Novartis launches Extavia®, a new therapeutic option to help patients combat devastating symptoms of multiple sclerosis

# Multiple sclerosis (MS) causes progressive disability and affects 2.5 million people worldwide including many young adults[1]

# Extavia offers patients and physicians a new branded version of standard-of-care interferon beta-1b

# Approved to treat MS patients from first signs of active disease to more advanced, relapsing forms

# Launch marks start of planned long-term partnership between Novartis and MS community

Basel, January 22, 2009 - Novartis has today announced the launch of Extavia®, a new version of the standard-of-care for relapsing forms of multiple sclerosis (MS), providing patients and physicians with an alternative option to help manage this devastating disease.

Extavia, a new branded version of interferon beta-1b, is available initially in Germany and Denmark with other European launches to follow during 2009. It is approved to treat a broad range of patients, from those with early signs of MS to those with more advanced relapsing forms of the disease.

"Extavia will provide patients and physicians with an additional option for receiving a mainstay of care in MS," said Trevor Mundel, MD, Global Head of Development at Novartis Pharma AG. "This important first step also opens the way for Novartis to build supportive partnerships with the MS community and lays the foundations for providing innovative approaches to MS care."

Extavia is the same medicinal product as Betaferon®*, an interferon beta-1b. This has a well characterised efficacy and safety profile with more than 700,000 patient-years' experience[2] and a 17-year track record of clinical use - the longest for any interferon beta in the treatment of MS[3].

MS is estimated to affect up to 2.5 million patients worldwide and is one of the leading causes of neurological disability in young adults1. The disease typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses"), followed by complete or partial restoration of function.
Data have shown that interferon beta-1b produces a 34% reduction in annualized relapse rates (p<0.001), and patients are almost twice as likely to remain relapse-free for over two years compared to those on placebo (31% vs. 16%, p=0.007)[4]. Treatment with interferon beta-1b can also slow disease progression. After two years, nearly three-quarters of patients who had experienced a single episode of neurological disease lasting at least 24 hours did not progress to clinically definite MS[5].

The launch of Extavia in Europe by the Pharmaceuticals Division of Novartis marks the beginning of a long-term commitment to meet the therapeutic needs of the MS community. This will include the establishment of a support program for Extavia users that will foster cross-communication between patients and their physicians and nurses. In turn, this will lay the foundations for future potential innovations in MS therapy. The rollout of Extavia in key EU countries is expected during the coming months.

Novartis acquired the rights to its own branded version of interferon beta-1b in an agreement with Bayer Schering, the company that markets Betaferon. In backing Extavia, Novartis brings over 50 years of neuroscience expertise and resources to the MS community. This expertise has helped to pioneer early breakthrough treatments for a number of neurological and pathological conditions, some of which remain important therapies to this day.

MS is a chronic autoimmune disease of the central nervous system that causes inflammation and neurodegeneration. Pathology is characterised by the destruction of myelin, which helps neurons carry electrical signals in the brain[6]. The disease causes problems with muscle control and strength, vision, balance, sensation and mental function[6].

The beneficial effects of interferon beta are believed to be due to its modulation of the immune system to reduce inflammatory damage. Specifically, interferon beta limits the activation of immune cells that attack myelin, suppresses the production of inflammatory cytokines - a type of protein that amplifies the inflammatory response causing damage to myelin - and stimulates the production of anti-inflammatory cytokines.

Extavia has been filed with the US Food and Drug Administration for the treatment of relapsing forms of MS to reduce the frequency of clinical exacerbations (or relapses). Patients with MS in whom efficacy has been demonstrated include those who have experienced a first clinical episode and have features consistent with MS as shown by magnetic resonance imaging (MRI)[7].

Extavia is administered by subcutaneous (or under the skin) injection. Patients will have the choice of using either a fine (30 gauge) needle for manual injection or a convenient autoinjector.

* Betaferon® is a registered trademark of Bayer Schering Pharma AG.

Disclaimer

The foregoing release contains forward-looking statements that can be identified by terminology such as "launches," "planned," "long-term," "can," "will," "likely," "commitment," "future," "potential," "expected," "estimated," "believed," or similar expressions, or by express or implied discussions regarding potential additional marketing approvals for Extavia, the roll-out of Extavia in potential additional markets, the potential development of additional MS therapies, or regarding potential future revenues from Extavia or additional MS therapies. Such forward-looking statements reflect the current views of the Company 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 will be approved for sale in any additional markets. Nor can there be any guarantee that Extavia will be launched in any additional markets. Neither can there be any guarantees that Novartis will successfully develop and bring to market any additional MS therapies. Nor can there be any guarantee that Extavia or such additional therapies will achieve any particular levels of revenue in the future. In particular, management's expectations regarding Extavia and any such additional MS therapies could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; unexpected clinical trial results, including unexpected new clinical data and unexpected additional analysis of existing clinical data; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry and general public pricing pressures, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.

About Novartis

Novartis AG 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 2007, the Group's continuing operations (excluding divestments in 2007) achieved net sales of USD 38.1 billion and net income of USD 6.5 billion. Approximately USD 6.4 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 97,000 full-time associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

References

[1] World Health Organization. Neurology atlas, 2004. Accessed 16 Jan 2009. http://www.who.int/mental_health/neurology/neurogy_atlas_review_references.pdf
[2] FDA approves Betaseron® for use after the first event suggestive of multiple sclerosis [press release]. Wayne, NJ: Berlex: 23 October 2006.
[3] Ebers G, Traboulsee A, Langdon D, Goodin D, Konieczny A. The interferon beta-1b 16-year long-term follow-up study: the results. Presented at the 16th meeting of the European Neurological Society; 27-31 May, 2006.
[4] The IFNB Multiple Sclerosis Study Group. Interferon beta-1b is effective in relapsing-remitting multiple sclerosis. Neurology. 1993;43:655-661.
[5] Kappos L, Freedman MS, Polman CH, et al. Effect of early versus delayed interferon beta-1b treatment on disability after a first clinical event suggestive of multiple sclerosis: a 3-year follow-up analysis of the BENEFIT study. Lancet. 2007;370:389-97.
[6] National Multiple Sclerosis Society website. http://www.nationalmssociety.org/about-multiple-sclerosis/symptoms/index.aspx. Accessed January 12, 2009.
[7] Extavia proposed US Prescribing Information.

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Peptimmune Grants Major Pharmaceutical Company Exclusive Option to License PI-2301 for Multiple Sclerosis

Cambridge, Mass., January 15, 2009 — Peptimmune, Inc. (“Peptimmune”), a privately held biotechnology company, announced today that it has granted Novartis (NYSE: NVS) an exclusive option to obtain exclusive worldwide rights to develop and commercialize PI-2301, Peptimmune’s multiple sclerosis drug candidate. In a separate but related agreement, the MPM Bio IV NVS Strategic Fund L.P. made an equity investment in Peptimmune.In the event that Novartis exercises the option to PI-2301, Novartis would assume the global clinical development, manufacturing, and marketing of PI-2301 and all associated costs. Peptimmune would receive payments upon the option exercise and upon successful completion of certain development, regulatory, and commercial milestones. These payments together could total more than $500 million. In addition, Peptimmune shall be eligible to receive royalties on product sales. Additional terms were not disclosed.“We believe that Novartis represents an outstanding future partner for Peptimmune and the global development of PI-2301. This option agreement provides Peptimmune with access to both Novartis’ world class development expertise and the necessary capital to invest in this proprietary product,” said Thomas P. Mathers, President and CEO of Peptimmune.Todd Foley, Managing Director at MPM Capital commented, “Peptimmune and its world-leading expertise in peptide copolymers represent an attractive investment opportunity.”

About PI-2301PI-2301 is a peptide copolymer developed using Peptimmune’s novel platform peptide chemistry. PI-2301 is designed to enhance the regulatory response of the immune system, thereby controlling the pathogenic autoimmune response in certain diseases. PI-2301 is currently in Phase 1b development by Peptimmune.

About Peptimmune

Peptimmune, Inc. is a privately held clinical stage biotechnology company focused on the development of peptide therapies to improve the management of chronic autoimmune and inflammatory disorders. The Company is in clinical development with second-generation therapeutics that are expected to result in safer and more effective products for multiple sclerosis and pemphigus vulgaris. Current investors include New Enterprise Associates, MPM Capital, Hunt Ventures, Boston Medical Investors, Silicon Valley Bank Capital, and Genzyme Corporation. For additional information, please contact us.

First Phase III results for FTY720, a novel oral therapy for MS, show superior efficacy compared to interferon beta-1a

* FTY720 significantly reduced annualized relapse rates by 52% (0.5 mg dose) and 38% (1.25 mg) vs. interferon beta-1a in one-year TRANSFORMS study[1]

* FTY720 generally well-tolerated and safety profile in line with previous experience[1]

* Regulatory submissions for FTY720 in US and EU on track for end of 2009; FREEDOMS and FREEDOMS II placebo-controlled Phase III studies continuing

* Multiple sclerosis, a devastating disease causing progressive disability, affects up to 2.5 million people worldwide including many young adults[2]

Basel, December 12, 2008 - Initial results from the one-year Phase III TRANSFORMS study show the investigational oral compound FTY720 (fingolimod) has superior efficacy to a current standard of care for patients with relapsing-remitting multiple sclerosis (MS). Patients on oral FTY720 experienced significantly fewer relapses than those treated with the injectable medicine interferon beta-1a (Avonex®*)[1].

The study, the first one-year head-to-head Phase III trial against a standard of care in MS, met its primary endpoint for both doses of FTY720.

The annualized relapse rate at one year for patients given FTY720 0.5 mg was 0.16, representing a 52% reduction compared to a relapse rate of 0.33 for interferon beta-1a (p<0.001). The FTY720 1.25 mg dose also showed a significant reduction in relapses with a rate of 0.20 representing a 38% reduction against interferon beta-1a (p<0.001). No statistically significant difference was seen between the two FTY720 doses[1].
Comprehensive analyses of the TRANSFORMS study data are ongoing, and detailed results are planned to be presented at a leading scientific congress in 2009. Regulatory submissions remain on track to be completed in the US and EU at the end of 2009.
"We are encouraged by the early results from TRANSFORMS, which represent a major step towards delivering an effective oral treatment for people with relapsing-remitting MS," said Trevor Mundel, MD, Global Head of Development at Novartis Pharma AG. "These positive results reinforce the potential for FTY720 to provide a significant advance in the future treatment of this devastating disease."

MS is a chronic autoimmune neurodegenerative disease of the central nervous system associated with irreversible progression of disability[3]. As many as 2.5 million people worldwide are affected by the condition[2] that typically begins in early adulthood between the ages of 20 and 40 years when patients are in the prime of life[4].

TRANSFORMS (TRial Assessing injectable interferoN vS FTY720 Oral in RrMS) is the first of three studies to report results in one of the largest Phase III clinical programs ever conducted in MS, involving more than 3,400 patients around the world.
As a head-to-head trial against interferon beta-1a, TRANSFORMS was designed to assess the efficacy of FTY720 compared to an established disease-modifying therapy in reducing relapse rates in patients with relapsing-remitting MS, the most common form of the disease. Two other studies - FREEDOMS and FREEDOMS II - are two-year placebo-controlled Phase III studies to assess the impact of FTY720 in reducing the frequency of relapses and slowing the progression of disability, and to further characterize the benefit-risk profile. Data from these studies to support regulatory submissions are expected in 2009.

TRANSFORMS was a one-year worldwide double-blind, double-dummy study that enrolled 1,292 patients. The study had three arms: oral FTY720 0.5 mg and 1.25 mg once-daily, and the active comparator interferon beta-1a given once-weekly by intra-muscular injection. The patient population in TRANSFORMS was consistent with the demographics and disease state seen in Phase III clinical trials for other disease-modifying treatments for relapsing-remitting MS[5].

The safety profile of FTY720 seen in TRANSFORMS was in line with previous clinical experience. The compound was generally well-tolerated with 87% of FTY720-treated patients completing the study on treatment. The proportion of patients discontinuing therapy was 10% in the FTY720 0.5 mg group, 15% in the FTY720 1.25 mg group, and 12% in the interferon beta-1a group[1].

The most commonly reported adverse events, seen in more than 10% of patients in all three study arms, were headache, nasopharyngitis and fatigue. Influenza-like symptoms were reported in 37% of patients treated with interferon beta-1a and in 4% of patients treated with FTY720[1].

Adverse effects seen in FTY720-treated patients included transient reductions in heart rate at the start of treatment, minor increases in blood pressure, and elevations in liver enzymes (also seen with interferon beta-1a). Macular edema (swelling of the center of the retina) was detected in less than 1% of FTY720-treated patients[1]. Seven cases of localized skin cancer were diagnosed in FTY720-treated patients (four basal cell carcinoma and three melanoma), while one case of squamous cell carcinoma was seen in the interferon beta-1a group. All of these localized skin lesions were successfully removed[1].

As previously reported, two fatal herpes infections occurred in patients treated with FTY720 1.25 mg. Both cases involved confounding factors impacting the outcome, but a role for FTY720 could not be excluded given its immunosuppressive effect.

In general, the safety profile of the FTY720 0.5 mg dose appeared to be better than that of the 1.25 mg dose, including lower rates of infections and bradycardia. Further analyses of the TRANSFORMS data and results from the ongoing Phase III studies will help to provide a more comprehensive assessment of FTY720's benefit-risk profile.

Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "on track," "planned," "encouraged," "potential," "to assess," "to further characterize," "expected," "appeared to be," "will," or similar expressions, or by express or implied discussions regarding potential regulatory submissions or marketing approvals for FTY720 or regarding potential future revenues from FTY720. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with FTY720 to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that FTY720 will be submitted for approval in any market by the end of 2009 or at any time. Nor can there be any guarantee that FTY720 will ever be approved for sale in any market. Neither can there be any guarantee that FTY720 will achieve any particular levels of revenue in the future. In particular, management's expectations regarding FTY720 could be affected by, among other things, unexpected clinical trial results, including unexpected new clinical data (including the upcoming results of the FREEDOMS and FREEDOMS II trials) and unexpected additional analysis of existing clinical data (including the results of the ongoing additional analyses of the TRANSFORMS clinical data); unexpected regulatory actions or delays or government regulation generally; competition in general; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; government, industry and general public pricing pressures; the impact that the foregoing factors could have on the values attributed to the Novartis 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.

About Novartis
Novartis AG 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 2007, the Group's continuing operations (excluding divestments in 2007) achieved net sales of USD 38.1 billion and net income of USD 6.5 billion. Approximately USD 6.4 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 97,000 full-time associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

References

[1.] Novartis. Data on file.
[2.] World Health Organization. Neurology atlas, 2004. http://www.who.int/mental_health/neurology/neurogy_atlas_review_references.pdf (Accessed 30 November 2008).
[3.] Confavreux C, Vukusic S. Accumulation of irreversible disability in multiple sclerosis: from epidemiology to treatment. Clin Neurol Neurosurg 2006;108:327-32.
[4.] Confavreux C, Aimard G, Devic M. Course and prognosis of multiple sclerosis assessed by the computerized data processing of 349 patients. Brain 1980;103:281-300.
[5.] Cohen J, et al. Oral fingolimod (FTY720) versus interferon beta-1a in relapsing-remitting multiple sclerosis: baseline patient demographics and disease characteristics from a Phase III trial (TRANSFORMS). Abstract at WCTRIMS, April 2008.
[*] Avonex® is a registered trademark of Biogen Idec.

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Extavia® approved in European Union for treatment of multiple sclerosis, first in planned portfolio of therapies from Novartis

Extavia is Novartis brand for interferon beta-1b - an established therapy with more than 700,000 patient-years' experience to date[1]

Launch of Extavia for early and relapsing forms of multiple sclerosis (MS) planned for US and Europe in first half of 2009
Novartis committed to MS through extensive research and development programs, including novel oral therapy FTY720 currently in Phase III trials

MS, a devastating disease causing progressive disability, affects an estimated 2.5 million people worldwide, including many young adults[2]

Basel, May 26, 2008 - The European Commission has approved Extavia® (interferon beta-1b) for the treatment of early and relapsing forms of multiple sclerosis (MS) - the first in a new portfolio of medicines from Novartis that is planned to include both established treatments and innovative therapies for patients with MS.

Extavia is the Novartis branded version of interferon beta-1b, a first-line disease-modifying therapy injected every other day for the treatment of MS. Interferon beta-1b has been available globally for more than 13 years and is supported by more than 700,000 patient-years of experience[1].

Formerly known as NVF233, Extavia is the same medicine as Betaferon®/Betaseron®, which is marketed by Bayer-Schering and was the first beta interferon treatment for MS. Novartis gained rights to its own branded version of this medicine in agreements with Bayer-Schering related to the acquisition of Chiron.

"Novartis is committed to MS and to providing effective treatments for patients with this disease," said Trevor Mundel, MD, Head of Global Development Functions at Novartis Pharma AG. "The approval of Extavia means we are able to offer the MS community a current standard of care while preparing for the introduction of innovative therapies such as FTY720."

Novartis also recently filed for approval of interferon beta-1b with the US Food and Drug Administration. Launches in the US and EU are planned for the first half of 2009, in line with an agreement with Bayer-Schering that established the opportunity for Novartis to introduce its own branded version of interferon beta-1b.

By the end of 2009, Novartis also plans to file for approval of the innovative oral therapy FTY720 (fingolimod). Results of an ongoing Phase II study extension presented in April show sustained benefits in patients with relapsing MS after three years of treatment with FTY720. Data showed that 68-73% of patients in the study remained free from relapses after three years' continuous treatment[3].

A number of other compounds for treating MS are also in early stage development by Novartis.

Multiple sclerosis is the most common disorder of the central nervous system in young adults2. It is a progressive and debilitating disorder caused by the destruction of myelin, which helps neurons carry electrical signals in the brain. MS causes problems with muscle control and strength, vision, balance, sensation and cognitive function2. MS typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses") followed by complete or partial restoration of functions[4].

In the EU, Extavia is approved for patients with relapsing-remitting MS, the most common form of the disease involving relapses followed by complete or partial restoration of function, and for a steadily worsening form of the disease known as secondary progressive MS with relapses.

In addition, Extavia is approved to treat patients with early MS who:

Have experienced a single episode involving loss of myelin (or "demyelinating event")
Have an active inflammatory process that is severe enough to need treatment with intravenous corticosteroids, if alternative diagnoses have been excluded
Are at high risk of developing clinically definite MS.

Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "plans", "will", "should" or similar expressions, or by express or implied discussions regarding potential new indications, labeling or regulatory filings or approvals for Extavia® or regarding potential future revenues from Extavia®. Such forward-looking statements reflect the current views of the management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with Extavia® to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Extavia® will be approved for any additional indications or labeling by the European Commission or that Extavia will be approved for any indications in any additional markets. There can also be no guarantee that Extavia® will achieve any particular levels of revenue in the future. In particular, management's expectations regarding Extavia® could be affected by, among other things, introduction of new MS therapies, unexpected regulatory actions or delays or government regulation generally or involving Extavia®, interferon beta-1b; unexpected clinical trial results, including unexpected new clinical data and unexpected additional analysis of existing clinical data; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry and general public pricing pressures, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.

About Novartis

Novartis AG provides healthcare solutions that address the evolving needs of patients and societies. Focused solely on growth areas in healthcare, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, and consumer health products. Novartis is the only company with leading positions in these areas. In 2007, the Group's continuing operations (excluding divestments in 2007) achieved net sales of USD 38.1 billion and net income of USD 6.5 billion. Approximately USD 6.4 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 98,000 full-time associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

References
[1] Data on file. Wayne, NJ: Bayer HealthCare Pharmaceuticals Inc; 2007.
[2] Multiple Sclerosis International Federation at www.msif.org Accessed 15 May 2008.
[3] Comi G et al. Oral FTY720 (fingolimod) in patients with relapsing multiple sclerosis. 3-year extension shows sustained low relapse rate and MRI activity. Abstract presented at 60th annual meeting of American Academy of Neurology, Chicago, 12-19 April 2008.
[4] National Multiple Sclerosis Society at www.nationalmssociety.org, Accessed 15 May 2008.
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FTY720, a novel oral therapy in development for MS, shows sustained benefits for the majority of patients after three years of treatment

Phase II study extension shows 68-73% of patients with multiple sclerosis remained relapse-free after three years of treatment with oral FTY720[1]

New data demonstrate 89% of patients free from active brain lesions - the injury caused by MS - three years after starting treatment[1]

MS, a devastating disease causing progressive disability, affects 2.5 million people worldwide including many young adults[2]
FTY720 regulatory filings planned before end of 2009 in US and EU

Basel, April 15, 2008 - The investigational oral therapy FTY720 (fingolimod) continues to demonstrate sustained benefits in patients with multiple sclerosis (MS) after three years of treatment, according to new clinical data presented today from an ongoing Phase II study extension[1].

Results showed that 73% of patients who began the study on FTY720 5 mg remained free from relapses after three years, and 68% of those who began the study on FTY720 1.25 mg remained relapse-free[1]. The figures after two years of treatment were 77% and 75% respectively[3]. On the basis of comparable efficacy and a better safety profile, all patients have been transferred to FTY720 1.25 mg in the study extension.

The 36-month data also showed an average annualized relapse rate of 0.20[1], equivalent to one relapse in five years, while 89% of patients were free of the active brain lesions characteristic of MS as measured by magnetic resonance imaging (MRI)[1] three years after starting treatment.

The results were presented at the 60th annual meeting of the American Academy of Neurology (AAN) in Chicago, USA.

"These new data demonstrate the exciting potential for FTY720 to reduce relapse rates in MS patients with a convenient once-daily pill," said Professor Giancarlo Comi, Professor of Neurology at the University Vita-Salute San Raffaele in Milan, Italy. "An effective oral treatment would be a significant breakthrough in the management of MS. That is why these results are encouraging - because we are seeing substantial benefits of FTY720 maintained over time in this clinical trial."

FTY720 is a novel, once-daily, oral treatment in worldwide Phase III clinical development for the treatment of relapsing-remitting MS, the form of the disease that affects approximately 85% of people diagnosed with MS[4].

More than 2.5 million people worldwide are affected by MS[2], the most common non-traumatic cause of neurological disability in young people[5]. Regulatory filings for FTY720 are expected in the US and EU before the end of 2009.

"The FTY720 Phase III program is the largest conducted in MS to date, and demonstrates our long-term commitment to the field of MS therapy," said Trevor Mundel, MD, Head of Global Development Functions at Novartis Pharma AG. "It is especially encouraging to see that FTY720 continues to demonstrate sustained efficacy by helping the majority of patients to remain free of relapses as the study progresses."

FTY720 has the potential to be the first in a new class of therapies for MS that act on inflammation by modulating sphingosine-1-phosphate receptors (S1P-R), reducing the number of inflammatory immune cells, called lymphocytes, from reaching the brain. In addition, FTY720 reaches the brain and S1P-Rs are present on central nervous system (CNS) tissue, so FTY720 may have a direct beneficial effect on MS within the CNS. This additional potential mechanism of action is supported by new preclinical data being presented at AAN[6],[7].

The Phase II study presented at AAN began with a six-month placebo-controlled phase in which 281 patients with relapsing MS received placebo, FTY720 1.25 mg or FTY720 5 mg once-daily. This was followed by a long-term extension in which all patients took FTY720. At the end of three years, 173 patients were in the extension, which is still ongoing. The study has been conducted in Canada and 10 European countries.

Results from the six-month placebo-controlled trial showed that FTY720 reduced relapse rates by more than 50% compared to placebo[5]. Current first-line therapies for MS reduced relapse rates by 30-35% on average in two-year studies[5].
Among patients originally on placebo who converted to active therapy in the extension, 51% were free of relapses at three years[1]. The figure at two years was 57%[3].

FTY720 has been generally well tolerated throughout the three years of the Phase II study and its extension, with the most common adverse events being nasopharyngitis, headache, fatigue and influenza[1]. Increases in alanine aminotransferase (liver enzymes) were observed in 16% of patients. Dermatological screening of patients was implemented in the extension after a small number of cases of localized skin malignancies were reported.

Novartis continues to study FTY720 in an ongoing, blinded Phase III clinical trial program. This program includes comprehensive monitoring that will further assess and characterize the safety profile of FTY720.

MS is caused by the destruction of myelin, which helps neurons carry electrical signals in the brain[8]. The disease causes problems with muscle control and strength, vision, balance, sensation and mental function[8]. MS typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses") followed by complete or partial restoration of functions.

Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "planned", "potential", "would", "encouraging", "expected", "commitment", "may", "continues", "will", or similar expressions, or by express or implied discussions regarding potential future regulatory filings or marketing approvals for FTY720 or regarding potential future revenues from FTY720. Such forward-looking statements reflect the current views of the Company regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with FTY720 to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that FTY720 will be submitted to regulatory authorities for approval, or will be approved for sale in any market. Nor can there be any guarantee that FTY720 will achieve any particular levels of revenue in the future. In particular, management's expectations regarding FTY720 could be affected by, among other things, unexpected clinical trial results, including unexpected new clinical data and unexpected additional analysis of existing clinical data; unexpected regulatory actions or delays or government regulation generally; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry and general public pricing pressures, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.

About Novartis
Novartis AG provides healthcare solutions that address the evolving needs of patients and societies. Focused solely on growth areas in healthcare, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, and consumer health products. Novartis is the only company with leading positions in these areas. In 2007, the Group's continuing operations (excluding divestments in 2007) achieved net sales of USD 38.1 billion and net income of USD 6.5 billion. Approximately USD 6.4 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 98,200 full-time associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

References
[1.] Comi G et al. Oral FTY720 (fingolimod) in patients with relapsing multiple sclerosis. 3-year extension shows sustained low relapse rate and MRI activity. Abstract presented at 60th annual meeting of American Academy of Neurology, Chicago 12-19 April 2008.
[2.] National Multiple Sclerosis Society website.
http://www.nationalmssociety.org/about-multiple-sclerosis/who-gets-ms/index.aspx Accessed March 11, 2008.
[3.] Kappos L. et al. Oral fingolimod (FTY720) in relapsing MS: 24-month results of the Phase II study. ECTRIMS 2006.
[4.] National Multiple Sclerosis Society website.
http://www.nationalmssociety.org/about-multiple-sclerosis/what-is-ms/index.aspx Accessed March 11, 2008.
[5.] Kappos L et al. Oral Fingolimod (FTY720) for Relapsing Multiple Sclerosis. N Engl J Med 2006;355, p. 1130.
[6.] Barske C et al. FTY720 (Fingolimod) and S1P-Receptor 1 and 5 specific Agonists Increase the Number of Oligodendrocytes in Vitro. Abstract presented at 60th annual meeting of American Academy of Neurology, Chicago 12-19 April 2008.
[7.] Schubart A et al. FTY720 suppresses ongoing EAE and promotes a remyelinating environment preventing axonal degeneration within the CNS. Abstract presented at 60th annual meeting of American Academy of Neurology, Chicago 12-19 April 2008.
[8.] National Multiple Sclerosis Society website.
http://www.nationalmssociety.org/about-multiple-sclerosis/symptoms/index.aspx Accessed March 11, 2008.

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EU agency backs Novartis drug Extavia for M

LONDON, March 20 (Reuters) - The European Medicines Agency has recommended approval of Novartis' (NOVN.VX: Quote, Profile, Research) Extavia intended for treatment of people with multiple sclerosis, the London-based watchdog said on Thursday.

Recommendations for marketing approval by the agency's Committee for Medicinal Products for Human Use (CHMP) are normally endorsed by the European Commission within a couple of months.

The drug is the company's branded version of Bayer AG's (BAYG.DE: Quote, Profile, Research) Betaseron, interferon beta-1b, that gives Novartis an important presence in MS treatment before the anticipated submission of its once-daily therapy FTY720 (fingolimod).

Last March Novartis and Bayer settled a dispute over Betaseron in a deal that gave Bayer full control of the product while allowing Novartis to launch a version in 2009.

Multiple sclerosis affects more than an estimated 2.5 million patients worldwide and is one of the leading causes of neurological disability in young adults. (Reporting by Michael Kahn; Editing by Rory Channing)

© Reuters 2008 All rights reserved

New Preclinical Data Suggests FTY720 May Repair or Reduce Damage Caused by Multiple Sclerosis Through a Direct Effect in the Brain

· Potential beneficial impact on central nervous system in addition to well established action on immune cells

· Recruitment complete for two of three pivotal Phase III trials; recruitment for third study is ongoing and on track

· MS most common neurological disorder in young adults, affecting more than an estimated 2.5 million people worldwide

EAST HANOVER, NJ, October 12, 2007- New preclinical data presented at European Committee for Treatment and Research of Multiple Sclerosis (ECTRIMS) in Prague suggests that FTY720 (fingolimod) directly reduces neurodegeneration and enhances repair of the central nervous system (CNS) damage caused by multiple sclerosis (MS) by interacting with sphingosine-1-phosphate receptors (S1P-R) expressed on brain cells. This mechanism of action may be in addition to the established anti-inflammatory role of FTY720 that is mediated by the reduction of inflammatory immune cells, called lymphocytes, from reaching the brain.

FTY720 is a novel, once-daily, oral treatment currently in worldwide Phase III clinical development to test its safety and efficacy as a disease modifying therapy for relapsing-remitting MS, which affects approximately 85% of people with multiple sclerosis.

The potential direct beneficial effect of FTY720 in the CNS is supported by the results of several preclinical experiments being presented at ECTRIMS, including research in animal models of MS and in vitro studies on CNS cells called oligodendrocytes.

In an animal model of MS (experimental autoimmune encephalomyelitis in rats), the administration of FTY720 directly into the CNS resulted in a statistically significant reduction in disease severity. This decrease in disease activity was seen in the absence of a reduction of lymphocytes in the bloodstream, suggesting that the favorable effect of FTY720 seen in this model is due to a direct effect in the CNS that is independent of the effects on peripheral lymphocytes.

In two experiments presented at ECTRIMS, the modulation of S1P-R by the addition of FTY720 resulted in an increase in the number, growth and survival of oligodendrocytes in cell culture. This effect of FTY720 on oligodendrocytes may help limit destruction of myelin and promote its repair and, thus, may contribute to the effectiveness of FTY720 in MS. Oligodendrocytes are cells in the CNS that make a fatty tissue, called myelin, which is necessary for normal signal transfer along nerve fibers in the CNS. Myelin and oligodendrocytes are typically damaged in MS.

"FTY720 crosses the blood-brain barrier and the drug's target - S1P receptors - are present on brain cells, including oligodendrocytes as shown in animal cell studies," said Jack Antel, Professor, Department of Neurology and Neurosurgery, McGill University, Montreal, Canada. "We are able to confirm that FTY720 directly modulates the S1P receptors on human oligodendrocyte progenitor cells."

FTY720 is currently being investigated in the largest worldwide Phase III clinical trial program to be conducted in MS to evaluate further its efficacy and safety as a disease modifying therapy for relapsing-remitting MS. This comprehensive program includes trials referred to as FREEDOMS, FREEDOMS II and TRANSFORMS. Recruitment is complete for FREEDOMS and TRANSFORMS. Recruitment is ongoing and on track for FREEDOMS II and FTY720 regulatory filing is planned for the second half of 2009. For more information about the clinical trial program, including eligibility criteria and location of U.S. study sites, patients can call the following toll-free number: 866-788-3930, or visit www.MSClinicalTrials.com.

"Novartis has a significant long-term investment and commitment to multiple sclerosis and neuroscience through its extensive research and development program," said Ludwig Hantson, PhD, Senior VP for Commercial Development & Specialty Businesses at Novartis Pharmaceuticals Corporation. "We believe oral FTY720 is an exciting and promising experimental therapy for MS as shown by the compelling Phase II data. As an oral therapy with a novel mechanism of action and promising efficacy, FTY720 has the potential to be a significant and innovative therapeutic advance."


Phase II Study Results

The six-month, placebo-controlled Phase II study conducted in 281 patients with relapsing MS in 11 countries (Europe and Canada) showed that oral FTY720, taken once-daily, reduced relapse rates by more than 50% compared to placebo and reduced MRI (magnetic resonance imaging) measures of inflammation with approximately 80% of patients free of active brain lesions.

In patients continuously treated with FTY720 for up to two years (placebo-controlled study plus the extension trial), up to 77% of patients were relapse-free and more than 80% of patients were free of active brain lesions at two years.

In the six-month placebo-controlled phase of the Phase II study, the most frequent adverse events reported for FTY720 were dose-dependent upper respiratory tract infections (mainly nasopharyngitis) and dyspnea, plus diarrhea and nausea. FTY720 treatment was associated with initial dose-dependent decreases in heart rate and expiratory air flow. Clinically asymptomatic increases in alanine aminotransferase (liver enzyme) and an increase in blood pressure were also observed. No unexpected adverse events emerged in patients treated for up to 24 months compared with the six-month placebo-controlled phase. There was no further elevation of blood pressure with continued treatment beyond the effect seen at six months.

The ongoing Phase III study program includes comprehensive monitoring, which will provide further characterization of the safety profile of FTY720.


Multiple Sclerosis

MS is the most common disorder of the CNS in young adults, affecting more than an estimated 2.5 million people worldwide. It is a progressive and debilitating disorder caused by the destruction of myelin, which helps neurons carry electrical signals in the brain. MS causes problems with muscle control and strength, vision, balance, sensation and mental function. MS typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses") followed by complete or partial restoration of functions.


Disclaimer

This release contains certain forward-looking statements relating to Novartis' business, which can be identified by the use of forward-looking terminology such as "may," "suggests," "suggesting," "potential," "promising," "planned" or similar expressions, or by express or implied statements regarding the potential approval of FTY720 by health authorities for marketing, whether or not FTY720 will be the first orally effective MS treatment, the potential health effects or long-term impact of a patient's use of FTY720, or potential future revenue from FTY720. Such forward-looking statements reflect the current views of Novartis regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with FTY720 to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that FTY720 will be approved for any indications or labeling in any market. Neither can there be any guarantee that, if approved, it will be the first orally effective MS treatment. Neither can there be any guarantee regarding the health effects or long-term impact of a patient's use of FTY720. Neither can there be any guarantees that FTY720 will reach any particular levels of revenue. In particular, management's expectations regarding FTY720 could be affected by, among other things, unexpected clinical trial results, including new clinical trial results and additional analysis of existing results; unexpected regulatory actions or delays or government regulation generally; competition in general; Novartis' ability to obtain or maintain patent or other proprietary intellectual property protection; government, industry and general public pricing pressures, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.


About Novartis

Novartis has been a leader in the neuroscience area for more than 50 years, having pioneered early breakthrough treatments for Alzheimer's disease, Parkinson's disease, Attention Deficit Hyperactivity Disorder, epilepsy, schizophrenia and migraine, many of which continue to be regarded as "gold standards" to this day. Novartis continues to be at the forefront of research and development of new compounds and is committed to addressing unmet medical needs and to supporting patients and families affected by these disorders.

Novartis Pharmaceuticals Corporation develops, manufactures markets and sells leading innovative prescription drugs used to treat a number of diseases and conditions, including those in the cardiovascular, metabolic, cancer, organ transplantation, central nervous system, dermatological, gastrointestinal and respiratory areas. The company's mission is to improve people's lives by pioneering novel healthcare solutions.

Located in East Hanover, New Jersey, Novartis Pharmaceuticals Corporation is an affiliate of Novartis AG (NYSE: NVS), a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. Novartis is the only company with leadership positions in these areas. In 2006, the Group's businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 100,000 associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com .


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Bayer completes acquisition of U.S. biologics manufacturing facility from Novartis

Berlin, September 14, 2007 — Bayer Schering Pharma AG, Germany, has completed the acquisition of a biologics manufacturing facility in Emeryville, California from Novartis. Bayer will manufacture its multiple sclerosis drug Betaseron® at the Emeryville site, retain full control of all manufacturing and process technology used in the production of Betaseron® (interferon beta-1b) and has retained the employees associated with the manufacture of the product.

As part of the transaction, which was announced in March 2007, Novartis has transferred manufacturing responsibility to Bayer Schering Pharma for Betaseron and has received a total one-time payment of approximately USD 200 million for the transfer of production equipment, inventory and the leasing of buildings at the site.

Bayer Schering Pharma will continue to pay Novartis royalties equivalent to those being paid currently on net sales of Betaseron® manufactured by Bayer at the Emeryville facilities until expiration of the original regulatory filing, development and supply agreement in October 2008. After this date, no more royalties will be due to Novartis on the sales of Betaseron®.

Bayer Schering Pharma will support Novartis in the regulatory filing process of a Novartis brand of the 250mcg version of interferon beta-1b. When approved by health authorities, Bayer Schering Pharma will supply the 250mcg version of interferon beta-1b to Novartis from 2009 forward and receive in return a double digit royalty payment from Novartis.

About Betaseron® / Betaferon®
Betaseron®, which is marketed outside the U.S. and Canada under the trademark Betaferon®, was the first disease-modifying drug introduced for MS and is a well-established treatment around the world. Betaferon® is indicated for the treatment of relapsing forms of multiple sclerosis to reduce the frequency of clinical exacerbations. Betaferon® has the broadest experience of any MS medication. In the U.S., Europe and Japan, the drug has been approved for all relapsing forms of MS. It is able to reduce the number of MS episodes by one-third, and the frequency of moderate to severe episodes by as much as 50 percent. Sixteen years’ follow up of people treated with Betaferon® has shown that it is safe and well tolerated.

Bayer HealthCare
The Bayer Group is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer HealthCare, a subsidiary of Bayer AG, is one of the world’s leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany. The company combines the global activities of the Animal Health, Consumer Care, Diabetes Care and Pharmaceuticals divisions. The pharmaceuticals business operates under the name Bayer Schering Pharma AG. Bayer HealthCare’s aim is to discover and manufacture products that will improve human and animal health worldwide. Find more information at www.bayerhealthcare.com.

Bayer Schering Pharma
Bayer Schering Pharma is a worldwide leading specialty pharmaceutical company. Its research and business activities are focused on the following areas: Diagnostic Imaging, Hematology/Cardiology, Oncology, Primary Care, Specialized Therapeutics and Women's Healthcare. With innovative products, Bayer Schering Pharma aims for leading positions in specialized markets worldwide. Using new ideas, Bayer Schering Pharma aims to make a contribution to medical progress and strives to improve the quality of life. Find more information at www.bayerscheringpharma.de.


Forward-looking statements
This news release contains forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our annual and interim reports to the Frankfurt Stock Exchange and in our reports filed with the U.S. Securities and Exchange Commission (including our Form 20-F). The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Contact
Renner, Oliver

Preclinical Studies Suggest FTY720 Mechanisms In Multiple Sclerosis May Include Direct Activity In The Brain

New preclinical data, presented at the American Academy of Neurology (AAN) annual meeting in Boston, reflect the expanding understanding of FTY720's (fingolimod) mechanism of action in multiple sclerosis (MS), suggesting direct beneficial effects in the brain. The data suggest that FTY720 may have the potential to reduce neurodegeneration and enhance repair of the central nervous system (CNS) by modulating S1P receptors expressed on brain cells. Separately, new clinical data presented from the six-month Phase II study found that the proportion of patients with clinical depression was significantly lower in the FTY720 groups compared to placebo.

These new preclinical data add to a growing body of evidence that FTY720 has multiple, specific mechanisms of action. The ongoing Phase III clinical development program includes comprehensive monitoring to further understand the clinical and safety implications of these mechanisms of action.

MS is a progressive and debilitating disorder of the CNS that frequently affects young people, women twice as often as men. It is caused by the destruction of myelin, which helps neurons carry electrical signals in the brain. MS is the most common inflammatory and neurodegenerative disorder of the CNS, causing problems with muscle control and strength, vision, balance, sensation and mental function. MS typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or "relapses") followed by complete or partial restoration of functions.

Preclinical studies

FTY720's previously known activity is based on its ability to bind to the sphingosine 1-phosphate receptor-1 (S1P-R1) on circulating lymphocytes (white blood cells). This activity reversibly traps a proportion of lymphocytes in the lymph nodes, reducing the number of inflammatory T-cells circulating in the bloodstream and in the CNS.

One of the preclinical studies presented at AAN evaluated FTY720's ability to activate S1P receptors on astrocytes in cell culture. Astrocytes are known to play an active role in nervous tissue repair, and to regulate the permeability of the blood brain barrier. The study findings indicate that FTY720 activates S1P receptors on astrocytes, stimulating intracellular pathways that regulate a variety of functions, such as cell proliferation and migration. (Muellershausen et al)

A second study, also conducted in cell culture, demonstrated that FTY720 improved the survival and increased the number of immature and mature oligodendrocytes - cells that help form myelin in the CNS. Stimulation of S1P receptors on oligodendrocytes may help limit demyelination and/or promote myelin repair. (Barske et al)

In the third study, conducted in an established animal model of MS [experimental autoimmune encephalomyelitis (EAE) in rats], researchers found that FTY720 directly administered in the rat brain significantly suppressed the severity of clinical EAE, suggesting additional mechanisms of action independent of lymphocyte depletion. In imaging studies, enhanced myelination and axonal protection associated with the clinical effects were confirmed in animals receiving oral FTY720. (Schubart et al)

Clinical results in depression (Kappos et al)

Data from the six-month placebo-controlled Phase II study of once-daily oral FTY720 in patients with MS found that the proportion of patients with clinical depression was significantly lower in the FTY720 groups at six months compared to placebo. Depression is a common co-morbid condition in people with MS; the presence of depression in MS may reduce adherence to disease-modifying therapy and lead to higher rates of treatment discontinuation.

The Phase II study included 281 patients, randomized to receive FTY720 1.25 mg, FTY720 5 mg, or placebo. Depression was evaluated in 239 patients using the Beck Depression Inventory - Second Edition (BDI-II). BDI-II scores of 14 or more suggest clinical depression. At baseline, mean BDI-II scores were 9.3 for patients randomized to receive FTY720 1.25 mg, 8.0 for patients randomized to receive FTY720 5 mg, and 9.1 for patients randomized to receive placebo. At month six, patients receiving FTY720 1.25 mg had the most improvement in depression symptoms (BDI-II = 7.9, mean change from baseline = -1.45). Patients receiving FTY720 5 mg had no change in mean BDI-II scores, and patients receiving placebo showed worsening (BDI-II=10, mean change from baseline = +0.94). The proportions of patients with BDI-II scores indicating clinical depression were significantly lower in both FTY720 groups when compared with the placebo group at month six: 33% of patients receiving placebo versus 17% of patients receiving FTY720 1.25 mg (p=0.0176) and 19% of patients receiving FTY720 5 mg (p=0.0407).

About FTY720

FTY720 is a novel oral drug that is currently in a worldwide Phase III clinical development program as a once-daily, disease modifying therapy for relapsing MS. Previously reported Phase II results showed that patients treated with FTY720 had a significant reduction in relapses and in inflammation as measured on Magnetic Resonance Imaging (MRI) compared to placebo at six months and that low disease activity was maintained over two years. Up to 77% of patients remained relapse free and more than 80% of patients were free from lesions showing active inflammation on MRI after two years of continuous FTY720 treatment. Patients who received placebo for the first six months of the study also experienced a marked improvement after switching to FTY720 in the extension, and low disease activity was sustained through month 24.

The Phase III clinical trials program includes FREEDOMS (FTY720 Research Evaluating Effects of Daily Oral therapy in Multiple Sclerosis), a 24-month, randomized, double-blind, placebo-controlled study program that plans to include over 2,000 patients worldwide with the relapsing-remitting form of MS, and TRANSFORMS (TRial Assessing injectable interferoN vS FTY720 Oral in RrMS), an international 12-month, randomized, double-blind study comparing FTY720 to Interferon-beta-1a (Avonex®, i.m. once weekly). For more information about the clinical trial program, including eligibility criteria and location of U.S. study sites, patients can call the following toll-free number: 866-788-3930, or visit www.MSClinicalTrials.com.

In the six-month placebo-controlled phase of the Phase II study, the most frequent adverse events reported for FTY720 were dose-dependent upper respiratory tract infections (mainly nasopharyngitis) and dyspnea, plus diarrhea and nausea. FTY720 treatment was associated with initial dose-dependent decreases in heart rate and expiratory air flow. Clinically asymptomatic increases in alanine aminotransferase (liver enzyme) and an increase in blood pressure were also observed. No unexpected adverse events emerged in patients treated for up to 24 months compared with the six-month placebo-controlled phase. There was no further elevation of blood pressure with continued treatment beyond the effect seen at six months. The ongoing Phase III study program includes comprehensive monitoring, which will provide further characterization of the safety profile of FTY720.

Disclaimer

This release contains certain forward-looking statements relating to Novartis' business, which can be identified by the use of forward-looking terminology such as "may," "suggest," "suggesting," "potential," "growing body of evidence," "plans to include" or similar expressions, or by express or implied statements regarding the potential approval of FTY720 by health authorities for marketing, whether or not FTY720 will be the first orally effective MS treatment, the potential health effects or long-term impact of a patient's use of FTY720, or potential future revenue from FTY720. Such forward-looking statements reflect the current views of Novartis regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with FTY720 to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that FTY720 will be approved for any indications or labeling in any market. Neither can there be any guarantee that, if approved, it will be the first orally effective MS treatment approved. Neither can there be any guarantee regarding the health effects or long-term impact of a patient's use of FTY720. Neither can there be any guarantees that FTY720 will reach any particular levels of revenue. In particular, management's expectations regarding FTY720 could be affected by, among other things, unexpected clinical trial results, including new clinical trial results and additional analysis of existing results; unexpected regulatory actions or delays or government regulation generally; competition in general; Novartis' ability to obtain or maintain patent or other proprietary intellectual property protection; government, industry and general public pricing pressures, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.

About Novartis

Novartis Pharmaceuticals Corporation develops, manufactures, markets and sells leading innovative prescription drugs used to treat a number of diseases and conditions, including those in the cardiovascular, metabolic, cancer, organ transplantation, central nervous system, dermatological, gastrointestinal and respiratory areas. The company's mission is to improve people's lives by pioneering novel healthcare solutions.

Novartis has been a leader in the neuroscience area for more than 50 years, having pioneered early breakthrough treatments for Alzheimer's disease, Parkinson's disease, Attention Deficit Hyperactivity Disorder, epilepsy, schizophrenia and migraine, many of which continue to be regarded as "gold standards" to this day. Novartis Neuroscience continues to be at the forefront of research and development of new compounds, is committed to addressing unmet medical needs and to supporting patients and families affected by these disorders.

Located in East Hanover, New Jersey, Novartis Pharmaceuticals Corporation is an affiliate of Novartis AG (NYSE: NVS), a world leader in offering medicines to protect health, treat disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis is the only company with leadership positions in both patented and generic pharmaceuticals. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. In 2006, the Group's businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 101,000 associates and operate in over 140 countries around the world.

New Oral Agents for Multiple Sclerosis, Including Novartis/Mitsubishi Pharma's Novel Drug, Will Capture 25% of Market Share by 2020

Concerns Over Safety and Efficacy Will Prevent Emergence of a Blockbuster Drug Through 2020, According to a New Report from Decision Resources

WALTHAM, Mass., March 28 /PRNewswire/ -- Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, finds that emerging oral therapies for multiple sclerosis, including a new drug from Novartis/Mitsubishi Pharma, will capture 25% of the market share by 2020 in the United States, Japan, France, Germany, Italy, Spain, and the United Kingdom.

The new Pharmacor report Multiple Sclerosis 2005-2020: Will Emerging Oral Agents Unseat Current Therapies? finds that Novartis/Mitsubishi Pharma's new agent, currently known as fingolimod (also called FTY-720) will outperform other emerging therapies because of its oral formulation, superior efficacy, and acceptable safety profile, although experts temper
their excitement with caution because the drug's side-effect profile has not yet fully emerged.

Physicians' and experts' wariness concerning drug safety was prompted by the development of serious infections (three of which proved fatal) in five patients who received Biogen Idec/Elan's Tysabri, which launched in the U.S. market in 2004. For safety concerns, Tysabri was pulled from shelves in 2005 -- following a safety review, the drug was re-approved by the Food and Drug Administration in 2006.

"The history of serious side effects associated with Tysabri has not only impaired its once-promising market potential but also negatively influenced physician opinion of emerging therapies," said Decision Resources Analyst Bethany Kiernan, Ph.D. "As a result of overarching concerns over safety and efficacy, we forecast that no emerging therapies will obtain blockbuster status through 2020."

About Pharmacor from Decision Resources
Pharmacor is a unique family of studies that assesses a host of market-impacting factors and analyzes the commercial outlook for drugs in research and development.

About Decision Resources
Decision Resources (http://www.decisionresources.com) is a world leader in market research publications, advisory services, and consulting designed to help clients shape strategy, allocate resources, and master their chosen markets.

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:
Elizabeth Marshall
Decision Resources, Inc.
781-296-2563
emarshall@dresources.com


SOURCE Decision Resources, Inc.

Novartis to launch its own branded version of a leading multiple sclerosis therapy through agreement with Bayer Schering Pharma

A Novartis-branded version of interferon beta-1b to be launched in first half 2009

Move strengthens Novartis multiple sclerosis (MS) portfolio ahead of on-track submission in 2009 of once-daily oral therapy FTY720, currently in Phase III trials.

Novartis will transfer manufacturing responsibility for Bayer Schering Pharma's interferon beta-1b (marketed as Betaseron®[1]) to Bayer Schering Pharma.

Bayer Schering Pharma to pay approximately USD 200 million for transfer of production equipment, inventory and leasing of buildings at California site.

Novartis to continue receiving royalties from global sales of Bayer Schering Pharma's Betaseron until October 2008.

Basel, March 26, 2007 - Novartis has signed an agreement with Bayer Schering Pharma AG that will provide Novartis the opportunity to introduce in the first half of 2009 its own branded version of interferon beta-1b for patients with the debilitating neurological disease multiple sclerosis (MS).

The planned launch of a Novartis-branded version, which requires approval from regulatory authorities, will give Novartis an increasing presence in helping patients with MS ahead of the anticipated submission in 2009 of its oral once-daily therapy FTY720 (fingolimod), which is currently in Phase III trials.

Bayer Schering Pharma will support Novartis in the regulatory filing process of a Novartis-branded version of interferon beta-1b. They will also assume manufacturing responsibility for its interferon beta 1b from Novartis and supply Novartis with this product for its own branded version in return for a double-digit royalty payment. Novartis has the right to further develop new formulations and presentations of its branded version of this medicine.

"This agreement gives us an opportunity to strengthen our Neuroscience portfolio and build our presence in multiple sclerosis while preparing for the submission of FTY720 as planned for 2009," said Thomas Ebeling, CEO of Novartis Pharma AG. "As a truly new treatment approach with once-daily oral dosing, we believe FTY720 can offer significant therapeutic benefits to MS patients."

Under the terms of the agreement, Novartis will transfer manufacturing responsibility for interferon beta-1b to Bayer Schering Pharma, which will purchase the related equipment and lease certain buildings at a Novartis site in Emeryville, California, for a one-time cash payment of approximately USD 110 million. Bayer Schering Pharma will also purchase related interferon beta-1b product inventory for an estimated USD 90 million cash, which is subject to adjustment at closing.

Bayer Schering Pharma will continue to pay Novartis royalties on worldwide net sales of Betaseron® until October 2008 when the original regulatory filing, development and supply agreement expires.

Novartis plans to maintain in Emeryville the operations of its Vaccines and Diagnostics division, including the headquarters for its diagnostics business, as well as pharmaceutical research conducted by the Novartis Institutes for Biomedical Research (NIBR).

This agreement with Bayer Schering Pharma is subject to regulatory approvals, including antitrust review, and is expected to be completed by the third quarter of 2007.

Multiple sclerosis is estimated to affect more than 2.5 million patients worldwide and is one of the leading causes of neurological disability in young adults. This disease typically presents in relapsing forms involving acute self-limiting attacks of neurological dysfunction (or relapses), followed by complete or partial restoration of function.[2]

Betaseron is marketed by Bayer Schering Pharma AG, which Bayer AG acquired in 2006. In 1993 Bayer Schering Pharma signed an agreement covering the regulatory filing, development and supply of Betaseron with Chiron, which Novartis acquired in 2006. Novartis assumed Chiron's rights to this product, and since then has continued to produce Betaseron.

Disclaimer
This release contains certain forward-looking statements relating to the business of Novartis, which can be identified by the use of forward-looking terminology such as "to launch", "to be launched", "on track", "will", "to pay", "to continue", "to introduce", "planned", "anticipated", "to further develop", "believe", "plans", "expected", or similar expressions, or by express or implied discussions regarding the potential regulatory approval and completion of the announced agreement with Bayer Schering, or regarding potential future regulatory submissions or approvals or regarding potential future revenues from interferon beta-1b, new formulations or presentations of interferon beta-1b, or FTY720. Such forward-looking statements reflect the current views of Novartis regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with interferon beta-1b or FTY720 to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that the announced deal will receive the necessary regulatory approvals, or if approved, will be completed, or that interferon beta-1b, new formulations or presentations of interferon beta-1b, or FTY720 will be submitted for approval or will be approved for sale for any indications or labeling in any market. Nor can there be any guarantee that interferon beta-1b, new formulations or presentations of interferon beta-1b, or FTY720 will achieve any sales or any particular level of sales. In particular, management's expectations could be affected by, among other things, unexpected clinical trial results, including additional analysis of existing clinical data or new clinical data; unexpected regulatory actions or delays or government regulation generally; competition in general; government, industry and general public pricing pressures; Novartis' ability to obtain or maintain patent or other proprietary intellectual property protection, 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 anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.


About Novartis
Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. Novartis is the only company with leadership positions in these areas. In 2006, the Group's businesses achieved net sales of
USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 101,000 associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

References
[1] Marketed as Betaferon® in Europe
[2] Multiple Sclerosis International Federation http://www.msif.org/en/ms_the_disease/index.html

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