron burdens.
Novartis submitted new safety information to health authorities worldwide in
mid-2009. The new labeling was approved in Europe in November, providing new
guidance on the selection of appropriate myelodysplastic syndrome (MDS) and
malignant disease patients for Exjade therapy. US and Japanese regulatory
authorities are also reviewing this data.

Afinitor (USD 70 million), an oral inhibitor of the mTOR pathway, was launched
in the US, Europe and Switzerland after gaining regulatory approvals in 2009 as
a treatment for advanced renal cell carcinoma (RCC, kidney cancer) following
VEGF-targeted therapy. 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. Two
potential regulatory submissions are planned for 2010 based on the outcome of
clinical trials of this medicine in patients with neuroendocrine tumors (NET) as
well as tuberous sclerosis complex (TSC). 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 1.2 billion, +47% lc), a biotechnology eye therapy now approved in
more than 80 countries, delivered sustained growth on top performances in
France, the United Kingdom, Australia and Japan. Lucentis is the only treatment
proven to maintain and improve vision in patients with "wet" age-related macular
degeneration, a leading cause of blindness in people over age 50. Lucentis was
submitted in December 2009 for European regulatory approval for treatment of
visual impairment due to diabetic macular edema (DME), an eye condition related
to longstanding diabetes that may lead to blindness. Late-stage clinical trials
are underway in other eye conditions. Genentech holds the US rights to this
medicine.

Exelon/Exelon Patch (USD 954 million, +22% lc), a therapy for mild to moderate
forms of Alzheimer's disease dementia as well as dementia linked with
Parkinson's disease, achieved more than half of its sales from Exelon Patch, the
novel skin patch launched in late 2007 that is now available in more than 60
countries worldwide.

Reclast/Aclasta (USD 472 million, +88% lc), a once-yearly infusion therapy for
osteoporosis, continues to expand on increasing patient access to infusion
centers and a broad range of use in patients with various types of this
debilitating bone disease. Approvals have been received for up to six
indications, including the treatment of osteoporosis in men and postmenopausal
women.

Xolair (USD 338 million, +65% lc, Novartis sales), a biotechnology drug for
moderate to severe persistent allergic asthma in the US and severe persistent
allergic asthma in Europe, maintained solid growth due to its global presence
and approvals in more than 80 countries, including Japan since early 2009. In
August 2009, Xolair received European regulatory approval to treat children age
six and older. Novartis co-promotes Xolair with Genentech in the US and shares a
portion of operating income. In 2009, Genentech's US sales were USD 571 million.

Certican (USD 118 million, +31% lc), a transplantation medicine, generated solid
growth based on its availability in more than 70 countries. In the US, the FDA
issued a Complete Response letter in December 2009 for this medicine (under the
brand name Zortress) for prevention of organ rejection in adult kidney
transplant patients. The FDA discussions focus on product labeling and Risk
Evaluation Mitigation Strategy (REMS) as well as a safety update, but no request
for more clinical studies. This medicine, which has the same active ingredient
as Afinitor (everolimus), has been shown to have good immunosuppressive efficacy
and a manageable side-effect profile.

Extavia (USD 49 million), for relapsing forms of multiple sclerosis (MS), was
launched in 2009 in the US and more than 20 other countries, marking the entry
of Novartis into the field of MS. Extavia is the Novartis-branded version of
Betaferon(®)/Betaseron(®).

Ilaris, a fully human monoclonal antibody that blocks action of the inflammatory
protein  interleukin-1 beta, has  been launched after  receiving first approvals
during  2009 in  the  US,  Europe  and  some  other  markets  for  treatment  of
cryopyrin-associated   periodic  syndrome  (CAPS),  a  group  of  rare  lifelong
auto-inflammatory  disorders. Trials are ongoing in other diseases in which IL-1
beta  is believed to  play an important  role. Other diseases include refractory
gout, chronic obstructive pulmonary disease (COPD), type 2 diabetes and systemic
juvenile idiopathic arthritis (SJIA).

R&D UPDATE

Novartis  has one of the industry's most competitive pipelines with 145 projects
in  pharmaceutical  clinical  development,  of  which  60 involve  new molecular
entities.

Pharmaceuticals

AIN457,  a fully human monoclonal antibody that blocks action of interleukin-17A
-  a major  trigger of  inflammation involved  in a  variety of diseases such as
uveitis,  psoriasis and  rheumatoid arthritis  - has  begun Phase III studies in
November 2009 for use in treating a form of uveitis, an inflammation in the eye,
with regulatory submissions possible in 2010.

Gilenia  (FTY720,  fingolimod),  a  once-daily  oral compound in development for
certain  forms of multiple sclerosis, was  submitted in December 2009 for US and
European  regulatory approvals. The clinical  program provides safety experience
in  more than 2,300 MS patients, including some  patients in their sixth year of
therapy.

QAB149 (indacaterol), a once-daily long-acting bronchodilator for adult patients
with  chronic obstructive  pulmonary disease  (COPD), gained European regulatory
approval  in November 2009 as  Onbrez Breezhaler and  was launched in Germany in
December.  Onbrez  Breezhaler  has  demonstrated  greater  improvements  in lung
function,  breathlessness and quality of life  compared to current therapies and
is  the first new inhaled compound in Europe  for treatment of COPD in more than
seven  years. In the US,  Novartis received a Complete  Response letter from the
FDA  in October  requesting additional  information on  the dosing  proposed for
QAB149.  Novartis is working with the FDA to determine what clinical trials will
be required.

Vaccines and Diagnostics

Menveo,  a novel vaccine in development to protect against the four common A, C,
W-135  and  Y  serogroups  of  meningococcal  meningitis,  is  awaiting European
regulatory  approval in early 2010 after a positive opinion in December 2009 for
initial use in adolescents (from age 11) and adults. A US regulatory decision is
also  expected  in  the  first  half  of  2010. Trials are underway in other age
groups.

MenB,  in  development  as  a  vaccine  to  protect  against  the B serogroup of
meningococcal  meningitis,  is  in  Phase  III  studies in Europe, where patient
enrollment  has been completed and a  regulatory submission remains on track for
2010. The  B serogroup is estimated to  cause about 70% of meningococcal disease
in  Europe, with infants and toddlers most  at risk. MenB has shown potential to
be  the first to protect infants as young  as six months based on Phase II trial
results.  In the US, discussions with the  FDA are planned for 2010 to determine
the scope of Phase III trials.

Disclaimer

These  materials  contain  certain  forward-looking  statements  relating to the
Group's  business, which can  be identified by  terminology such as "strategic,"
"proposes,"   "to   introduce,"  "will,"  "planned,"  "expected,"  "commitment,"
"expects,"   "set,"   "preparing,"   "plans,"   "estimates,"   "aims,"  "would,"
"potential,"  "awaiting," "estimated," "proposal," or similar expressions, or by
express  or implied discussions regarding  potential new products, potential new
indications  for existing products, or  regarding potential future revenues from
any  such products, or potential future sales  or earnings of the Novartis Group
or  any  of  its  divisions  or  business  units;  or  regarding  the  potential
acquisition  and  merger  with  Alcon;  or  by  discussions  of strategy, plans,
expectations  or  intentions.  You  should  not  place  undue  reliance on these
statements.  Such forward-looking  statements reflect  the current  views of the
Group   regarding   future   events,   and  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. There can be no guarantee that any new products will
be approved for sale in any market, or that any new indications will be approved
for  existing products  in any  market, or  that such  products will achieve any
particular  revenue levels.  Nor can  there be  any guarantee  that the Novartis
Group,  or any of its  divisions or business units,  will achieve any particular
financial  results.  Neither  can  there  be  any  guarantee  that  the proposed
acquisition  and merger  with Alcon  will be  completed in  the expected form or
within  the expected time frame  or at all. Nor  can there be any guarantee that
Novartis  will  be  able  to  realize  any of the potential synergies, strategic
benefits   or  opportunities  as  a  result  of  the  proposed  acquisition.  In
particular,  management's expectations could be affected by, among other things,
unexpected  clinical trial  results, including  additional analysis  of existing
clinical  data or unexpected new clinical data; unexpected regulatory actions or
delays  or government  regulation generally;  the Group's  ability to  obtain or
maintain   patent   or   other  proprietary  intellectual  property  protection;
uncertainties  regarding actual or potential legal proceedings, including, among
others,  product liability litigation, litigation  regarding sales and marketing
practices,   government   investigations  and  intellectual  property  disputes;
competition  in general;  government, industry,  and general  public pricing and
other  political  pressures;  uncertainties  regarding  the after-effects of the
recent  global  financial  and  economic  crisis; uncertainties regarding future
global  exchange  rates  and  uncertainties  regarding  future  demand  for 

our

products;  uncertainties  involved  in  the  development  of  new pharmaceutical
products;  the  impact  that  the  foregoing  factors  could  have on the values
attributed  to the  Group's assets  and liabilities  as recorded  in the Group's
consolidated  balance sheet; and other risks and factors referred to in Novartis
AG's  current Form 20-F on file with  the US Securities and Exchange Commission.
Should  one  or  more  of  these  risks  or uncertainties materialize, or should
underlying  assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated or expected. Novartis
is  providing the information  in these materials  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.

About Novartis
Novartis  provides  healthcare  solutions  that  address  the  evolving needs of
patients  and  societies.  Focused  solely  on  healthcare,  Novartis  offers  a
diversified   portfolio   to   best  meet  these  needs:  innovative  medicines,
cost-saving  generic pharmaceuticals, preventive  vaccines, diagnostic tools and
consumer health products. Novartis is the only company with leading positions in
these  areas. In 2009, the  Group's continuing operations  achieved net sales of
USD  44.3 billion,  while  approximately  USD  7.5 billion  was  invested in R&D
activities  throughout the Group. Headquartered  in Basel, Switzerland, Novartis
Group companies employ approximately 100,000 full-time-equivalent associates and
operate  in  more  than  140 countries  around  the world. For more information,
please visit http://www.novartis.com <http://www.novartis.com/>.

Important dates

  February 26, 2010   Annual General Meeting

  April 20, 2010      First quarter 2010 results

  July 15, 2010       Second quarter and first half 2010 results

  October 21, 2010    Third quarter and first nine months 2010 results

--------------------------------------------------------------------------------

[1] Excluding Alcon acquisition

All product names appearing in italics are trademarks owned by or licensed to Novartis Group Companies.

Please find full media release in English attached and on the following link: http://hugin.info/134323/R/1377026/338141.pdf

Further language versions are available through the following links:

German version is available through the following link: http://hugin.info/134323/R/1377020/338142.pdf

French version is available through the following link: http://hugin.info/134323/R/1377019/338140.pdf

[HUG#1377027]

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NOVARTIS AG CHF0.50(REGD)
Posfach Basel null

WKN: 904278;ISIN: CH0012005267;

    Media release (PDF): http://hugin.info/136453/R/1377027/338143.pdf