? Full year net sales up 5% (cc1
, +6% USD) driven by strong performance of growth drivers:
o Pharmaceuticals BU grew 7% (cc) driven by Cosentyx USD 2.8 billion (+36% cc) and Entresto
USD 1.0 billion (+102% cc)
o Oncology BU grew 9% (cc) driven by AAA2
(USD 0.4 billion) including Lutathera,
Promacta/Revolade USD 1.2 billion (+35% cc) and Tafinlar + Mekinist USD 1.2 billion (+31% cc)
? Full year core1
operating income grew 8% mainly driven by higher sales and gross margin expansion
? Net income was USD 12.6 billion (+64%) including a USD 5.7 billion net gain from the divestment
of OTC JV. Operating income declined 5% mainly due to M&A transactions and restructurings
? Free cash flow1 grew 12% to USD 11.7 billion driven by strong operating cash flows
? Focused the company with transformational deals during 2018:
o Consumer healthcare JV stake divested to GSK for USD 13.0 billion
o Announced proposal to spin-off Alcon Division3; on track for H1 2019
o Sandoz began transformation with reshaping the portfolio4, geographic focus and a leaner cost structure
? Built leading advanced therapy platforms:
o Gene therapy – Acquired AveXis and in-licensed Luxturna
o Radioligand therapy – Acquired AAA and Endocyte
o Cell therapy – Expanding Kymriah global manufacturing including multiple collaborations
? Four additional products reached blockbuster status in 2018; Lutathera, Aimovig and
Kymriah for DLBCL were launched; additional ten key launches on track by 2020
? Alcon sales grew 5% (cc, +6% USD) and core operating income grew 10%; expanding core margin
? Sandoz sales down -3% (cc, -2% USD) due to US price pressure; Biopharmaceuticals grew 24% (cc)
? Dividend of CHF 2.85 per share, an increase of 2%, proposed for 2018
? 2019 Group guidance5:
o New focused medicines company6 - Net sales expected to grow mid single digit (cc); core
operating income expected to grow mid to high single digit (cc)
o Current Group structure7 - Net sales expected to grow low to mid single digit (cc); core operating
income expected to grow mid single digit (cc)
Basel, January 30, 2019 — Commenting on the results, Vas Narasimhan, CEO of Novartis, said:
“In 2018 we reimagined Novartis. We took major steps towards becoming a medicines company that focuses
its capital on developing, launching, and creating global access to breakthrough medicines. Together with
delivering strong accretive growth, we also advanced our strategic priorities including building new advanced
therapy platforms, ramping up productivity and digital efforts, and creating a new culture. Looking ahead, we
expect to sustain top and bottom line growth driven by the strength of our in line brands and our exciting lineup
of 10 potential blockbuster launches by 2020.”
Key figures1 Q4 2018 Q4 2017 % change FY 2018 FY 2017 % change
USD m USD m USD cc USD m USD m USD cc
Net sales 13 269 12 915 3 6 51 900 49 109 6 5
Operating income 1 299 2 070 -37 -29 8 169 8 629 -5 -5
Net income 1 194 1 976 -40 -32 12 614 7 703 64 64
EPS (USD) 0.52 0.85 -39 -32 5.44 3.28 66 66
Free cash flow 2 939 2 456 20 11 717 10 428 12
Core Operating income 3 387 3 223 5 11 13 823 12 850 8 8
Core Net income 2 881 2 818 2 8 11 938 11 391 5 5
Core EPS (USD) 1.25 1.21 3 9 5.15 4.86 6 6

1 Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 53 of the Condensed Financial Report. Unless otherwise noted, all
growth rates in this Release refer to same period in prior year. 2 Advanced Accelerator Applications; 3 Transaction is subject to closing conditions; 4 Sandoz US dermatology and oral solids portfolio announced to
be sold to Aurobindo subject to closing considtions 5Forecast assumption that no Gilenya generics enter in 2019; however, generic competitors may still launch at risk 6 Removes Alcon and the Sandoz US dermatology and oral solids portfolio from both 2019 and 2018. 7 Assumes Alcon and the Sandoz US dermatology and oral solids portfolio remain in Novartis group for FY19

Strategy Update
Our long-term strategy is to focus Novartis as a leading medicines company with five priorities: embrace
operational excellence, deliver transformative innovation, go big on data and digital, build trust with
society, and build a new culture by unleashing the power of our people.
During 2018, we took actions that reflect this strategy and our capital allocation priorities. We concluded
the strategic review of Alcon and expect to spin-off the division in H1 2019. Alcon is positioned for
sustainable long term top line growth and margin expansion as demonstrated by the strong 2018 results.
We agreed to sell the Sandoz US oral solids and dermatology portfolio. Our planned Sandoz
transformation is expected to enable us to compete in a more challenging environment by increasing our
share of higher-margin differentiated products while driving efficiency with a geographic focus and a lean
cost structure. Additionally we sold our stake in the GSK consumer healthcare joint venture for USD 13.0
billion. This capital was re-deployed to drive long term growth through cutting edge advanced therapy
platforms, including acquiring AveXis gene therapy, AAA and Endocyte radioligand therapies and
expanding global manufacturing capacity for cell therapy Kymriah.
Operationally, four additional drugs reached USD 1.0 billion and three more potential blockbusters were
launched, Lutathera, Aimovig and Kymriah in DLBCL. Innovative Medicines margin increased by 1.0
percentage point to 32.0% of sales, and we expect this margin to expand further. Our culture is
transforming to become more open, empowered and collaborative. We advanced an enterprise-wide
digital transformation including the launch of the first digital cognitive therapy, reSET, and an artificial
intelligence program to drive salesforce effectiveness by optimizing visits to healthcare professionals.
We continue our journey to rebuild trust with society. For all our new medicines, we will systematically
integrate access strategies in our research and development efforts and we are working to develop
innovative treatments for under treated diseases. Additionally, Novartis improved to the number 2
ranking in the Access to Medicines Index for 2018.
Executive committee appointment
Susanne Schaffert was appointed CEO, Novartis Oncology and became a member of the Novartis
Executive Committee as of January 1, 2019. Susanne joined Novartis more than 20 years ago and has
spent the last six years in the Oncology business in various leadership roles, including five years as
Europe Region Head and most recently as President of AAA, our radioligand therapy business.
Fourth quarter financials
Net sales were USD 13.3 billion (+3%, +6% cc) in the fourth quarter driven by volume growth of 9
percentage points (cc), mainly from Cosentyx, Entresto, Oncology including AAA, and Alcon. Strong
volume growth was partly offset by the negative impacts of pricing (-2 percentage points) and generic
competition (-1 percentage point).
Operating income was USD 1.3 billion (-37%, -29% cc) declining mainly due to higher restructuring and
impairment charges, and the impacts from M&A transactions and growth investments, partly offset by
continued strong sales growth.
Net income was USD 1.2 billion, (-40%, -32% cc) mainly due to the lower operating income. EPS was
USD 0.52 (-39%, -32% cc) due to the lower net income.
Core operating income was USD 3.4 billion (+5%, +11% cc) mainly driven by higher Innovative
Medicines sales and improved gross margin in all divisions, partly offset by growth and launch
investments, including AveXis. Core operating income margin in constant currencies increased by 1.2
percentage points; currency had a negative impact of 0.7 percentage points, resulting in a net increase
of 0.5 percentage points to 25.5% of net sales.
Core net income was USD 2.9 billion (+2%, +8% cc) as growth in core operating income was partly offset
by the discontinuation of core income from the GSK consumer healthcare joint venture. Core EPS was
USD 1.25 (+3%, +9% cc) driven by higher core net income.
Free cash flow amounted to USD 2.9 billion (+20% USD) compared to USD 2.5 billion in prior year mainly
driven by higher cash flows from operating activities and lower investments in intangible and financial assets.

Innovative Medicines net sales were USD 9.0 billion (+5%, +9% cc) in the fourth quarter, as
Pharmaceuticals BU grew 8% (cc) driven by Cosentyx and Entresto, and Oncology BU grew 11% (cc),
driven by AAA including Lutathera, Promacta/Revolade and Tafinlar + Mekinist. Volume contributed 11
percentage points to sales growth. Pricing had a negative impact of 1 percentage point and generic
competition a negative impact of 1 percentage point.
Sandoz net sales were USD 2.5 billion (-5%, -2% cc) in the fourth quarter with 7 percentage points of
price erosion mainly in the US, partially offset by volume growth of 5 percentage points. Excluding the
US, net sales grew 3% (cc). Global sales of Biopharmaceuticals grew 29% (cc) mainly driven by Rixathon
(rituximab) and Erelzi (etanercept) in Europe, and Zarxio (filgrastim) in the US.
Alcon net sales were USD 1.8 billion (+2%, +4% cc) in the fourth quarter. Surgical growth of 6% (cc)
was driven by continued double-digit growth of advanced technology IOLs (AT-IOLs), as well as
continued growth in consumables. Vision Care sales grew 3% (cc), including continued double-digit
growth of Dailies Total1 and strong Systane performance.
Full year financials
Net sales were USD 51.9 billion (+6%, +5% cc) in 2018 driven by volume growth of 9 percentage points
(cc), mainly driven by Cosentyx, AAA and four additional products reaching blockbuster status
(Promacta/Revolade, Tafinlar + Mekinist, Entresto and Xolair). Strong volume growth was partly offset by
the negative impacts of pricing (-2 percentage points) and generic competition (-2 percentage points).
Operating income was USD 8.2 billion (-5%, -5% cc), mainly due to the impacts from M&A transactions,
higher restructuring and net impairment charges, and growth investments, partly offset by higher sales.
Core operating income was USD 13.8 billion (+8%, +8% cc) driven by higher sales and gross margin,
partly offset by growth investments, including AveXis. Core operating income margin in constant
currencies increased by 0.7 percentage points; currency had a negative impact of 0.3 percentage points,
resulting in a net increase of 0.4 percentage points to 26.6% of net sales.
Free cash flow amounted to USD 11.7 billion (+12% USD) compared to USD 10.4 billion in prior year
driven by higher cash flows from operating activities, which includes the receipt of a GSK sales milestone
from the divested Vaccines business, partly offset by higher net investments in intangible assets.
Innovative Medicines net sales were USD 34.9 billion (+8%, +8% cc) in the full year. Pharmaceuticals
BU grew 7% (cc), driven by Cosentyx reaching USD 2.8 billion and Entresto USD 1.0 billion. Oncology
BU grew 9% (cc), driven by AAA including Lutathera, both Promacta/Revolade and Tafinlar + Mekinist
reaching USD 1.2 billion and Jakavi. Volume contributed 11 percentage points to sales growth. Generic
competition had a negative impact of 2 percentage points. Pricing had a negative impact of 1 percentage
point.
Sandoz net sales were USD 9.9 billion (-2%, -3% cc) in 2018 with 8 percentage points of price erosion
mainly in the US, partially offset by volume growth of 5 percentage points. Excluding the US, net sales
grew by 4% (cc). Global sales of Biopharmaceuticals grew 24% (cc) mainly driven by Rixathon
(rituximab) and Erelzi (etanercept) in Europe, and Zarxio (filgrastim) in the US.
Alcon net sales were USD 7.1 billion (+6%, +5% cc) for the full year. Surgical sales grew 7% (cc), with
growth across all key product categories, driven mainly by AT-IOLs and consumables. Vision Care sales
grew 3% (cc), mainly driven by growth in contact lenses with continued double-digit growth of Dailies
Total1.

Key growth drivers (Q4 performance)
Underpinning our financial results in the fourth quarter is a continued focus on key growth drivers including:
? Cosentyx (USD 806 million, +33% cc) delivered strong volume growth across all indications in the
US and EU. In the US sales grew 34% (cc), while in the rest of the world sales grew 32% (cc).
? Entresto (USD 318 million, +76% cc) continued strong sales growth across all regions. New data from
the landmark PIONEER trial shows that initiating Entresto in the hospital setting is safe and provides
better outcomes than enalapril.
? Lutathera (USD 81 million) launch in the US is progressing well, with over 100 centers actively
treating. Sales from all AAA brands were USD 135 million in the quarter.
? Promacta/Revolade (USD 330 million, +32% cc) grew at a strong double-digit rate across all
regions driven by increased use in chronic immune thrombocytopenia.
? Tafinlar + Mekinist (USD 313 million, +31% cc) continued strong double-digit growth due to
increased demand in metastatic melanoma and NSCLC across all regions and strong uptake in
adjuvant melanoma from our launch in the US and Europe.
? Jakavi (USD 256 million, +17% cc) continued double-digit growth across all regions driven by the
myelofibrosis and polycythemia vera indications.
? Kisqali sales were USD 60 million (+71% cc). In the US, demand is partly driven by the label
extension based on the MONALEESA 3/7 trials, also approved in Europe in December.
? Kymriah sales were USD 28 million with the US as the main driver. Progress was made on access
in Europe with commercial orders in five countries, and Australia approved both indications in
December. EMA approved wider commercial specifications in Q4 and a corresponding FDA
submission was completed. Additionally, we are expanding global manufacturing including multiple
collaborations and doubling the capacity at Morris Plains.
? Biopharmaceuticals (biosimilars, biopharmaceutical contract manufacturing and Glatopa) grew 29%
(cc) to USD 390 million. In Europe, growth was mainly driven by Rixathon (rituximab), Erelzi (etanercept)
and the recent launch of Hyrimoz (adalimumab). Additionally Zessly (infliximab) and Ziextenzo
(pegfilgrastim) launched during the quarter. In the US growth was mainly driven by Zarxio (filgrastim).
? Emerging Growth Markets, which comprise all markets except the US, Canada, Western Europe,
Japan, Australia and New Zealand, sales declined 1% in USD and grew 7% in cc.
Net sales of the top 20 Innovative Medicines products in Q4 and FY 2018
Q4 2018 % change FY 2018 % change
USD m USD cc USD m USD cc
Gilenya 836 1 4 3 341 5 4
Cosentyx 806 31 33 2 837 37 36
Lucentis 520 7 12 2 046 8 7
Tasigna 476 -2 0 1 874 2 1
Sandostatin 399 -5 -3 1 587 -2 -2
Afinitor/Votubia 399 -2 0 1 556 2 2
Gleevec/Glivec 373 -17 -14 1 561 -20 -20
Promacta/Revolade 330 29 32 1 174 35 35
Galvus Group 327 0 6 1 284 4 6
Entresto 318 72 76 1 028 103 102
Tafinlar + Mekinist 313 27 31 1 155 32 31
Exjade/Jadenu 286 2 4 1 099 4 3
Xolair 268 9 14 1 039 13 12
Diovan Group 260 7 12 1 023 7 7
Jakavi 256 12 17 977 26 24
Exforge Group 251 1 5 1 002 4 4
Votrient 198 -7 -4 828 2 2
Ilaris 155 35 40 554 38 39
Travoprost Group 131 -13 -10 517 -12 -12
Zortress/Certican 120 3 8 464 12 12
Total Top 20 7 022 7 11 26 946 10 10

Strengthen R&D - Key developments from the fourth quarter
New approvals and regulatory update
? Promacta received FDA approval for first-line treatment of severe aplastic anemia (SAA) and
Breakthrough Therapy designation for low platelet counts in people exposed to radiation.
? Luxturna was approved in the EU. Luxturna is a one-time gene therapy to restore vision and prevent
blindness in patients with biallelic RPE65 mutations. Novartis licensed Luxturna ex-US rights from
Spark Therapeutics.
? Gilenya was approved in the EU for the treatment of MS in pediatric patients based on the results
of the PARADIGMS study.
? SEG101 (crizanlizumab) received FDA Breakthrough Therapy designation for the prevention of
vaso-occlusive crises in sickle cell disease.
? Sandoz launched reSET digital therapeutic for treatment of patients with Substance Use Disorder
(SUD) and obtained FDA clearance for reSET-O digital therapeutic for patients with Opioid Use
Disorder (OUD). Part of the partnership with Pear Therapeutics, they are the first FDA-authorized
prescription digital therapeutics for SUD and OUD.
? Sandoz biosimilar Ziextenzo (pegfilgrastim, Amgen’s Neulasta®) was approved and launched in
Europe. Ziextenzo is the eighth Sandoz biosimilar to be approved and the fifth major approval in the
last two years.
Regulatory submissions and filings
? Zolgensma1 (AVXS-101) filed in the US with priority review, in the EU under accelerated
assessment, and in Japan with Sakigake designation. Zolgensma represents the first in a proprietary
platform to treat rare, monogenic diseases using gene replacement therapy - technology that
replaces a missing or defective gene with a functional copy to correct the underlying cause of genetic
disease. US and Japan launches on track for H1 2019, EU launch on track for H2 2019.
Results from ongoing trials and other highlights
? Endocyte acquisition completed, to expand expertise in radiopharmaceuticals and build on our
commitment to transformational therapeutic platforms. Acquisition adds 177Lu-PSMA-617, a potential
first-in-class radioligand therapy in Phase III development for metastatic castration-resistant prostate
cancer (mCRPC).
? Entresto PIONEER HF trial data presented at AHA showed a 46% reduction in the serious clinical
outcomes endpoint, primarily by reducing death and heart failure re-hospitalization, compared to
enalapril over 8 weeks in pre-specified exploratory analysis.
? RTH258 (brolucizumab) two-year data presented at AAO reaffirmed positive year one findings of
non-inferiority versus aflibercept and superior reductions in retinal fluid, an important marker of
disease activity in patients with neovascular age-related macular degeneration.2
? INC280 (capmatinib) phase II GEOMETRY mono-1 trial data presented at ESMO showed overall
response rate of 72.0% and 39.1%, respectively, in treatment-naive and previously treated patients
with advanced MET exon-14 skipping mutated non-small cell lung cancer.
? BYL719 (alpelisib) phase III SOLAR-1 trial data presented at ESMO showed BYL719 plus
fulvestrant nearly doubles median Progression Free Survival in patients with PIK3CA mutated
HR+/HER2- advanced breast cancer compared to fulvestrant alone.
? Aimovig (erenumab) LIBERTY study was published in The Lancet. The full data show that more
than twice as many patients who had failed 2-4 prior preventive treatments had their migraine days
cut by 50% or more as compared to placebo, almost three times as many patients on Aimovig saw
a 75% reduction and 6% of patients on Aimovig were completely migraine free.


1 The brand name Zolgensma has been provisionally approved by the FDA for the investigational product AVXS-101 (onasemnogene abeparvovec-xxxx), but the product itself has not received marketing
authorization or BLA approval from any regulatory authorities.
2 As previously announced, Brolucizumab met its primary endpoint of non-inferiority versus aflibercept in best corrected visual acuity (BCVA) and exhibited superiority in key retinal outcomes at year one (48
weeks). Secondary endpoints at year two (96 weeks) reaffirmed superiority of brolucizumab 6 mg verses aflibercept in reduction intra-retinal fluid (IRF) and/or sub-retinal fluid (SRF) [24% for brolucizumab 6 mg
vs. 37% for aflibercept in HAWK (P=0.0001); 24% vs. 39%, respectively, in HARRIER (P<0.0001)].

Capital structure and net debt
Retaining a good balance between investment in the business, a strong capital structure and attractive
shareholder returns remains a priority.
In 2018, Novartis repurchased a total of 23.3 million shares for USD 1.9 billion on the SIX Swiss
Exchange second trading line under the CHF 10 billion share buyback authority approved at the 2016
Annual General Meeting. This included 9.3 million shares (USD 0.8 billion) under the new up-to USD 5
billion share buyback announced in June 2018 and 14.0 million shares (USD 1.1 billion) to mitigate
dilution related to participation plans of associates. In addition, 1.2 million shares (USD 0.1 billion) were
repurchased from associates. In 2018, 15.2 million treasury shares for USD 1.2 billion were delivered as
a result of options being exercised and physical share deliveries related to equity-based participation
plans. Other share sales resulted in an increase of 3.0 million shares outstanding (USD 0.3 billion).
Consequently, the total number of shares outstanding decreased by 6.3 million versus December 31,
2017. These treasury share transactions resulted in an equity decrease of USD 0.5 billion and a net cash
outflow of USD 1.3 billion.
As of December 31, 2018, the net debt decreased by USD 2.8 billion to USD 16.2 billion versus
December 31, 2017. The decrease was mainly driven by the USD 13.0 billion inflow from the sale of the
stake in the GSK consumer healthcare joint venture and the USD 11.7 billion free cash flow in 2018.
These inflows were partially offset by the USD 7.0 billion annual dividend payment, M&A transactions of
USD 13.9 billion (mainly AveXis Inc., Advanced Accelerator Applications S.A. and Endocyte Inc., all net
of cash acquired) and a net cash outflow for treasury share transactions of USD 1.3 billion. As of yearend 2018, the long-term credit rating for the company is A1 with Moody’s Investors Service and AA- with

S&P Global Ratings.
2019 Outlook
Barring unforeseen events
New focused medicines company guidance*
Excluding Alcon and the Sandoz US oral solids and dermatology business from both 2018 and 2019
? Group net sales in 2019 are expected to grow mid-single digit (cc).
? From a divisional perspective, we expect net sales performance (cc) in 2019 to be as follows:
o Innovative Medicines: grow mid single digit
o Sandoz: broadly in line with prior year
? Group core operating income in 2019 is expected to grow mid to high single digit (cc).
Current Group structure guidance*
Assuming Alcon and the Sandoz US oral solids and dermatology business remain part of Novartis for
the full year 2019
? Group net sales in 2019 are expected to grow low to mid single digit (cc).
? From a divisional perspective, we expect net sales performance (cc) in 2019 to be as follows:
o Innovative Medicines: grow mid single digit
o Sandoz: decline low single digit
o Alcon: grow low to mid single digit
? Group core operating income in 2019 is expected to grow mid single digit (cc).
o Alcon core operating income margin expected to expand in 2019
*All guidance above includes the forecast assumption that no Gilenya generics enter in 2019. However,
generic competitors may still launch at risk

see & read more on
https://www.novartis.com/sites/www.novartis.com/files/q4-2018-media-release-en.pdf

tijd 11.00
Novartis AG-REG CHF 84,50 -1,16 -1,35% vol. 1.981.989