Novartis R&D and Investor Update

Home , Crizanlizumab, Hydroxycarbamide, Ligelizumab

Novartis AG Investor Relations

Novartis R&D and investor update November 5, 2018 Disclaimer

This presentation contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as “potential,” “expected,” “will,” “planned,” “pipeline,” “outlook,” “agreement to acquire,” or similar expressions, or by express or implied discussions regarding potential marketing approvals, new indications or labeling for the investigational or approved products described in this presentation, or regarding potential future revenues from such products, or regarding the proposed acquisition of Endocyte, Inc. (Endocyte) by Novartis including the potential outcome and expected timing for completion of the proposed acquisition, and the potential impact on Novartis of the proposed acquisition, including express or implied discussions regarding potential future sales or earnings of Novartis, and any potential strategic benefits, synergies or opportunities expected as a result of the proposed acquisition. You should not place undue reliance on these statements. Such forward-looking statements are based on our current beliefs and expectations regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that the investigational or approved products described in this presentation will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Nor can there be any guarantee that such products will be commercially successful in the future. Neither can there be any guarantee that the acquisition described in this presentation will be completed, or that it will be completed as currently proposed, or at any particular time. There can be no guarantee that Novartis or any potential products that would be obtained with Endocyte will achieve any particular future financial results, or that Novartis will be able to realize any potential strategic benefits or opportunities as a result of the proposed acquisition. In particular, our expectations regarding such products matters could be affected by, among other things, the uncertainties inherent in research and development, including clinical trial results and additional analysis of existing clinical data; regulatory actions or delays or government regulation generally, including potential regulatory actions or delays with respect to the development of the products described in this presentation, as well as potential regulatory actions or delays relating to the completion of the potential acquisition described in this presentation; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures; our ability to obtain or maintain proprietary intellectual property protection; the particular prescribing preferences of physicians and patients; general political and economic conditions; safety, quality or manufacturing issues; the ability to obtain Endocyte stockholder approval and the satisfaction of the other conditions to the consummation of the proposed acquisition; the potential that the strategic benefits or opportunities expected to result from the proposed acquisition may not be realized or may take longer to realize than expected; the potential that the integration of Endocyte into Novartis subsequent to the closing of the proposed acquisition may not be successful, or may take longer to succeed than expected; potential adverse reactions to the proposed acquisition by customers, suppliers or strategic partners; dependence on key Endocyte personnel, customers and suppliers; uncertainties regarding actual or potential legal proceedings, including, among others, potential legal proceedings with respect to the proposed acquisition; potential or actual data security and data privacy breaches, or disruptions of our information technology systems, and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward- looking statements as a result of new information, future events or otherwise. Additional Information and Where to Find It This presentation may be deemed to be solicitation material in respect of the proposed acquisition of Endocyte by Novartis AG. In connection with the proposed acquisition, Endocyte filed a preliminary proxy statement with the SEC on October 31, 2018, and intends to file other relevant materials with the SEC, including Endocyte’s proxy statement in definitive form. Stockholders of Endocyte are urged to read these materials (including any amendments or supplements thereto) and all other relevant documents filed with the SEC when such documents become available, including Endocyte’s definitive proxy statement, because they will contain important information about the proposed acquisition. Investors and security holders are able to obtain the documents (once available) free of charge at the SEC’s web site, http://www.sec.gov, or from Endocyte by going to its investor relations web site at http://investor.endocyte.com/investor-relations. Participants in Solicitation Novartis AG and its directors and executive officers, and Endocyte and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Endocyte shares of common stock in respect of the proposed acquisition. Information about the directors and executive officers of Novartis AG is set forth in the excerpts of Novartis AG’s Annual Report for 2017, which was furnished to the SEC on Form 6-K on January 24, 2018 and incorporated by reference into Novartis AG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2017. Information about the directors and executive officers of Endocyte is set forth in the proxy statement for Endocyte’s 2018 Annual Meeting of Stockholders, which was filed with the SEC on March 23, 2018. Information regarding interests of Endocyte’s participants in the solicitation is set forth in Endocyte’s preliminary proxy statement relating to the proposed acquisition, and will be set forth in other materials to be filed with the SEC relating to the proposed acquisition, including Endocyte’s definitive proxy statement.

1 | Novartis R&D and investor update | November 5, 2018 Agenda

Timing Q&A Session Presenters 12:00 – 13:00 Registration / light lunch 13:00 Opening Samir Shah 13:00 – 13:20 5 min Pipeline, platforms John Tsai 13:20 – 14:20 30 min AveXis Dave Lennon, Brian Kaspar AVXS-101 14:20 – 15:15 30 min Oncology Liz Barrett, Samit Hirawat Radioligand therapies, ACZ885 in NSCLC, SEG101, BYL719 15:15 – 15:45 Break 15:45 – 16:45 30 min Upcoming launches (late-stage pipeline) John Tsai, Danny Bar Zohar, Paul Hudson QAW039, RTH258, BAF312, OMB157 16:45 – 17:15 10 min Near term value drivers Paul Hudson, John Tsai Cosentyx®, Entresto®, Gilenya® 17:15 – 17:30 15 min Q&A session Vas Narasimhan, Harry Kirsch, John Tsai, Paul Hudson, Liz Barrett 17:30 Cocktail All

2 | Novartis R&D and investor update | November 5, 2018 Highlights for today

. Leading pipeline with 26 potential blockbusters1 . 60 major2 submissions planned 2019-2021 . Progressing advanced therapy platforms with 13 projects in development . Deep Ph2 pipeline with emerging assets, including liver and kidney . Maximizing our in-line brands with continuous new data flow . Using data and digital technologies to strengthen the way we work

1. Individual assets with expected peak sales >USD 1bn across all indications 2. Submissions in US/EU/JP 2019-21

3 | Novartis R&D and investor update | November 5, 2018 Advancing a highly productive and valuable pipeline

Scale Value Projects in clinical 26 Potential blockbusters1 in 200+ development confirmatory development

>500 Ongoing clinical trials2 13 Advanced platform therapies in clinical development; 9 expected to Major submissions enter the clinic in 2019 60 planned 2019-20213

Confirmatory development – clinical development post-proof of concept 1. Individual assets with expected peak sales >$1bn across all indications. 2. Across NIBR and GDD 3. Submissions in US/EU/JP 2019-21

4 | Novartis R&D and investor update | November 5, 2018 Industry-leading on multiple metrics

#1 in value creation from advanced therapies

~USD 23bn Highest pipeline value by sales 2018-24

~USD 95bn Value creation 2018-24 from recently launched1 and pipeline products

Source: Evaluate Pharma 2018, Outlook to 2024 1. Launched post-2015

5 | Novartis R&D and investor update | November 5, 2018 Driving productivity using data and digital technologies

Data42 NerveLive Stride

data42 nucleus

Transforming our operations through technology

6 | Novartis R&D and investor update | November 5, 2018 Establishing a suite of innovative and advanced therapy platforms Subject of separate sessions today

Cell-based therapy CRISPR Gene therapy Covalent Binders

Cancer cell

T-cell

mRNA Novel IO Rx Delivery Targeted Protein Radioligand therapy Degradation

All trademarks are the property of their respective owners

7 | Novartis R&D and investor update | November 5, 2018 Progressing gene, cell, and radioligand platforms with 131 therapies in development

Gene therapy Cell therapy Radioligand therapy

1. Gene therapy: 3 (AVXS-101, CGF166, CPK850) Cell therapy: 6 (DLBCL 1st relapse, follicular lymphoma, DLBCL pembro combo, adult ALL, CLL, rr MM) Radioligand: 4 (3 for prostate and one other) 2. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company.

8 | Novartis R&D and investor update | November 5, 2018 Building TA depth in Innovative Medicines

Oncology Specialty Medicines Biopharma

Oncology Cardio-Metabolic IHD Neuroscience Ophthalmology Respiratory Biopharma

Kymriah® Entresto® Cosentyx® Aimovig® Brolucizumab Fevipiprant Adalimumab New indications HFpEF LCM Migraine (RTH258) (QAW039) Infliximab Ligelizumab MayzentTM nAMD, DME Asthma Alpelisib LHW090 Pegfilgrastim (BYL719) Hypertension (QGE031) (BAF312) Luxturna® QVM149 CSU/CIU SPMS Breast LNP023 Inherited retinal Asthma ZPL389 Ofatumumab Crizanlizumab Renal Diseases dystrophies CSJ117 AD (OMB157) (SEG101) UNR844 Asthma LOU064 MS Sickle Cell Presbyopia CSU AVXS-101 ® ECF843 Lutathera Tropifexor SMA Dry eye NeET (LJN452) LMI070 ACZ885, NASH SMA INC280 CFZ533 EMA401 Lung Transplant Neuropathic Pain

Aimovig® is developed in collaboration with Amgen; Luxturna marketed ex-US

9 | Novartis R&D and investor update | November 5, 2018 60 major1 submissions expected 2019-2021. 26 potential blockbusters2 in pipeline

Subject of separate Potential blockbusters sessions today

Cosentyx® nrAxSpA

Entresto® HFpEF

INC280 NSCLC

OMB157 CFZ533 HDM201 UNR844 Relapsing multiple Acute myeloid Multiple Presbyopia sclerosis leukemia LHW090 AVXS-101 combo ABL001 CNP520 VAY736 PDR001 Resistant SMA CML Alzheimer’s disease Multiple Metastatic melanoma hypertension

BAF312 QVM149 ACZ885 CSJ117 LJN452 VPM087 Non-alcoholic SPMS Asthma Lung cancer Severe Asthma CRC / RCC steatohepatitis2

RTH258 SEG101 QAW039 QGE031 ECF843 LOU064 ZPL389 Chronic spontaneous nAMD Sickle cell disease Asthma CSU/CIU Dry eye Atopic dermatitis urticaria 2018 2019 2020 2021  20223

1. Submissions in US, Europe and Japan 2. Individual assets with expected peak sales >USD 1bn 2. Including other potential indications 3. Assets in confirmatory development Endocyte assets not included

10 | Novartis R&D and investor update | November 5, 2018 High, unmet medical need for effective treatment in NASH

153 million adults in the US suffer from nonalcoholic fatty liver disease (NAFLD) 25% of these people (38 million) will develop nonalcoholic steatohepatitis (NASH) NASH is expected to be the leading cause of liver transplant in the US by 20203

NVS portfolio

HCC, Normal Liver Steatosis Steatohepatitis Cirrhosis need for Transplant or Death

Fat infiltration >5% with or Steatosis + Increasing fibrosis, HCC – formation of without mild inflammation Necroinflammation leading to cirrhosis malignant tumors

Note: Adults >18 years. Source: US Census Bureau Data. 1.US: Younossi, 2016 (meta-analysis), France: Proxy from Spain & Italy, Germany: Volzke, 2005 & Ludwig, 2015, Italy: Bedogni, 2005, Spain: Calleberia, 2010, UK: Proxy from Spain & Italy, Germany: Nishioji, 2014, Hamaguchi, 2012 & Jimba, 2005. 2. Williams, 2011 Gastroenterology 140, no. 1 (2011): 124-31. doi:10.1053/j.gastro.2010.09.038. 3. Incident Population. Source: Zaman et al. (2008)

11 | Novartis R&D and investor update | November 5, 2018 Aiming to deliver best-in-class single and combination therapies for NASH patients

Working to build the broadest portfolio of combination products for NASH, to deliver benefits for patients

Tropifexor (LJN452) + Licogliflozin (LIK066) EARLY DEVELOPMENT

Tropifexor (LJN452) + Cenicriviroc (CVC) PHASE 2B Tropifexor (LJN452) + Emricasan (VAY785) EARLY DEVELOPMENT

Tropifexor (LJN452) + ACC inhibitor Tropifexor (LJN452) + DGAT2 Inhibitor Tropifexor (LJN452) + KHK Inhibitor EARLY DEVELOPMENT

Tropifexor (LJN452) has the potential to be a backbone mechanism of action for combination therapies1

1. Clinical trials of tropifexor in combination with Allergan and Pfizer compounds in accordance with collaboration agreements with those companies. Clinical trials of tropifexor in combination with VAY785 conducted in accordance with collaboration and license agreement with Conatus Pharmaceuticals Inc. All trademarks are the property of their respective owners.

12 | Novartis R&D and investor update | November 5, 2018 Renal a potential strategic pillar for the cardio-metabolic portfolio

High Unmet Need Strong Strategic Fit Leading Renal Pipeline

• Major cause of death and risk factor for • Large renal market with significant • LNP023, oral alternative complement CV diseases1 growth potential (~USD 22bn in US in pathway inhibitor for rare renal 20262) diseases including IgA and • High cost burden (US annual cost of Membranous Nephropathies, and C3 dialysis: USD 42bn) • Significant synergies between Glomerulopathy cardiovascular and renal diseases • No approved disease modifying • Nine projects specialty renal indications treatment options in many conditions • Potential for accelerated development in pre-clinical development pathways (e.g., surrogate marker)

1Kidney International, Vol. 66 (2004), pp. 1310–1314; 2Evaluate Pharma 13 | Novartis R&D and investor update | November 5, 2018 Maximizing in-line brands with major regulatory and clinical milestone in 2018

Aimovig® US / EU approvals for migraine prevention

Cosentyx® Ankylosing spondylitis submission in Japan

HFrEF: PIONEER-HF data to be presented at AHA Entresto® HFrEF: TRANSITION demonstrated initiation of Entresto® shortly after stabilization of ADHF well tolerated HFpEF: PARAGON following interim analysis, study continue as planned with top-line results expected mid-2019

Gilenya® Superiority vs. Copaxone® (ASSESS study); US approval & CHMP positive opinion in pediatric indication

Kisqali® MONALEESA 3 and 7 data added to US label

Kymriah® DLBCL US/EU and pALL EU approval

Lucentis® EU submission for retinopathy of prematurity

Lutathera® US approval for NET Tafinlar® + US/EU/JP approval for adjuvant melanoma Mekinist® Biosimilars EU approvals for adalimumab and infliximab, CHMP positive opinion for pegfilgrastim; US CRL for rituximab

Aimovig® is developed in collaboration with Amgen Copaxone® is a registered trademark of Teva Pharmaceuticals LTD 14 | Novartis R&D and investor update | November 5, 2018 Strong commitment to integrating global health needs and access principles in R&D

Novartis Institute for Sickle Cell Disease Commitment to Malaria Access Principles in R&D1 Tropical Diseases Initiative

. Two NMEs (KAE609 and . Five-year USD 100m . Established new initiative . Commitment to identify KAF156) in development for investment targeting malaria in targeting sickle cell disease opportunities within portfolio malaria with potential to collaboration with external (SCD) in Africa that better serve patients in address emerging resistance partners, such as the low and low-middle income . Partnered with selected Medicines for Malaria Venture countries . Discovery efforts targeting governments malaria, other parasitic and . Commitment to incorporate . Building on Novartis/Sandoz diarrheal diseases considerations for LIC/LMIC2 portfolio in SCD and in all development programs strengthening disease education

1. Access Principles apply to how we research, develop and commercialize globally (though the focus of this slide is specifically R&D) 2. Low Income Countries / Low and Medium Income Countries

15 | Novartis R&D and investor day | November 5, 2018 Conclusion

Continuing our heritage of delivering breakthrough innovation

Building a portfolio of advanced therapy platforms

Advancing a pipeline of medicines addressing a high burden of disease

Maximizing our in-line brands

Driving R&D productivity to maximize pipeline potential

16 | Novartis R&D and investor update | November 5, 2018 Appendix Complement-mediated renal diseases are rare and affect young patients with often devastating outcomes

IgA Nephropathy • ~125k patients in US; higher incidence in Asia Pacific; commonly diagnosed aged 20-40 • Clinical features include proteinuria, gross hematuria, fatigue and pain • ~30% of patients with 1-2 g/day proteinuria progress to ESRD within 10 years • No disease specific treatment options

Membranous Nephropathy • ~84k patients in US; commonly diagnosed aged 40-60 • Most common cause of nephrotic syndrome in adults; edema common clinical feature • ~30% of patients progressing to ESRD within 10 years • No approved disease modifying therapies

C3 Glomerulopathy • ~4k patients in US; commonly diagnosed in adolescents and young adults • Clinical features include proteinuria, hematuria, nephrotic syndrome, fatigue • ~50% of patients progressing to ESRD within 10 years; high rate of recurrence post-transplant • No disease specific treatment options

18 | Novartis R&D and investor update | November 5, 2018 Planned filings 2018 to  2022

2018 2019 2020 2021  2022 BYL719a + fulv INC280 AVXS-101 ABL001 AVXS-201 LJC242 ACZ885 HR+, HER2 (-) postmenopausal NSCLC6 SMA Type 2/325 CML4 3rd line Rett Syndrome Non-alcoholic steatohepatitis Adjuvant NSCLC adv. BC9 2nd line LCI699 PDR001 + Tafinlar®+Mekinist® QAW039 QGE031 BYM338 LJN452 BYM338 Cushing’s disease Metastatic BRAF V600+ melanoma Asthma CSU/CIU16 Hip fracture recovery Non-alcoholic steatohepatitis Sarcopenia RTH258 SEG101 Entresto® ACZ885 CAD106 LMI070 CFZ533 nAMD7 Sickle cell disease Post-acute myocardial infarction 1st Line NSCLC Alzheimer’s disease Spinal muscular atrophy Sjorgen’s Syndrome LAM320 Cosentyx® Cosentyx® ACZ885 CFZ533 LOU064 Cosentyx® MDR8 tuberculosis nrAxSpA12 PsA H2H17 2nd Line NSCLC Solid Organ Transplant Chronic spontaneous urticaria AS H2H19 Lucentis® Entresto® Jakavi® Kymriah ® CNP520 MTV273 Kymriah ROP10 Heart failure (PEF)13 Chronic GVHD14 CLL22 Alzheimer’s disease Multiple myeloma + pembrolizumab - r/r DLBCL Lucentis® OMB157 Jakavi® Kymriah ® CSJ117 QBW251 INC280 Diabetic retinopathy Relapsing multiple sclerosis Acute GVHD14 r/r DLBCL in 1st relapse Severe Asthma COPD21 NSCLC6 (EGFRm) QMF149 RTH258 Kymriah® ECF843d UNR844 Kisqali ® Asthma Diabetic macular edema r/r Follicular Lymphoma Dry eye Presbyopia HR+, HER2 (-) BC9 (adjuvant) QVM149 Xolair EMA401 VAY736 PDR001 combo Asthma Nasal Polyps Peripheral neuropathic pain Autoimmune Hepatitis Metastatic Melanoma LA-EP2006 (pegfilgrastim, US) HDM201 VAY785e Rydapt® Chemotherapy-induced neutropenia 20 and others (same as originator) Acute myeloid leukemia Non-alcoholic steatohepatitis AML (FLT3 wild type) KAE609 VPM087 RTH258 Malaria CRC 1L/RCC 1L24 Retinal vein occlusion KAF156 ZPL389 VAY736 Malaria Atopic dermatitis Primary Sjoegren’s syndrome 13. Preserved ejection fraction 1. Secondary prevention of cardiovascular events 14. Graft-versus-host disease LHW090 ABL001 2. Diffuse large B-cell lymphoma 15. Neuroendocrine tumors Resistant hypertension CML4 1st line 3. Severe aplastic anemia 16. Chronic spontaneous urticaria / chronic idiopathic urticaria 4. Chronic myeloid leukemia 17. Psoriatic arthritis head-to-head study versus adalimumab Combination abbreviations: 5. Long-acting release 18. Non-alcoholic steatohepatitis fulv fulvestrant New molecule 6. Non-small cell lung cancer 19. Ankylosing spondylitis head-to-head study versus adalimumab tmx tamoxifen New indication 7. Neovascular age-related macular degeneration 20. Acute myeloid leukemia gsn goserelin 8. Multi-drug resistant 21. Chronic Obstructive Pulmonary Disease NSAI Non-steroidal aromatase inhibitor New formulation 9. Breast cancer 22. Secondary Progressive Multiple Sclerosis Taf Tafinlar® (dabrafenib) 10. Retinopathy of prematurity 23. IV formulation Spinal Muscular Atrophy Type 1 Mek Mekinist® (trametinib) Biosimilars a) US filing, submitted in EU 11. Indolent Non-Hodgkin’s lymphoma 24. 1st line colorectal cancer / 1st line renal cell carcinoma awaiting HA acceptance 12. Non-radiographic axial spondyloarthritis 25. IT formulation Spinal Muscular Atrophy Type 2/3

19 | Novartis R&D and investor update | November 5, 2018 Pipeline of key projects in confirmatory development

Early Clinical Trials Registration Trials – Ph3 / Pivotal In Registration AVXS-201 KAF156 VAY785b ABL001 ACZ885 LAM320 AVXS-101 Rett Syndrome Malaria Non-alcoholic steatohepatitis CML1 3rd line 2nd Line NSCLC2 MDR15 tuberculosis SMA Type 123 BYM338 LHW090 VPM087 AVXS-101 Cosentyx® Lucentis® BAF312 Hip fracture recovery Resistant hypertension CRC 1L/RCC 1L24 SMA Type 2/325 nrAxSpA9 Diabetic retinopathy SPMS20 CAD106 LMI070 ZPL389 BYL719 + fulv Cosentyx® Lucentis® LTW888db HR+, HER2 (-) postmenopausal 16 Alzheimer’s disease Spinal muscular atrophy Atopic dermatitis adv. BC5 2nd line PsA H2H10 ROP Retinopathy CFZ533 LJC242 ABL001 INC280 Cosentyx® OMB157 ACZ885 Solid Organ Transplant Non-alcoholic steatohepatitis CML1 1st line NSCLC2 AS H2H11 Relapsing multiple sclerosis Sec. prev. CV events1 ®b LJN452 Kisqali + fulv CNP520 BYM338 LCI699 Kymriah ® QMF149 HR+, HER2(-) postmenopausal Alzheimer’s disease Non-alcoholic steatohepatitis Sarcopenia Cushing’s disease r/r Follicular Lymphoma Asthma adv. or metastatic BC5 1st/2nd line

CSJ117 LOU064 Kymriah ® PDR001 + Tafinlar®+Mekinist® Kymriah ® QVM149 Kisqali®b + tmx + gsn/or NSAI + gsn Severe Asthma Chronic spontaneous urticaria + pembrolizumab - r/r DLBCL Metastatic BRAF V600+ melanoma r/r DLBCL in 1st relapse Asthma HR+, HER2(-) premenopausal adv. or metastatic BC5 1st line ECF843 MTV273 CFZ533 QAW039 Kymriah ® RTH258 Promacta®/Revolade® Dry eye Multiple myeloma Sjorgen’s Syndrome Asthma CLL22 Diabetic macular edema SAA17 1st line EMA401 QBW251 INC280 RTH258 Entresto® RTH258 FTY720 Peripheral neuropathic pain COPD NSCLC2 (EGFRm) nAMD6 Heart failure (PEF)13 Retinal vein occlusion Pediatric multiple sclerosis

® ® GP2017 (adalimumab) HDM201 UNR844 PDR001 combo SEG101 Entresto Rydapt Arthritides, plaque psoriasis and others Acute myeloid leukemia Presbyopia Metastatic Melanoma Sickle cell disease Post-acute myocardial infarction AML18 (FLT3 wild type) (same as originator) ® GP2013 (rituximab, US) KAE609 VAY736 VAY736 QGE031 Jakavi Xolair 12 3 14 Follicular lymphoma, DLBCL and Malaria Autoimmune Hepatitis Primary Sjoegren’s syndrome CSU/CIU Acute GVHD Nasal Polyps others (same as originator) ® LA-EP2006 (pegfilgrastim, US) LA-EP2006 (pegfilgrastim, EU) 1. Chronic myeloid leukemia 12. Diffuse large B-cell lymphoma ACZ885 Jakavi Chemotherapy-induced neutropenia and Chemotherapy-induced neutropenia and 2 14 2. Non-small cell lung cancer 13. Preserved ejection fraction Adjuvant NSCLC Chronic GVHD others (same as originator) others (same as originator) 3. Chronic spontaneous urticaria / chronic idiopathic urticaria 14. Graft-versus-host disease 4. Neuroendocrine tumors 15. Multi-drug resistant ACZ885 Kisqali® 5. Breast cancer 16. Retinopathy of prematurity 1st Line NSCLC2 HR+, HER2(-) BC5 (adjuvant) 6. Neovascular age-related macular degeneration 17. Severe aplastic anemia 7. Secondary prevention of cardiovascular events 18. Acute myeloid leukemia a) In collaboration with Amgen; companies to co-commercialize in the US, 8. Indolent Non-Hodgkin’s lymphoma 19. Acute lymphoblastic leukemia Novartis to have AMG 334 exclusive rights in rest of world excluding Japan. New molecule 9. Non-radiographic axial spondyloarthritis 20. Secondary Progressive Multiple Sclerosis b) Approved in US, submitted in EU. 10. Psoriatic arthritis head-to-head study versus adalimumab 21. Long-acting release New indication 11. Ankylosing spondylitis head-to-head study versus adalimumab 22. Chronic Lymphocytic Leukemia Combination abbreviations: New formulation 23. IV formulation Type 1 SMA fulv fulvestrant NSAI Non-steroidal aromatase inhibitor 24. 1st line colorectal cancer / 1st line renal cell ltz letrozole Taf Tafinlar® (dabrafenib) Biosimilars carcinoma tmx tamoxifen Mek Mekinist® (trametinib) 25. IT formulation SMA Type 2/3 gsn goserelin 20 | Novartis R&D and investor update | November 5, 2018 Agenda

21 | Novartis R&D and investor update | November 5, 2018 Key takeaways

AVXS-101 foundational treatment for SMA: rapid, transformational and durable benefit in 1 SMA Type 1 . US, EU, Japan regulatory approvals expected 1H 2019 . Manufacturing capacity in place to deliver in launch markets . Partnering flexibly to introduce AVXS-101

Full clinical program for AVXS-101 underway in all other SMA subtypes 2 . Pre-symptomatic and intrathecal study enrolling rapidly . Next major clinical readouts expected at AAN 2019

Reproducible AAV gene therapy platform 3 . Potential to deliver multiple breakthrough treatments in CNS diseases . Up to 4 new AAV9 programs entering clinic in 2019

22 | Novartis R&D and investor update | November 5, 2018 AveXis, a leading gene therapy company

. Novartis company headquartered in Bannockburn, Illinois Gene . Gene therapy manufacturing sites in Libertyville, IL and therapy Raleigh, NC experts . 500+ employees

. Platform based on AAV9 technology, attractive vehicle AAV9 for CNS diseases platform . Emerging pipeline of AAV9-based assets, including Rett syndrome and genetic ALS entering clinic in 2019

23 | Novartis R&D and investor update | November 5, 2018 AVXS-101 is a one-time treatment to restore production of SMN protein

Proprietary gene One-time treatment AVXS-101 has delivered Regulatory replacement to restore production rapid improvement in submissions therapy product of SMN protein and to motor milestone achieved in the US, candidate for the prevent further motor achievements, dramatic Europe and Japan treatment of neuron death, thereby survival benefit and a for SMA Type 1 spinal muscular increasing motor durable response, and atrophy (SMA) function and favorable safety profile enhancing survival

24 | Novartis R&D and investor update | November 5, 2018 SMA is a devastating genetic neuromuscular disease

SMA is the #1 cause of genetic death in infants, affecting 1 in 10,000 live births

TYPE 1 TYPE 2 TYPE 3

SMN copy # 2 copies of SMN2 3-4 copies of SMN2 3-4 copies of SMN2

Age of onset <6 months 6-18 months Early childhood to early adulthood (juvenile)

Incidence split 60% 30% 10%

Prevalence split1 (population2) 14% (~3,300) 51% (~12,000) 35% (~8,200)

Survival <10% event-free3 by age 2 68% alive at age 25 Normal

1. Spinal Muscular Atrophy: Introduction to SMA families: SMA Foundation. 2. Estimate US, Japan, EU15, Australia, Canada, Turkey. 3. Event = Death or >= 16 hr/day ventilation continuously for >=2 weeks, in the absence of acute reversible illness

25 | Novartis R&D and investor update | November 5, 2018 SMA patient opportunity in key geographies

Yearly incidence Prevalent population Region Type 1 Type 2 Type 3 Type 1 Type 2 Type 3

US 270-300 135-150 45-50 1,260-1,400 4,590-5,100 3,150-3,500

Europe 330-360 165-180 55-60 1,540-1,680 5,610-6,120 3,850-4,200

Japan 24-30 12-15 4-5 112-140 408-510 280-350

1. Symphony claims data. 2. J Neurol. 2017 Jul;264(7):1465-1473. 3. Data on file. 4. Spinal Muscular Atrophy: Introduction to SMA families: SMA Foundation.

26 | Novartis R&D and investor update | November 5, 2018 AXVS-101 gene therapy replaces defective SMN1 gene producing normal (or greater) levels of SMN protein

Normal individual Individual with SMA Functional SMN genes SMN1 SMN2 SMN genes SMN1 SMN2 Primary Back up Primary Back up SMN Protein

Non-functional SMN protein SMN protein SMN Protein

SMA treated with splicing modulators SMA treated with AVXS-101

SMN genes SMN1 SMN2 SMN genes SMN1 SMN2 AVXS-101 Primary Back up Primary Back up SMN1 primary

SMN protein SMN protein

27 | Novartis R&D and investor day | November 5, 2018 AAV9 is an ideal vector for gene transfer in CNS disease

Transduction Can be engineered for selective cell targeting and optimized transduction1 rAAV9 model (cross-section) Safety Non-pathogenic; designed to not integrate the transgene into the host genome2 Less immunogenic than other viruses Low exposure in children (In our studies of SMA Type 1, only 1/413 patients were excluded due to high AAV9 antibody titers) Tropism AAV serotypes display broad tropisms across the serotypes identified4,5 AAV9 crosses blood-brain barrier with high tropism for neuronal cells Versatility AAVs can be engineered for specific functionality in gene therapy applications1

AAV, Adeno-Associated Virus; rAAVs, recombinant AAVs. AAV10 serotype isolated from rhesus macaques. Diagram adapted from DiMattia.J Virol 2012;86:6947. 1. Naso MF. BioDrugs 2017;31:317–334. 2. Thomas CE, et al. Nat Rev Genet 2003;4(5):346–358. 3. Day JW, et al. Poster presented at: The Muscle Study Group Annual Scientific Meeting, Oxford, UK, Sept. 17-19, 2018. 4. DiMattia MA, et al. J Virol 2012;86:6947–6958. 5. Hammond SL, et al. PLoS One 2017;12:e0188830. 5.

28 | Novartis R&D and investor update | November 5, 2018 AVXS-101 designed to start producing SMN RNA and protein immediately & continuously

ITR Enhancer Promoter Intron Human SMN cDNA Poly A ITR

Self-complementary AAV inverted Continuous promoter Human SMN transgene terminal repeats (scAAV ITR) Enhancer and promoter activates the Full copy of a stable, functioning The scAAV ITR increases the speed at transgene to allow for continuous and human SMN gene that is introduced which the double-stranded transgene is sustained SMN protein expression into the cell’s nucleus transcribed and the resulting protein is produced

ITR, inverted terminal repeat; SV simian virus; Poly A, polyadenylation; scAAV, self-complementary AAV. Figure redrawn from Powel SK, et al. Discov Med. 2015;19:49–57.

29 | Novartis R&D and investor update | November 5, 2018 AVXS-101 replaces SMN1 gene with a working copy, promoting survival and proper function of motor neurons

. In mice models, AAV9 led to robust expression in cells throughout the brain and spinal cord, targeting >90% of spinal motor neurons . In non-human primates, intravenous AAV9 leads to robust, sustained transgene expression in 90% of motor neurons

MOTOR NEURON TARGETING IN MICE MOTOR NEURON TARGETING IN NHP

30 | Novartis R&D and investor update | November 5, 2018 Intravenous AVXS-101 demonstrated rapid motor function improvements and survival in SMA mice

Mouse model video – left intentionally blank

31 | Novartis R&D and investor update | November 5, 2018 One-time intrathecal (IT) gene therapy allows CNS- targeted, safe dosing in pediatric and adult patients

AVXS-101 Type 2 / 3 pediatric and adult, and older Type 1 studies will be based on IT formulation

1 One-time IT delivery 2 High transduction efficiency to motor neurons 3 Lower total viral load vs. one-time IV 4 Low viral exposure in periphery

32 | Novartis R&D and investor update | November 5, 2018 Intrathecal AVXS-101 demonstrates remarkable transduction efficiency and durability in primates

Single cerebrospinal fluid (CSF) injection in non-human primates targets 55% to 80% of cervical, thoracic and lumbar spinal cord motor neurons

33 | Novartis R&D and investor update | November 5, 2018 Intrathecal AVXS-101 demonstrated rapid motor function improvements and survival in large animal model of SMA

Control Untreated

video – left intentionally blank

Pre-symptomatic Symptomatic

video – left intentionally blank

34 | Novartis R&D and investor update | November 5, 2018 AveXis developed cutting-edge manufacturing process to deliver AVXS-101

Robust, . Redesigned the Phase 1, institution-grade manufacturing process into commercial process commercially . Developed appropriate assays, process validation and reproducibility scalable process . Demonstrated analytical comparability to FDA

. Early development of best in breed adherent cell manufacturing process In-house expertise . In-house analytical capabilities to fully own process and define product

. Currently building commercial inventory Launch ready . Fully capable of delivering sufficient IV doses for launch markets (US, EU, Japan) . Tripling capacity with Durham, North Carolina site (planned to be operational by 2020)

35 | Novartis R&D and investor update | November 5, 2018 AVXS-101 START trial and follow-up generating robust efficacy, safety and durability data

Cohort 1 (n=3) Minimally-effective dose Enrolled May – Sep 2014 2-year safety Study 15-year long-term follow-up follow-up conclusion Cohort 2 (n=12) Proposed therapeutic dose Enrolled Dec 2014 – Dec 2015 NEJM publication . Oldest patient >4 years old; >3.5 years of data . 13 patients enrolled in LTFU study – 10/12 Cohort 2, 3/3 Cohort 1 – 7/10 from Cohort 2 on AVXS-101 alone

LTFU – Long-term follow up

36 | Novartis R&D and investor update | November 5, 2018 AVXS-101 delivered rapid onset of effect, demonstrated by CHOP-INTEND, with most approaching max score

INTEND ScoresINTEND -

10 CHOP 0 0 5 10 15 20 25 30 Natural History Age (months)

37 | Novartis R&D and investor update | November 5, 2018 AVXS-101 provides rapid and sustained efficacy regardless of severity at baseline

START1 ENDEAR2 FIREFISH3 AVXS BIIB/IONIS Roche/PTCT Dosing One-time, IV dose 4 loading IT doses; Daily oral therapy Every 4 months maintenance Age (Months) at First Dose 3.1 5.4 6.7 Age (Months) at Last Assessment 27.8 19.4 14.9 Ability to Swallow at Baseline 4/12 (33%)7 41/80 (51%)5 20/21 (95%) Baseline CHOP-INTEND 28.2 26.6 24 Results CHOP-INTEND 22.5 10.5 16* Mean Increase (n=12 @ 8 months) (n=25 @ 10 months6) (n=14 @ 8 months) CHOP-INTEND 92% @ 1 month4 71% @ 14 months 93% @ 8 months ≥4 point improvement

1. Mendell JR, et al. N Engl J Med. 2017;377:1713–22 2. Finkel RS, et al. N Engl J Med. 2017;377:1723 3. Presented at the 23rd International Annual Congress of the World Muscle Society, Mendoza, Argentina, October 2–6, 2018 4. Data on file 5. swallowing or feeding difficulties 6. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2016/209531Orig1s000MedR.pdf (Accessed 10/29/18); 7. defined as the ability to swallow thin liquids; *median; Where days were reported, they were converted to months by assuming 30 days per month; where weeks were reported, they were converted to months assuming 4 weeks per month

38 | Novartis R&D and investor update | November 5, 2018 AVXS-101 demonstrated transformational milestone efficacy that continued in long term follow-up

Cutoff: September 27, 2018 Baseline Age at Swallowing Sitting Standing with Eating by Nusinersen in Patient CHOP-INTEND dosing at baseline >30 seconds1 assistance1 mouth2 LTFU2 E.4 29 6 months YES NO E.5 29 4 months YES YES E.6 47 2 months YES NO E.7 25 4 months NO YES E.8 12 8 months NO Not enrolled in LTFU E.9 34 5 months NO Not enrolled in LTFU E.10 50 1 month YES NO E.11 16 2 months NO NO E.12 35 3 months NO NO E.13 14 1 month NO YES E.14 30 4 months NO NO E.15 17 2 months NO NO

1. Presented at the American Academy of Neurology (AAN) Annual Meeting, April 21-27, 2018, Los Angeles, California. 2. As of September 27, 2018 data cut; N/A, patient not enrolled in New milestone achieved in LTFU LTFU; mean age post gene replacement therapy in LTFU is 39 months

39 | Novartis R&D and investor update | November 5, 2018 Slide left intentionally blank

40 | Novartis R&D and investor update | November 5, 2018 Simultaneous regulatory license applications show significant progress for AVXS-101 in SMA Type 1

US . BLA submitted to FDA at the end of Q3 . Potential approval in 1H 2019 (6 months from file acceptance) . Breakthrough Therapy designation

EU . MAA accepted . Potential approval in mid-2019 (7 months from file acceptance) . PRIME designation

Japan . JNDA submitted . Potential approval in 1H 2019 . Sakigake designation

New update since Q3 earnings

41 | Novartis R&D and investor update | November 5, 2018 86 patients dosed to date in broad clinical trial program covering all types of SMA

Delivery SMA Type 2014-2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Completion

Intravenous Pre-symptomatic Phase 3 2020-2023 (IV) Type 1,2,3 9 / 44 patients enrolled – data anticipated at AAN 2019

Type 1 Long-term follow-up START dose-escalation study to identify therapeutic dose 2033 15 patients 13 / 15 patients enrolled – data anticipated at AAN 2019

Phase 3 2020 22 / 22 patients, fully enrolled – data anticipated at AAN 2019

Phase 3 2020 11 / 30 patients enrolled

TBC Planned start Will enroll 6 patients

Intrathecal Type 2 Phase 1 2019 (IT) 29 / 51 patients; fully-enrolled in mid-dose cohort (26 / 26) – data anticipated by AAN 2019

Type 1,2,3 TBC

Final design of REACH to be informed by STRONG Pending

42 | Novartis R&D and investor update | November 5, 2018 SMA Type 2 STRONG safety steps cleared and study mid-dose expansion cohort enrolled

1 patient dosed / month Initiated 1/18 12 Low-Dose Cohort MONTHS . 3 patients <24 months

Initiated 4/18 Last patient Mid-Dose Cohort enrolled 10/18 12 MONTHS . 3 patients <60 months EXPANSION . 23 additional patients in expansion . Total of 26 (13 <60 months and 13 <24 months)

High-Dose Cohort Planned start 12/18 . 3 patients <60 months 12 . 21 patients in expansion EXPANSION MONTHS . Total of 24 (12 <60 months and 12 patients <24 months)

43 | Novartis R&D and investor update | November 5, 2018 Branaplam (LMI070), an additional approach to the treatment of SMA

Phase 1 data presented at WMS demonstrate proof-of-concept

. Observed effects on motor skills support continued study of branaplam . No clinical signs of neurotoxicity and appears to be well-tolerated . The available data suggest a positive benefit vs. risk balance for the treatment of SMA Type 1

While gene therapy would be foundational in SMA, splice modulators may still have a role for the limited number of patients who do not qualify for gene therapy

44 | Novartis R&D and investor update | November 5, 2018 AVXS-101 avoids burdens of chronic therapy

One-time treatment

One-hour infusion

AVXS-101 Out-patient IV for SMA

Reduced anxiety

Reduced caregiver burden

Safety and efficacy of AVXS-101 have not yet been evaluated by regulatory authorities.

45 | Novartis R&D and investor update | November 5, 2018 Considerations in introducing a one-time, potentially curative therapy to healthcare system

1 Chronic vs. one-time treatment “How should value-based prices for gene therapies reflect uncertainty 2 Budget, cost of therapy over time regarding inclusion of additional elements of value that may be Payer fragmentation 3 important for potential cures, but 4 Outcomes and duration which are not part of standard cost-effectiveness methods?”

5 Payment models STEVE PEARSON PRESIDENT, ICER

Office of Health Economics (OHE), Lunchtime Seminar, 10/22/18

46 | Novartis R&D and investor update | November 5, 2018 Flexibly partnering with stakeholders to ensure rapid access is key

“Time Is Neurons” – proposed solutions (under discussion)

Policy Support Program Support Patient Support 1

. Partner with governments, . Programs1 to encourage insurers . Program to cover out-of-pocket hospitals, doctors and payers to to: and travel costs for eligible support rapid diagnosis and . Facilitate SMA screening in patients treatment newborns . No-cost patient assistance . Support newborn screening . Provide coverage for gene program for eligible U.S. implementation and pilot replacement therapy patients experiencing financial programs in the US and EU . Accelerate claims review hardship who have limited or no mechanisms prescription drug coverage . To be available at launch in major 1. Programs are not yet finalized markets as appropriate

47 | Novartis R&D and investor update | November 5, 2018 Value and pricing in life-long rare disease treatment

10-year drug cost vs. incremental QALY gained

Disease Prevalence in US

® GD Type 1 5,4001 ® Fabry 3,8002 ® ® 3 ® Hypophosphatasia 3,257 ® Amyloidosis (hATTR) 3,2504

® SMA Type I 1,260-1,400

MPS IV 1,086 to 1,6295

Hemophilia A Inhibitor with Inhibitors 9616

AHUS 9007

AHUS – Atypical Hemolytic Uraemic Syndrome. GD1 – Gaucher Disease Type 1. MPS IV – Mucopolysaccharidosis Type IV. QALY – quality adjusted life year; SMA – Spinal Muscular Atrophy. Notes: Drug prices were obtained from either NICE Technology Appraisal Guidance or ICER Final Evidence Report and Meeting Summary. Those obtained from NICE were converted into USD using conver. 0.47 1. National Organization for Rare Disorders. Gaucher Disease. Available at: https://rarediseases.org/rare-diseases/gaucher-disease/. 2. National Fabry Disease Foundation. How common is Fabry disease? Available at: https://www.fabrydisease.org/index.php/faq/115-how-common-is-fabry-disease. . 3. Hypophosphatasia. Orphanet J Rare Dis. 2007;2:40. Published 2007 Oct 4. doi:10.1186/1750-1172-2-40. 4. ICER final evidence report. Inotersen and Patisiran for Hereditary Transthyretin Amyloidosis: Effectiveness and Value. Available at: https://icer-review.org/wp-content/uploads/2018/02/ICER_Amyloidosis_Final_Evidence_Report_101718.pdf. sion rate of October 25, 2018 (1.29). AVXS-101 estimated QALY was obtained based on the comparison vs. best supportive care. The fitted regression model for the trend line is: y=63723x + 3E+06, with an R-squared value as Report_041618.pdf 5. National MPS Society. Available at: https://mpssociety.org/learn/diseases/mps-iv/ 6. ICER final evidence report. Emicizumab for Hemophilia A with Inhibitors: Effectiveness and Value. Available at: https://icerreview.org/wpcontent/uploads/2017/08/ICER_Hemophilia_Final_Evidence_ 7. Just how many aHUS patients are there? Available at: http://www.ahusallianceaction.org/just-many-ahus-patients/. All trademarks are the property of their respective owners.

48 | Novartis R&D and investor update | November 5, 2018 AveXis established gene therapy platform reproducible for disease beyond SMA

AveXis Gene Therapy Platform

FDA guidance on gene Establish well-controlled  Validated manufacturing process manufacturing process and  Established AAV analytical methods therapy development suitable analytical assays early to ensure quality Study population should use  Neuromuscular and rare disease existing data / natural history data expertise to determine potential risks,  Natural history study experience benefits Collect as much data as possible  Established protocols and experience to on every patient, and plan for long- meet FDA expectations term follow-up from outset  Over 90 patients treated in first program Initiate product development  Experience in securing appropriate discussions with the agency early designations to enable dialogue (e.g. Breakthrough Therapy)

49 | Novartis R&D and investor update | November 5, 2018 Novartis pipeline building and accelerating since AveXis acquisition

Selected assets Indication Stage Next milestone

AVXS-101 (AAV9) SMA Filed Regulatory approval(s) 1H19

CGF166 (Ad5)1 Hearing loss Phase 1 PoC readout expected 2021

CPK850 (AAV8)1 Retinitis pigmentosa Phase 1 PoC readout expected 2020

AVXS-201 RTT (AAV9) Rett Syndrome Preclinical IND 1Q19

AVXS-301 SOD1 (AAV9) InheritedALS-SOD1 Preclinical IND 2Q19

AVXS-401 Undisclosed Preclinical IND 2H19

AVXS-501 Undisclosed Preclinical IND 4Q19 / 1Q20

POC – proof-of-concept 1. Novartis Institute for Biomedical Research (NIBR) projects

50 | Novartis R&D and investor update | November 5, 2018 Agenda

51 | Novartis R&D and investor update | November 5, 2018 Focused on transformational platforms with differentiated and blockbuster potential medicines in each

CAR-T Radioligand therapies Immunotherapies Targeted therapies

Kymriah® in 177Lu PSMA-R2 in Prostate cancer ACZ885 in ABL001 in CML (3rd line and 1st line) ⎼ CLL 177Lu NeoBOMB1 in ⎼ adjuvant NSCLC BYL719, in PIK3CA mutated advanced HR+/HER2- breast cancer ⎼ r/r DLBCL in 1st relapse ⎼ Breast cancer ⎼ 1st line NSCLC HDM201 in Acute myeloid leukemia ⎼ r/r follicular lymphoma ⎼ Colorectal cancer ⎼ 2nd line NSCLC INC280 in NSCLC, single agent and combination ⎼ combination with pembro ⎼ Lung cancer PDR001, metastic BRAF V600+ melanoma in r/r DLBCL Jakavi® in Chronic and acute GvHD PDR001, multiple combinations in Metastatic ® ⎼ Adult ALL Agreement to acquire Endocyte; first- melanoma Kisqali in HR+ HER2- BC (adjuvant) to-market potential in lead product1 VPM087 in 1st line CRC / 1st line RCC LCI699 in Cushing’s disease Rydapt® in AML, FLT3 wild type Will be discussed in this presentation SEG101 in Sickle cell disease

Projects included are those with planned filings in US and/or EU 1. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company

52 | Novartis R&D and investor update | November 5, 2018 Novartis has one of the most comprehensive CAR-T development programs across multiple indications

. Optimizing manufacturing; advancing multiple indications beyond pediatric & young adult r/r ALL and r/r DLBCL . Can be infused as an outpatient therapy and 4-1BB construct provides for a better safety profile

Phase 2/ CAR-T Type Cancer indication Phase 1 pivotal Phase 3 Submitted Approved

CD19 CAR-T Pediatric & young adult r/r ALL1 US, EU

CD19 CAR-T r/r DLBCL2 US, EU

CD19 CAR-T DLBCL in 1st relapse2 Starting 2019

CD19 CAR-T r/r FL3 Starting 2018 CD19 CAR-T r/r DLBCL2 in combination Started 2018 with pembrolizumab

CD19 CAR-T Adult r/r ALL Starting 2019

CD19 CAR-T CLL4 Starting 2019

CAR-T-BCMA r/r MM5 combination Started 2018

1. ALL – acute lymphoblastic leukemia 2. DLBCL – diffuse large B-cell lymphoma 3. FL - follicular lymphoma 4. CLL – chronic lymphocytic leukemia 5. MM – multiple myeloma

53 | Novartis R&D and investor update | November 5, 2018 Novartis is investing to build leading radioligand therapy platform for cancer

Patient delivery

Lutathera® labeling Patient dose Standard dose of 7.4GBq/cycle Octreotide DOTA-TATE Aseptic conditions

Target Isotope DOTATATE Lutathera® 177Lu Aseptic vial filling Aseptic conditions Precursor Isotope On demand production 176Lu

177Lu Isotope Produced in nuclear reactors

Isotope supply Production Hospital

54 | Novartis R&D and investor update | November 5, 2018 Significant patient population for GEP-NET

GEP-NET1 (in thousands)

Total incidence, 36 GEP-NET 100%

Grade 1 & 2 32 89%

Unresectable/ progressive 27 85%

With SST 26 receptors 96%

2nd Line 22 85%

3rd Line 15 70%

Lutathera ® eligible patient pool All data for US and EU5 in 2017 1. Datamonitor Market Spotlight report, Oct. 2018

55 | Novartis R&D and investor update | November 5, 2018 Overview of Lutathera® (lutetium Lu 177 dotatate1) . Lutathera® belongs to an innovative drug category called RadioLigand Therapy (RLT). RLT involves the systemic administration of a radiopharmaceutical to deliver cytotoxic radiation to a tumor . Received FDA approval for treatment of Gastroenteropancreatic Neuroendocrine Tumors in January 2018; first FDA approval for a Peptide Receptor Radionuclide Therapy . Lutetium Lu 177 dotatate is composed of a lutetium 177 radionuclide chelated to a peptide. Lutetium emits mostly high energy electrons (β-particles; half-life 6.6 days) . The peptide is designed to target somatostatin receptors with high binding affinity

Intravenous Lutathera® binds Lutathera® is Lutathera® Radiation induces infusion to somatostatin internalized into delivers radiation DNA strand receptor type 2 the NET cell within the cancer breaks causing (SSTR2) cell tumor cell death overexpressed by NETs

1. USAN: lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide

56 | Novartis R&D and investor update | November 5, 2018 Lutathera® demonstrated significant PFS improvement in patients with neuroendocrine tumor (NET)

Hazard ratio: 0.21 [0.13 – 0.32] P = <0.0001

79% reduction in risk of disease progression or death N = 229 (ITT) Approved in US and EU LUTATHERA® arm: 27 Octreotide LAR 60 mg: 78 Showing rapid uptake as best second line option after somatostatin analogues >1,100 patients treated in US October 2018 YTD; 85+ centers prescribing 2 months after UK reimbursement, 18 centers prescribing

57 | Novartis R&D and investor update | November 5, 2018 AAA pipeline includes projects in indications beyond NET

Product Disease (target) Preclinical Ph1 Ph2 Ph3 Filing Marketed Status

. Approved US / EU Lutetium Lu Therapeutic . Ongoing ISS for expanded 177 dotatate* Neuroendocrine tumors indications/combinations Gallium Ga 68 (SSTR2) PET Diagnostic (US) . Approved US / EU dotatate/ . Ongoing ISS for additional indications edotreotide PET Diagnostic (EU)

177Lu . Ph1/2 study initiated 2Q-2018 Therapeutic PSMA-R2

68Ga Prostate cancer PET Diagnostic . Ph1/2 study initiated 2Q-2018 PSMA-R2 (PSMA)

18F PET Diagnostic . Ph1 study completed CTT1057

177Lu . Ph1/2 study planned 1H-2019 Breast Cancer Therapeutic NeoBOMB1 Colorectal Cancer 68Ga Lung Cancer, . Ph1 ISS in GIST completed others PET Diagnostic NeoBOMB1 . Ph2 study initiated 2Q-2018 *USAN lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide.

58 | Novartis R&D and investor update | November 5, 2018 Significant patient population for prostate cancer

Prostate Cancer1 (in thousands)

Incidence + newly recurrent, stage IV 196 100% metastatic PC

Castrate resistant 88 (mCRPC) 45%

PSMA+ 70 80%

Note: Higher 2nd Line 75 percentage of 107% metastatic patients in later lines 3rd Line 49 65%2

4th Line 25 51%2

Initial 177Lu-PSMA-617 target patient pool3 All data for US and EU5 in 2017 1. Kantar Health, 2017 and Novartis estimates. 2. Percentage of patients in later lines of therapies was calculated based on the treatment rate of the previous line. 3. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company

59 | Novartis R&D and investor update | November 5, 2018 Endocyte1 uses small molecule ligand to direct radioactive atom to PSMA-expressing cancer cells

RLT that utilizes high affinity targeting ligand to direct potent radiotherapy to prostate cancer cells

177Lu-PSMA-617 pairs PSMA targeting ligand (PSMA-617) to radioactive atom (177Lutetium)

“Ligand” is a small molecule designed to bind to PSMA, a protein highly expressed on the cell surface of most prostate cancer cells

Once bound, the 177Lutetium atom releases an energetic beta particle that kills the cancer cell

PSMA – prostate-specific membrane antigen Source: Endocyte Investor Presentation October 2018. 1. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company

60 | Novartis R&D and investor update | November 5, 2018 Endocyte1 has strong Ph2 clinical data

Sustained response rates in Ph2 trial PSA PFS and OS correlate to PSA response and expansion2 compare favorably to historical benchmarks2

PSA response PSA PFS 50 patients % 50 <30% ≥30% ≥50%

13/50 (26%) 37/50 (74%) 31/50 (62%) Survival Survival probability 00

Overall Survival -50 First 30 patients

p-value comparing PSA <50% group to PSA ≥ 50% group; Updated data cut-off since

-100 Lancet publication Survival probability

Patients Months Source: Endocyte Investor Presentation October 2018. 1. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company. 2. Hofman, Michael (2018, June). Lutetium-177 PSMA617 theranostics in mCRPC: interim results of a phase 2 trial. ASCO 2018, Genitourinary cancer P5040.

61 | Novartis R&D and investor update | November 5, 2018 Endocyte1 pivotal Ph3 trial design with FDA agreement to rPFS as alternative primary endpoint to OS2

177Lu-PSMA-617 Patient inclusion . 750 patients, enrollment Best supportive initiated . mCRPC care3 . Bone and/or soft tissue . In September, FDA agreed Choice of NAAD3 disease to rPFS as an alternative or not primary endpoint to OS as . PSMA-positive scan 2:1 sufficient for full approval2 (~80%) Best supportive Stratified . Key secondary endpoints: . ≥1 prior taxane care3 for balance ORR, time to symptomatic . ≥1 prior NAAD4 skeletal events Choice of NAAD4 or not

Source: Endocyte Investor Presentation October 2018. 1. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company. 2. Endocyte stated demonstrating benefit in rPFS (radiographic Progression Free Survival) versus control, with no detriment to OS, sufficient for full approval; regardless of the outcome of rPFS assessment, Endocyte intends to continue to follow patients in VISION trial to assess final OS alternative primary endpoint as per Endocyte press release on September 10, 2018. 3. Best supportive care – palliative;. 4. NAAD – novel androgen axis drug (abiraterone or enzalutamide).

62 | Novartis R&D and investor update | November 5, 2018 Radioligand therapies key takeaways

Lutathera® belongs to an innovative drug category called radioligand therapy and 1 shows strong launch momentum with Q3 2018 sales of USD 56m

The AAA (radioligand therapy) pipeline has projects in development for indications 2 beyond NET

Novartis has announced an agreement to acquire Endocyte, which would expand 3 the company’s nuclear medicines platform1

1. The acquisition of Endocyte is subject to customary closing conditions, including receipt of regulatory approvals and Endocyte stockholders approval. Until closing, Endocyte will continue to operate as a separate and independent company

63 | Novartis R&D and investor update | November 5, 2018 Canakinumab (ACZ885) targeting IL-1β innate immunity pathway may markedly impact cancer

. IL-1β is elevated in various cancers, including breast, lung, colon, and melanomas1,2, and has been associated with poor prognosis across cancers1 . CANTOS trial’s exploratory analysis regarding relative risk reduction (RRR) in cancer mortality was encouraging

– Incident cancers and cancer deaths was prospective, blinded safety analysis adjudicated by an independent Oncology monitoring committee as agreed with FDA in 2010 – Dose dependent 51% RRR in total cancer mortality (p=0.0009, 300mg); 77% RRR in lung cancer mortality (p=0.0002, 300mg); 67% RRR in incident lung cancers (p=0.00008, 300mg) – History of cancer was an exclusion criteria to study enrollment; baseline CT scans were not conducted, but subsequent sample analysis found presence of circulating tumor DNA in baseline samples of patients diagnosed with lung cancer – Published data on therapies with higher efficacy of treatment correlated with suppression of hsCRP provide rationale for exploring canakinumab . Scientific rationale, encouraging findings from CANTOS trial, and established safety profile of Ilaris® supported prospective Ph3 studies across Stage II – IV NSCLC, which are now ongoing

IL-1, interleukin-1; IL-1α, interleukin-1α; IL-1β, interleukin-1β; MDSC, myeloid-derived suppressor cell. NSCLC, non-small cell lung cancer; hsCRP, high-sensitivity C-reactive protein 1. Dinarello CA. Cancer Metastasis Rev 2010;29:317−29. 2. Brailo V, et al. Med Oral Patol Oral Cir Bucal 2012;17:e10–e15. 3. Apte RN, Voronov E. J Leuk Bio 2017;102:293−306; 4. Lust JA, et al. Mayo Clin Proc 2009;84:114–22.

64 | Novartis R&D and investor update | November 5, 2018 CRP is associated with lung cancer risk, tumor size, and progression

A. Correlation coefficient between lung B. Serum CRP levels in healthy tumor size and serum CRP level showing controls vs localized and . CRP is measured by high-sensitivity a significant linear relationship (P<0.05)2 metastatic NSCLC3 assay (hsCRP) techniques1

5000 . Elevated CRP is associated with a 4000 higher risk of developing lung

3000 cancer2,3 CRP(µg/dl) 2000 . CRP is elevated in NSCLC, 1000 correlates with tumor size and 0 stage, and points to poor outcome Controls Localized Metastatic and prognosis4,5

CRP, C-reactive protein; ELISA, enzyme-linked immunosorbent assay; RAP, resonance acoustic profiling. 1. McBride JD, Cooper MA. J Nanobiotechnology 2008;6:5; 2. Chaturvedi AK, et al. J Clin Oncol 2010;28:2719–26; 3. Siemes C, et al. J Clin Oncol 2006;24:5216–22; 4. Aref H, Refaat S. Egypt J Chest Dis Tuberculosis 2014;63:717–22; 5. Kanoh Y, et al. Oncol Rep 2013;29:469–73 Figure from the Egyptian Journal of Chest Diseases and Tuberculosis, Copyright 2014, https://doi.org/10.1016/j.ejcdt.2014.02.003, Aref H, et al., CRP evaluation in non-small cell lung cancer, licensed under CC BY 4.0.

65 | Novartis R&D and investor update | November 5, 2018 Baseline CRP may predict survival following PD-1 therapy in lung cancer

Late stage NSCLC & SCLC patients (N=99) treated with nivolumab after first line platinum-doublet with median baseline CRP was 22 mg/L Median OSI (Overall Survival after Immunotherapy) after nivolumab treatment for baseline CRP ≤ 50 mg/L was 9.3 months, vs 2.7 months for CRP > 50mg/L (P=0.014)

IASLC Nov. 2017 Abstract 4A. Naquash AR et al. Predictive Utility of CRP in Advanced Stage Lung Cancer Treated with Anti-PD-1 Therapy

66 | Novartis R&D and investor update | November 5, 2018 Canakinumab: monoclonal antibody that targets IL-1β

Canalkinumab binds to human IL-1β and Canakinumab is a human IgGκ neutralizes its monoclonal antibody with high activity by blocking its interaction affinity and specificity for IL-1β 1−3 with IL-1 receptors (dissociation equilibrium constant 35–40 pM)1,2

IL, interleukin; IL-1RI, IL-1 type I receptor; IL1Ra, IL-1 receptor antagonist; IL-1RAcP, IL-1R accessory protein. 1. Kuemmerle-Deschner JB, Haug I. Ther Adv Musculoskelet Dis 2013;5:315–29. 2. Dhimolea E, mAbs 2010;2:3–13; 3. Ilaris [Prescribing Information T2016-102]. Novartis Pharmaceuticals Corporation, East Hanover, NJ, December 2016.

For presentation in response to an unsolicited request for medical information subject to local approval. Not for distribution

67 | Novartis R&D and investor update | November 5, 2018 Reduced diagnosis of overt NSCLC and fatal lung cancer observed in canakinumab arms of CANTOS

Rate of lung cancer Rate of lung cancer mortality

Dose-dependent effect, 67% relative risk reduction Dose-dependent effect, 77% relative risk reduction (canakinumab 300mg) (canakinumab 300mg)

Follow-up years Follow-up years >70% baseline samples with detectable ctDNA with lung cancer driver mutations (p53, EGFR, etc.) . In agreement with FDA in 2010, incident cancers were adjudicated by a blinded independent Oncology monitoring committee . Data on incident cancers including cancer deaths were collected as serious adverse events and analyzed in a prospective fashion . Statistical analysis of cancer incidence and cancer deaths was pre-planned

68 | Novartis R&D and investor update | November 5, 2018 Three Ph3 trials (CANOPY) to explore role of canakinumab in NSCLC

Ph3 trial name Indication and code Patient population Trial design Planned filing

Adjuvant CANOPY-A High-Risk Stage II-III Canakinumab vs. placebo (N=1500 2022 NSCLC with 1:1 randomization) after post- resection chemotherapy

1st line NSCLC CANOPY-1 Non-mutated, no prior Platinum doublet chemotherapy 2021 treatment for metastatic and pembrolizumab with or without disease or Stage III canakinumab (N=600 with 1:1 unresectable randomization)

2nd line NSCLC CANOPY-2 Patients with no more than Docetaxel with or without 2021 2 prior lines of metastatic canakinumab (N=226 with 1:1 treatment randomization)

69 | Novartis R&D and investor update | November 5, 2018 Poor long-term outcomes in patients with early stage lung cancer

. 25-30% of patients are diagnosed early enough for surgical resection1 . With surgical resection alone, recurrence rate is high (~60% at five years)2 . Modest reduction of risk of recurrence with cisplatin-based adjuvant chemotherapy3 . Significant unmet medical need remains for patients with resectable Stage II-III disease4 – Improving current approaches to adjuvant SOC is needed – Novel approaches to neo-adjuvant therapy could additionally improve resectability and long term outcomes

1American community Survey. 2Douillard JY et al, Lancet Oncol 2006; 7: 719–27. 3 Pignon JP et al, J Clin Oncol 2008; 26(21): 3552-9. 4NCCN Treatment Guidelines 2018 for NSCLC.

70 | Novartis R&D and investor update | November 5, 2018 Canakinumab: adjuvant NSCLC program (CANOPY-A)

Patient eligibility criteria • High risk (Stages IIA-IIIA and IIIB with Study endpoints Study T>5cm, N2) & R0 resection Randomization Canakinumab vs. • Primary: RFS design • All histologies 1:1 placebo • Post SoC adjuvant cisplatin-based • Secondary: OS chemotherapy (and SoC RT, if applicable) N=1500

Start date Expected primary Planned filing completion date (i.e., data available Timelines date leading to filing)

Ph3 trial started in March 2018. H2-2021 H1-2022 Recruitment ongoing

~25-30% of NSCLC eligible for treatment1 Opportunity Current standard of care is surgery followed by Chemotherapy +/- RT

RFS – Relapse-free survival OS – Overall survival 1. Molina JR, Yang P, Cassivi SD, et al (2008) Non-small cell lung cancer: epidemiology, riskfactors, treatment, and survivorship. Mayo Clin Proc; 584-94.

71 | Novartis R&D and investor update | November 5, 2018 Canakinumab: scientific rationale for combining canakinumab with anti-PD-1 therapy

. CRP is prognostic/predictive of anti-PD-1/PD-L1 activity in NSCLC; anti- PD-1 appears to be less efficacious in patients with chronic inflammation . Recent data has demonstrated that serum acute phase reactants and other chronic inflammatory proteins are associated with short survival with PD-1 blockade . Unpublished data demonstrate that CRP, Serum Amyloid A, and other acute phase reactants have profound inhibitory effects on T cell proliferation and function, alter T cell phenotype and suppress dendritic cell activation and function, thus contributing to a more immunosuppressive TME . Inhibiting IL1b is hypothesized to have a favorable effect on the tumor microenvironment thereby enhancing the efficacy of SOC chemo- immunotherapy

72 | Novartis R&D and investor update | November 5, 2018 Canakinumab: 1st line NSCLC (CANOPY-1)

Canakinumab vs. placebo Patient eligibility criteria Backbone therapy • Confirmed Stage IIIB, IV NSCLC [no INDUCTION Study endpoints Study driver mutations] Randomization • Primary: PFS & OS Safety run in Platinum doublet + design • Squamous and Non-Squamous 1:1 pembro 4 cycles • Secondary: ORR, DoR, • No prior therapy for metastatic MAINTENANCE DCR, TTR and Safety disease N=27 N=600 Pembro +/- pemetrexed

Start date Expected primary Planned filing completion date (i.e., data available Timelines date leading to filing)

Ph3 planned to start in H1-2021 H2-2021 December 2018

ALK(-), EGFR(-) patients represent ~80% of metastatic NSCLC patients1 Opportunity Various IO+/- chemo and targeted therapies available Canakinumab combination with pembrolizumab could become standard of care PFS – progression free survival OS – overall survival ORR – overall response rate DoR – duration of response DCR – disease control rate TTR – time to progression 1.Chan BA et al Transl Lung Cancer Reserch 2015; 4 (1): 36-54

73 | Novartis R&D and investor update | November 5, 2018 Canakinumab: high unmet medical need remains for unresectable or metastatic NSCLC

. ~70% of patients present with unresectable or metastatic disease1

. Majority of the patients do not have a molecularly targetable driver mutation

. Outcomes of 1L treatment remain dismal; most patients fail treatment in less than a year and die within two years of diagnosis2,3

. Docetaxel as single agent is established SOC with very modest efficacy – Progression free survival of ~3 months – Overall survival ~8 months

1. D Morgensztern, SH Ng, F Gao, R Govindan. Trends in stage distribution for patients with non-small cell lung cancer: A National Cancer Database survey. J Thorac Oncol, 5 (2010), pp. 29-332. Non-small cell lung cancer: epidemiology, riskf actors, treatment, and survivorship. Mayo Clin Proc; 584-94; 3. Gandhi 2018, NEJM; 2. Paz Ares 2018, NEJM.

74 | Novartis R&D and investor update | November 5, 2018 Canakinumab: 2nd line NSCLC (CANOPY-2)

Patient eligibility criteria Docetaxel + • Stage IIIB or IV NSCLC [no driver canakinumab vs. Study endpoints mutations] Study Safety Run-in Randomization docetaxel +placebo • Primary: OS design • Previously treated with platinum 1:1 until disease • Secondary: PFS, therapy and PD(L)1-inhibitor N=6-18 progression ORR, DOR • Measurable disease N=226

Start date Expected primary Planned filing completion date (i.e., data available Timelines date leading to filing)

Ph3 planned to start in H1-2021 H2-2021 December 2018

Only current option post IO treatment is chemotherapy Opportunity

75 | Novartis R&D and investor update | November 5, 2018 Canakinumab key takeaways

There is a high unmet medical need and poor long-term outcomes for patients with 1 NSCLC

CANTOS trial showed reduction in incidence of lung cancer and fatal lung cancer in 2 canakinumab arm

Three Ph3 trials ongoing in adjuvant NSCLC, 1st line NSCLC, and 2nd line NSCLC 3 for canakinumab to become an additional treatment option in these settings

76 | Novartis R&D and investor update | November 5, 2018 Strong presence in hematology helps drive greater potential for crizanlizumab (SEG101)1

Chronic Myelogenous Acute Myeloid Acute Lymphocytic Leukemia Myeloproliferative Leukemia Leukemia Diffuse Large B-Cell Lymphoma Neoplasms

Immune Iron Sickle Cell Thrombocytopenia Overload Disease

Crizanlizumab (SEG101)1

1. Planned filings in US and EU in H1 2019

77 | Novartis R&D and investor update | November 5, 2018 Opportunity is significant for crizanlizumab by helping patients with SCD to have more VOC–free days

Adult SCD patients Large SCD patient population with high unmet need by VOC frequency2 . ~100,000 patients in US1 and ~45,000 in Europe2 . 3 out of 5 adult SCD patients have ≥2 VOC per year2 . VOC is #1 cause of hospitalization in SCD; ~200,000 US emergency visits per year3,4 42% 0-1 VOC / year Crizanlizumab is highly differentiated . 1st drug to target multi-cell adhesion, a key driver of VOC . Clinical efficacy is demonstrated with or without HU . Monthly administration, which could facilitate compliance 33% 2-4 VOC / year Population with some access and compliance challenges but expected to improve with new effective treatment 25% 5+ VOC / year . ~40% of adults treated in specialty centers (>80% of children) . Most covered by Medicaid / Medicare, but accessible with good value proposition . Compliance rate on oral medications in SCD is ~50%

VOC=Vaso-occlusive crisis; SCD=Sickle Cell Disease, HU: hydroxyurea 1. Hassell KL Am J Prev Med. 2010 Apr;38; 2. Kantar Health Patient Chart Study – Novartis. 2. Estimates based on UK: Journal of Public Health, Vol. 40, Issue 3, Sep 2018; FR: Transfus Med Hemother 2018; 45:264-270; Rest of EU: Navigant Research. 3. Ballas SK, et al. Blood, 2012, 120:3647-3656. 4. Yusuf HR, et al. Am J Prev Med. 2010 Apr; 38(4 0): S536–S541;

78 | Novartis R&D and investor update | November 5, 2018 Multi-cell adhesion, mediated by p-selectin, is a key driver of VOCs

Interactions and adhesion of red blood cells, white blood cells, platelets and endothelial cells are critical to pathophysiology . Increased adhesion is due to vascular damage that develops early in SCD patients, exacerbated by reduced erythrocyte deformability

This causes chronic vascular inflammation and promotes vaso-occlusion

P-selectin, a cell adhesion molecule on the surfaces of activated endothelial cells and platelets, plays a critical role in vaso-occlusion by mediating the tethering of blood cell and endothelial cell adhesions

Zhang D et al. Blood 2016;127:801–809; Polanowska-Grabowska R et al. Arterioscler Thromb Vasc Biol 2010;30:2392–2399; Frelinger AL et al. Platelets 2014;25:27–35; Sreeramkumar V et al. Science 2014;346:1234–1238; Matsui NM et al. Blood 2002;100:3790–6.

79 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab, a p-selectin inhibitor, has shown to reduce frequency of VOCs in pivotal SUSTAIN trial

1 Median annual rate of VOC Crizanlizumab 5 mg/kg showed statistically significant and clinically meaningful reduction -45.3% of VOCs that led to a healthcare visit 2.98 Potential disease-modifying therapy 1.63 Planned US and EU filings in H1–2019 (Bridging study in healthy volunteers completed and Placebo Crizanlizumab PK/PD study completed enrollment necessary for 5 mg/kg submission) p3 = 0.010 HL4 = -1.01 (-2.00, 0.00)

Note: SUSTAIN trial was randomized, double-blinded, placebo-controlled 1. VOC=Vaso-occlusive crisis that led to a healthcare visit; 2. HU=Hydroxyurea; 3. Stratified Wilcoxon Rank Sum test; 4. Hodges-Lehmann median difference (95% CI).

80 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab increased proportion of patients free from VOC and delayed these crises Proportion of patients free from VOC Time to first VOC1 for the study period1

> 2x 35.8%

16.9% 3x Placebo Crizanlizumab 5 mg/kg Median for crizanlizumab 5 mg/kg vs. placebo p = 0.013 4.07 vs 1.38 months

VOCs are associated with increased morbidity / mortality, can result in stroke, as well as organ damage or failure2

1. VOC that led to healthcare visit; p= 0.001 (log rank p-value); HR (95%CI) = 0.50 (0.33, 0.74); Kutlar et al, Am J Hematol. 2018 Oct 8. doi: 10.1002/ajh.25308. 2. Piel F, Steinberg M, Rees D. Sickle cell disease. N Engl J Med. 2017;376(16):1561-1573. 81 | Novartis R&D and investor update | November 5, 2018 SUSTAIN study showed consistent results across subgroups

VOC leading to healthcare visit annual rates, by subgroup (standard median) Concomitant HU/HC Number of crises in previous 12 months Sickle cell disease genotypes p2 = 0.084 p2 = 0.046 p2 = 0.279 p2 = 0.005 p2 = 0.060 p2 = 0.223 HL1 = -1.01 HL1 = -1.02 HL1 = -0.05 HL1 = -2.74 HL1 = -1.01 HL1 = -1.01 (-2.44, 0.00) (-2.00, 0.00) (-1.56, 0.01) (-5.00, -0.83) (-2.18, 0.00) (-2.01, 0.00)

Placebo Crizanlizumab 5mg/kg -63.0% 5.32 -32.1% -34.6% 3.58 -50.0% -43.0% 3.01 -50.5% 2.43 n=24 2.00 2.00 1.97 1.97 2.00 n=40 1.00 1.14 n=47 n=42 n=25 n=41 n=25 n=47 n=18 0.99 n=25 n=42 n=20 Yes No 2-4 crises 5-10 crises HbSS Non HbSS 1. Hodges-Lehmann median difference (95% CI). 2. Wilcoxon Rank Sum test. Source: Kanter J, Kutlar A, Liles D, et al. Subgroup analysis of the Phase II SUSTAIN study. Abstract #613. 2017 ASH Annual Meeting, Atlanta, GA.

82 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab: low incidence of adverse events

Overall incidence of

adverse events Incidence of selected adverse events1

88.7% 87.5%

86.4% Placebo Crizanlizumab 2.5 mg/kg

Crizanlizumab 5 mg/kg

18.2%

14.1%

10.9% 10.9% 10.9%

10.6%

8.1%

7.8%

7.6% 7.6% 7.6% 7.6%

6.1% 6.1%

4.8%

4.7% 4.7%

3.4%

3.2% 3.2%

3.1% 3.1%

1.6% 1.6% 1.6%

1.5% 0.0% Any TEAE Arthralgia Diarrhea Fatigue Myalgia Pruritus Vomiting Abdo- Oropha- Chest minal ryngeal pain pain pain

1. Treatment emergent adverse events (TEAE) (PT level) reported in 5% or more of patients in either treatment arms (5 or 2.5 mg/kg) and elevated by at least 2-fold over placebo. Source: SUSTAIN Study

83 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab is differentiated versus emerging new SCD treatments

Crizanlizumab L-glutamine GBT440 Mechanism Inhibits P-selectin Not fully understood, Hemoglobin S modifier, involved in oxidative increasing hemoglobin's damage in RBCs affinity for oxygen Impact on VOCs 45.3% reduction vs. placebo 25% reduction vs. placebo Non statistically significant reduction seen in Part A of Ph3 HOPE study1 Safety profile Well-tolerated Concerns for potential long- Well tolerated term risks to renal and hepatic function Administration Intravenous infusion, potential to Oral powder mixed into Oral pill improve care and compliance due suspension, twice daily to regular healthcare encounters

1. Source: http://ir.globalbloodtx.com/phoenix.zhtml?c=254105&p=irol-newsArticle&ID=2356168 as accessed October 2018.

84 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab key takeaways

VOCs are a major burden and significant unmet need in SCD; more VOC-free days 1 matter to patients and improve quality of life

Crizanlizumab represents a significant opportunity to help SCD patients: 2 . Clinically meaningful reduction of VOCs . Consistent results across patient subgroups . Potential disease-modifying therapy

Planned US and EU filings in H1-2019 3 . Bridging study in healthy volunteers completed . PK/PD study completed enrollment necessary for submission . Pediatric study recruiting, with broader clinical plan in progress

85 | Novartis R&D and investor update | November 5, 2018 Alpelisib (BYL719): potent, specific inhibitor of PI3K-α

Alpelisib specifically inhibits the PI3K-α isoform1,2, thus avoiding the cumulative toxicity associated with inhibition of all four PI3K

Alpelisib 3 PI3K-α inhibitor isoforms

Alpelisib has demonstrated antitumor activity in a number of cancer cell lines and tumor xenograft models, especially those harboring PIK3CA alterations4,5

ER, estrogen receptor; PI3K, phosphatidylinositide 3-kinase; mTOR, mechanistic target of rapamycin; AKT, protein kinase B 1. Fritsch C et al. Mol Cancer Ther 2014;13:1117–1129. 2. Osborne CK, Schiff R. Annu Rev Med 2011; 62:233– 247. 3. Greenwell, IB, et al. Oncology 2017;31(11):821-828. 4. Miller TW, et al. J Clin Oncol 2011;29:4452–61. 5. Bosch A, et al. Sci Transl Med 2015;7:283.

86 | Novartis R&D and investor update | November 5, 2018 Alpelisib SOLAR-1: Ph3 randomized, controlled trial (NCT02437318)

ALP 300 mg QD PO Key eligibility criteria + FUL 500 mg IM1 Primary endpoint Men or postmenopausal PIK3CA-mutant n=169 PFS (locally assessed) in PIK3CA- women, with HR+/HER2- ABC cohort R mutant cohort (n=341) PBO Recurrence/progression + FUL 500 mg IM1 Secondary endpoints include: on/after prior AI 1:1, stratified by presence of n=172 liver/lung metastases and prior OS (PIK3CA-mutant cohort) Identified PIK3CA status (in CDK 4/6 inhibitor treatment archival or fresh tumor tissue) PFS (PIK3CA-non-mutant cohort) ALP 300 mg QD PO PFS (PIK3CA-mutation in ctDNA) Measurable disease or + FUL 500 mg IM1 ≥1 predominantly PIK3CA-non- n=115 OS (PIK3CA-non-mutant cohort) lytic bone lesion R mutant cohort ORR (n=231) ECOG performance status ≤1 PBO + FUL 500 mg IM1 Safety (n=572) n=116

ALP=alpelisib; CBR=clinical benefit rate; CT=chemotherapy; ctDNA=circulating tumor DNA; ECOG=Eastern Cooperative Oncology Group; ET=endocrine therapy; FUL=fulvestrant; IM, intramuscular; ORR=overall response rate; OS=overall survival; PBO=placebo; PFS=progression-free survival; PO=orally; QD=daily; R=randomization; ABC=advanced breast cancer; AI=aromatase inhibitor Source: Andre F, Ciruelos EM, Rubovszky G et al. Alpelisib + fulvestrant for HR+, HER2- advanced breast cancer: Results of the Phase III SOLAR-1 trial. Presented at the European Society for Medical Oncology (ESMO) 2018 Congress (Abstract LBA3_PR) on October 20, 2018 1. Fulvestrant given on Day 1 and Day 15 of the first 28-day cycle, then Day 1 of subsequent 28-day cycles. 87 | Novartis R&D and investor update | November 5, 2018 Alpelisib study met primary endpoint of PFS in the PIK3CA-mutant cohort

Alpelisib + Placebo + 10 Censoring times 0 fulvestrant fulvestrant Alpelisib + fulvestrant PFS (N=169) (N=172) Placebo + fulvestrant No. of PFS events, n (%) 103 (60.9) 129 (75.0) 80 Median PFS (95% CI) 11.0 (7.5-14.5) 5.7 (3.7-7.4)

60 Hazard ratio (95% CI) 0.65 (0.50-0.85)

p-value 0.00065

40 Probability (%) PFS of (%) Probability

Overall survival data immature at this time and will discussed at a later date. Source: Andre F, Ciruelos EM, Rubovszky G et al. Alpelisib + fulvestrant for HR+, HER2- advanced breast cancer: Results of the Phase III SOLAR-1 trial. Presented at the European Society for Medical Oncology (ESMO) 2018 Congress (Abstract LBA3_PR) on October 20, 2018.

88 | Novartis R&D and investor update | November 5, 2018 Alpelisib key takeaways

~40% of HR+/HER2– breast cancer patients have a PIK3CA mutation, which is 1 associated with poor prognosis; currently there are no treatments that target this mutation Alpelisib plus fulvestrant significantly improved PFS and ORR in patients with 2 PIK3CA mutated HR+/HER2- advanced breast cancer1 3 Alpelisib (BYL719) is the first and only investigational alpha-specific PI3K inhibitor to show superior PFS and predictable, manageable tolerability

Health authority interactions have been initiated and regulatory submissions are 4 planned to start in 4Q-2018

1. Following progression on or after an aromatase inhibitor with or without a CDK 4/6 inhibitor, vs. fulvestrant alone.

89 | Novartis R&D and investor update | November 5, 2018 Conclusions

1 Oncology has a portfolio with differentiated medicines and transformational platforms 2 Crizanlizumab (SEG101) is a promising treatment for patients with sickle cell disease, results from a pivotal trial have shown that it prevents VOCs; US and EU filings planned for 2019 3 Ph3 studies of canakinumab (ACZ885) in adjuvant NSCLC, 1st line NSCLC, and 2nd line NSCLC are ongoing; canakinumab has the potential to become the new standard of care in these settings 4 Radioligand therapy platform is broad, with products and indications in development beyond Lutathera® for GEP-NET 5 Alpelisib (BYL719) is the first and only investigational alpha-specific PI3K inhibitor to show superior PFS and predictable, manageable tolerability

90 | Novartis R&D and investor update | November 5, 2018 Appendix Vaso-occlusive Crisis (VOC) is a major burden to sickle cell disease patients

VOC is #1 cause of hospitalization in sickle cell disease (SCD), with ~200,000 emergency department visits per year in US1,2

3 out 5 SCD patients have ≥2 VOC per year3 despite current standard of care

Every single VOC: . Worsens patients’ QoL4 Look beyond the red cell for 5 6 More VOC-Free Days . Increases risk of organ damage and death

QoL=Quality of life; SCD=Sickle Cell Disease 1. Ballas SK, et al. Blood, 2012, 120:3647-3656 2. Yusuf HR, et al. Am J Prev Med. 2010 Apr; 38(4 0): S536–S541; 3. Kantar Health Patient Chart Study – Novartis 4. Anie KA, Grocott H, White L, et al. BMJ Open 2012 5. Audard V et al Orphanet J Rare Dis. 2014 Apr 29;9:67 6. Darbani DS et al. PLoS One. 2013; 8(11).

92 | Novartis R&D and investor update | November 5, 2018 There is a significant unmet need in the care of VOCs despite available treatments

Standard of care for VOCs

Primarily symptomatic treatments, e.g. analgesics, Acute VOC hydration, oxygen, blood transfusions

Hydroxyurea (HU) / hydroxycarbamide (HC) • Limitations may include poor compliance, toxicities Chronic VOC • Many patients on HU still experience VOCs prevention L-glutamine (filed in EU, approved in the US) • Limitations may include difficulty in managing powder formulation • Many patients on L-glutamine still experience VOCs

VOC=Vaso-Occlusive Crisis

93 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab: SUSTAIN study design

Randomized, double-blind, Crizanlizumab Primary efficacy placebo-controlled, multinational study 5.0 mg/kg (n=67) endpoint: N=198 patients Annual rate of VOC . Aged 16–65 years, with leading to healthcare . SCD (HbSS, HbSC, HbSβ0 thalassemia or HbSβ+ visit2, adjudicated by thalassemia) and Crizanlizumab independent crisis review . History of 2–10 VOC leading to health-care visit in committee the previous 12 months1 2.5 mg/kg (n=66) Stratification factors: Key secondary . 2-4 vs 5-10 VOC leading to healthcare visit in the Randomization endpoint: year prior to screening Number of hospitalization . On or off HU/HC Placebo days per year 50-week treatment (n=65)

Source: Ataga KI et al. ASH 2016; Abst#92707; Ataga KI et al. N Eng Jour Med. 2017. 1. Patients receiving hydroxyurea or erythropoietin were included if prescribed for the preceding 6 months and dose was stable for at least 3 months. 2. VOC leading to a healthcare visit is defined as an acute episode of pain with no medically determined cause other than a vaso-occlusive event that requires a medical facility visit and treatment with oral or parenteral narcotics, or parenteral non-steroidal anti-inflammatory drugs. Acute chest syndrome, hepatic sequestration, splenic sequestration and priapism (requiring a visit to a medical facility) were also considered VOC leading to a healthcare visit for analysis purposes.

94 | Novartis R&D and investor update | November 5, 2018 Crizanlizumab generally well tolerated with low incidence of discontinuations due to TEAEs

Overall incidence of TEAEs

Placebo Crizanlizumab 2.5 mg/kg 87.5% 88.7% 86.4% Crizanlizumab 5 mg/kg

32.8% 21.9% 27.4% 25.8% 19.4% 18.2%

4.8% 1.6% 3.0% Any TEAE Any severe Treatment Discontinuation due TEAE emergent to TEAE SAE

TEAE – Treatment emergent adverse events Source: SUSTAIN Study

95 | Novartis R&D and investor update | November 5, 2018 Alpelisib, promising addition to portfolio, strengthening presence in HR+/HER2- breast cancer

]HR- HR+

Alpelisib (α-specific PI3K inhibitor): HR- . Prevalence of PIK3CA mutation is in HER2- HER2- HR+/HER2- approximately 40% of HR+/HER2- ~75K ] ~380K patients advanced breast cancer patients patients (~70%) . Alpelisib potentially represents an (~10%) important therapy for patients with tumors harboring PIK3CA mutations

HER2+ HER2+ ] ~ 110K patients (~20%)

Source: Kantar 2017, G7 patients estimates.

96 | Novartis R&D and investor update | November 5, 2018 Alpelisib adverse events; safety profile manageable

Alpelisib + fulvestrant N=284 Placebo + fulvestrant N=287 AEs ≥20% in either arm, % All Grade 3 Grade 4 All Grade 3 Grade 4 Any adverse event 282 (99.3) 183 (64.4) 33 (11.6) 264 (92.0) 87 (30.3) 15 (5.2) Hyperglycemia 181 (63.7) 93 (32.7) 11 (3.9) 28 (9.8) 1 (0.3) 1 (0.3) Diarrhea 164 (57.7) 19 (6.7) 0 45 (15.7) 1 (0.3) 0 Nausea 127 (44.7) 7 (2.5) 0 64 (22.3) 1 (0.3) 0 Decreased appetite 101 (35.6) 2 (0.7) 0 30 (10.5) 1 (0.3) 0 Rash 101 (35.6) 28 (9.9) 0 17 (5.9) 1 (0.3) 0 Vomiting 77 (27.1) 2 (0.7) 0 28 (9.8) 1 (0.3) 0 Decreased weight 76 (26.8) 11 (3.9) 0 6 (2.1) 0 0 Stomatitis 70 (24.6) 7 (2.5) 0 18 (6.3) 0 0 Fatigue 69 (24.3) 10 (3.5) 0 49 (17.1) 3 (1.0) 0 Asthenia 58 (20.4) 5 (1.8) 0 37 (12.9) 0 0 Hyperglycemia was the most frequent AE leading to treatment discontinuation 19 on-treatment deaths were observed; 7 (2.5%) and 12 (4.2%) in the alpelisib (18 patients [6.3%] in the alpelisib arm and no patients in the placebo arm) and placebo arms, respectively. 2 in alpelisib arm and 4 in placebo arm died due to causes other than study indication (all were unrelated to study treatment)

Source: Andre F, Ciruelos EM, Rubovszky G et al. Alpelisib + fulvestrant for HR+, HER2- advanced breast cancer: Results of the Phase III SOLAR-1 trial. Presented at the European Society for Medical Oncology (ESMO) 2018 Congress (Abstract LBA3_PR) on October 20, 2018.

97 | Novartis R&D and investor update | November 5, 2018 Agenda

98 | Novartis R&D and investor update | November 5, 2018 Fevipiprant (QAW039)

99 | Novartis R&D and investor update | November 5, 2018 “Silent treatment gap” of 3m patients whose asthma remains unresolved despite availability of injectable biologics

5 million moderate-to-severe asthma1 patients in the US

Silent Treatment Gap

Managed by a Unresolved symptoms Patients treated with combination of and exacerbations on inhaled therapies and inhaled therapies inhaled SoC injectable biologics

5m 3m 120k Significant unmet need for patients unresolved on inhaled SoC

1. Moderate to Severe refers to patients on GINA step 4/5 therapies (i.e ICS/LABA ± LAMA). Sources: CDC: US claims data

100 | Novartis R&D and investor update | November 5, 2018 Oral fevipiprant (QAW039) blocks the DP2 pathway, a principal regulator of the asthma inflammatory cascade

DP2 pathway amplifies inflammation

Fevipiprant Exacerbation

Allergic triggers Eosinophil Activation Cough By analogy with other prostaglandin IL-4 receptors, DP2 is now the IUPHAR1 DP2 TH2 IL-5 Breathlessness Inflammation Receptor recommended name for the activation ILC2 IL-13 receptor previously known as

Proliferation Wheeze CRTh2. Reinforced by general Non-allergic triggers ASM trend in literature to reference new

Remodelling nomenclature (DP2)

1.International Union of Basic and Clinical Pharmacology. Domingo C et al; The prostaglandin D2 receptor 2 pathway in asthma: a key player in airway inflammation. Respiratory Research 2018;19:189. Woodward D et al; International Union of Basic and Clinical Pharmacology. LXXXIII: Classification of Prostanoid Receptors, Updating 15 Years of Progress. Pharmacol Rev 2011; 63:471–538. ILC2: type 2 innate lymphoid cells. ASM: Airway Smooth Muscle.

101 | Novartis R&D and investor update | November 5, 2018 Fevipiprant has superior potency, high selectivity, clean safety profile

Ki (nM) T½ (mins) Receptor affinity Receptor residence time

Fevipiprant 1.1 12.0 Superior AZD-1981 3.2 1.3 potency Setipiprant 4.4 0.8 BI-617800 7.2 0.6 Timapiprant 4.5 0.4

High . No activity (IC50 > 10 µM) vs. DP1 receptor and 190 additional molecular targets selectivity . Intact DP1 signaling is important for antiviral immunity and vasodilation

Clean safety . >2,700 patients exposed to Fevipiprant in ongoing clinical program profile . No significant safety signals detected in phase 2 and the ongoing phase 3 program

Note: Lower Ki value and higher T½ value indicate better potency. Sykes D et al; Fevipiprant (QAW039), a Slowly Dissociating CRTh2 Antagonist with the Potential for Improved Clinical Efficacy. Mol Pharmacol 2016; 89:593–605

102 | Novartis R&D and investor update | November 5, 2018 Fevipiprant efficacy increases with asthma severity: Moderate-severe asthma population selected for Ph 3

MILD MODERATE MODERATE TO SEVERE

PoC: A22011 DRF: A22062 Mechanistic: A22083 500mg (total daily dose) Significant  in Significant decrease HIGH Phase 2 data consistent with FEV of >112 ml of sputum eosinophils Overall population, no 1 EOS* published data identifying above placebo (72%), comparable to effect biologics upregulation of PGD2 pathway in Subgroup analysis: 150 mg QD provided patients with severe, poorly optimal effect 450 mg daily dose highest efficacy (FEV1 4 increase) observed in controlled, asthma QD and BID Efficacy on ACQ75 patients with lower lung dosing similar

FEVIPIPRANT function at baseline Other DP2 programs only focused (Predicted FEV <70%) 1 on mild and moderate patients

PHASE PROGRAMS PHASE 2 LOW Change vs. placebo (mL) P = 0.002 EOS* 207 101 56 9

All <80% <75% <70%

* High eos is defined as sputum eosinophils ≥2% (A2208 patient population). Sources: 1. Erpenbeck et al. Pulm Pharmacol Ther 2016;39:54-63. 2. Bateman et al. Eur Respir J 2017; 24:50(2). 3. Gonem et al. Lancet Respir Med 2016. 4. 699-707 4. Fajt et al. J Allergy Clin Immunol 2013; 131:1504-1512. 5. Asthma Control Questionaire

103 | Novartis R&D and investor update | November 5, 2018 Fevipiprant reduced sputum eosinophils to biologic levels providing confidence for Ph3 exacerbation reduction

Placebo-adjusted reduction in sputum eosinophils (% reduction) Cross Study Comparisons High sputum eosinophils are a recognized predictor of exacerbations and poor control in asthma

57% Mepolizumab and Benralizumab significantly decreased reduction with airway sputum eosinophils in Ph2/3 and reduced Mepolizumab2 exacerbations in Ph3 studies Fevipiprant1 Fevipiprant demonstrates similar drop in sputum 72% eosinophils in Ph2 studies supporting expectations for REDUCTION 70% significant exacerbation reduction in Ph3 reduction with Benralizumab3 Fevipiprant also demonstrated efficacy across key clinical endpoints, including lung function, symptom control, QoL

1. Sources: Gonem et al. Lancet Respir Med 2016;4:699-707 (225 mg bid, wk12)

104 | Novartis R&D and investor update | November 5, 2018 Fevipiprant development: targeting biologic efficacy with oral simplicity

Exacerbation reduction % reduction over 52 weeks Administration

Fevipiprant1 30 50 Targeted efficacy profile

2 Benralizumab 28 51

Mepolizumab3 42 53

Reslizumab4 50 59

Dupilumab5 46 67

1. Fevipiprant: Study defines high eosinophil levels ≥250 cells/µL. Targeted efficacy profile studied with GINA step 4/5 patients. 2. Benralizumab: Fitzgerald et al, CALIMA study - Lancet 2016;388: 2128-2141 & Bleecker et al. SIROCCO study - Lancet 2016, 388: 2115-2127. 3. Mepolizumab: Ortega et al. MENSA study - N Engl J Med 2014;371:1198-1207 & Chupp et al. MUSCA study - Lancet Resp Med 2017, 5:390–400. 4. Reslizumab: Castro et al. Lancet Respir Med. 2015;3:355-366. 5. Dupilumab: Castro et al. QUEST study - N Engl J Med. 2018; 378:2486-2496

105 | Novartis R&D and investor update | November 5, 2018 Asthma Ph3 program (>4,500 patients) on track for worldwide regulatory submissions 2020

Trial Asthma population Primary endpoint Study rationale Next milestone

Moderate to Severe Exacerbations Core registration First results 2H2019 (GINA 4/5) 1) High eosinophil1 study Age ≥ 12 years 2) All patients

Moderate to Severe Safety Core registration Fully enrolled 2019 (GINA 3/4/5) study Interim Analysis 2H2019 Age ≥ 12 years

Moderate Lung Function Supportive study Fully enrolled 2019 (GINA 3/4) (FEV1) Results 2020 Age ≥ 12 years

Note: Study treatment durations are LUSTER (52 weeks), SPIRIT (≥52 weeks), ZEAL (12 weeks). In addition, pediatric studies will be conducted as a regulatory commitment. 1. Study defines high eosinophil levels ≥250 cells/µL

106 | Novartis R&D and investor update | November 5, 2018 Fevipiprant, potentially the first oral DP2 receptor antagonist, with compelling base case and significant upside potential in asthma... Outcomes to ongoing fevipiprant Ph3 asthma studies; US patient numbers (≥12 years old)

HIGH BASE CASE: LUSTER trials positive ~400k of these patients meet in high eosinophilic** LUSTER patient entry criteria1 2 patients

ZEAL trials positive 1.5 MILLION PATIENTS

LUSTER trials positive

in all patients EOSINOPHILS (high & low eos)

Base case 1.4 MILLION PATIENTS 1.5 MILLION PATIENTS LOW Opportunity for further potential

Moderate ASTHMA SEVERITY Moderate-to-severe (GINA 3) (GINA 4/5)

1. ≥2 exacerbations in last 12 months. 2. High eosinophils defined as ≥ 250 cells/µL. 1.4mn patients in GINA 3 have unresolved symptoms and exacerbations on GINA 3 regimes

107 | Novartis R&D and investor update | November 5, 2018 ... and significant potential in a broad range of indications beyond asthma, driven by DP2 science

Under development in asthma Evaluating additional for special populations Respiratory indications

Difficult to Pediatric Severe Allergic Nasal treat asthma COPD (1 to < 12 years) Rhinitis polyposis populations

108 | Novartis R&D and investor update | November 5, 2018 Brolucizumab (RTH258)

109 | Novartis R&D and investor update | November 5, 2018 Fluid recurrence is a key measure of AMD disease activity for retinal specialists1

What is the most important factor indicating recurrent wet AMD disease activity in the maintenance phase?

54 Recurrence of Subretinal Fluid 47.9 24.4 Recurrence of Intraretinal Fluid 32.3 9.1 Macular Hemorrhage 10.9 10.5 Loss of Vision 4.9 1.7 Other 4 0.3 Pigment Epithelial Detachment (PED) 0

0 10 20 30 40 50 60 70 80 90 100 International US Percent

1. American Society of Retina Specialists (ASRS) Preferences and Trends (PAT) membership survey 2018

110 | Novartis R&D and investor update | November 5, 2018 Brolucizumab maintained robust vision gains through year 2

Matched Phase Maintenance Phase 10 brolucizumab 3 mg (n = 358) brolucizumab 6 mg (n = 360) aflibercept 2 mg (n = 360) 8 6 4 2 Primary endpoint meta Study end 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96

10 brolucizumab 6 mg (n = 370) aflibercept 2 mg (n = 369) 8 6

LS mean (SE) ETDRS (SE) mean LS letters 4 Primary endpoint meta Change from baseline in BCVA, in baseline from Change 2 Study end 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 Week

Full Analysis Set, LOCF. Mean differences in BCVA (brolucizumab–aflibercept, Δ). a Non-inferiority (NI) margin = 4 letters. Analyzed using ANOVA model with baseline BCVA categories (<=55, 56-70, >=71 letters), age categories (<75,≥75 years) and treatment as fixed effect factors. BCVA, best corrected visual acuity; LOCF, last observation carried forward; LS, least squares; SE, standard error

111 | Novartis R&D and investor update | November 5, 2018 Brolucizumab achieved superior reductions in CST from baseline to Week 16 and Week 48; difference maintained at Week 96

Matched Phase Maintenance Phase 0 -30 brolucizumab 3 mg (n = 358) brolucizumab 6 mg (n = 360) aflibercept 2 mg (n = 360) -60 P<0.0159a -90 P<0.0075a P<0.0105a P<0.0008b -120 P<0.0012b P<0.0057b -150 -180 -210 BL 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96

0 -30

LS mean (SE) mean LS brolucizumab (n=370) aflibercept (n=369) -60 -90 P<0.0001 -120 P<0.0001 P<0.0001

Change from baseline in CST, in baseline from Change -150 -180 -210 BL 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 Week Full Analysis Set, LOCF. Prespecified secondary endpoint in both HAWK and HARRIER. Confirmatory superiority analysis at Week 16 and Week 48 in HAWK only. 1-sided p-values for HAWK; for confirmatory superiority testing in HAWK, 1- sided p-values below the adjusted significance level (to account for multiplicity) of P<0.005 (for CST) are regarded as statistically significant. P-values at Week 96 are descriptive. a brolucizumab 3 mg vs aflibercept 2 mg; b brolucizumab 6 mg vs aflibercept 2 mg. BL, baseline; CST, central subfield thickness; LOCF, last observation carried forward; LS, least squares; SE, standard error

112 | Novartis R&D and investor update | November 5, 2018 Two-year data reaffirm superiority in key secondary endpoints from year one versus aflibercept in patients with nAMD brolucizumab1 aflibercept2 Visual acuity Non-inferior to aflibercept in BCVA change from baseline to Week Non-inferior to ranibizumab in the proportion of 48‡ patients maintaining vision at Week 52 Anatomical . Significantly fewer patients with IRF and/or SRF at Weeks 16 In the clinical studies anatomic measures of outcomes and 48*; difference maintained at Week 96† disease activity improved similarly in all . Superior reductions in CST at Weeks 16 and 48*; difference treatment groups from baseline to week 52 maintained at Week 96† . Fewer patients with sub-RPE fluid at Weeks 16#, 48#, and 96† . Significantly fewer patients with disease activity at Week 16* q12w dosing . >50% of patients maintained on q12w interval after loading Although not as effective as the recommended through Week 48 every 8 week dosing regimen, patients may . Over 75% of those who completed Week 48 on a q12w interval also be treated with one dose every 12 weeks were maintained on q12w interval until Week 96 after one year of effective therapy

*Prespecified secondary endpoint in both HAWK and HARRIER, with confirmatory superiority analysis in HAWK only. *‡Primary endpoint; †Descriptive P-values at Week 96 related to prespecified secondary endpoints assessed at Weeks 16 and 48. #Prespecified secondary endpoint in both HAWK and HARRIER. 1. Data on file, HAWK & HARRIER Ph3. 2. Eylea [package insert]. Tarrytown, NY: Regeneron Pharmaceuticals, Inc. 2018. BCVA, best corrected visual acuity; CST, central subfield thickness; IRF, intraretinal fluid; RPE, retinal pigment epithelium; SRF, subretinal fluid.

113 | Novartis R&D and investor update | November 5, 2018 Brolucizumab has the potential to address important unmet needs in nAMD - dries better

Less retinal fluid1 Less injections2 Uncompromised vision3

*Illustrative

1. At Week 48, demonstrated superiority in three secondary endpoints considered key markers of nAMD in clinical practice: central subfield retinal thickness, retinal fluid (intraretinal fluid and/or subretinal fluid) and disease activity; advantages maintained at Week 96. 2. At Week 48, the majority of patients (56% and 51%) were maintained on q12w injection interval in Hawk and Harrier respectively with remaining patients on q8w regimen (key secondary endpoints); greater than 75% of these patients continued on q12w dosing up to Week 96. 3. Met primary efficacy endpoint of noninferiority to aflibercept in mean change in BCVA with comparable safety to aflibercept; vision gains comparable to aflibercept up to Week 96. Source: US nAMD customer journey research, Oct 2016, OUS nAMD customer journey research, Apr 2018; McKinsey US Patient Journey Feb 2018.

114 | Novartis R&D and investor update | November 5, 2018 MayzentTM (siponimod, formerly BAF312) and Ofatumumab (OMB157)

The brand name MayzentTM has been provisionally approved by the FDA and EMA for the investigational product siponimod (BAF312), but the product itself has not been approved for sale in any country

115 | Novartis R&D and investor update | November 5, 2018 Our leading MS portfolio is supported by cutting edge innovation

Progression is recognized to start earlier than previously thought1 Portfolio aligns to the full Patient relevant outcomes measured spectrum of digitally is the expectation disease Pediatric 2 Ofatumumab

Real-world data and advanced analytics used to gain insights and inform decisions 1st oral 1st in pediatric MS Potential biomarkers, beyond MRI are Category 1st SC B-cell therapy leadership becoming more accessible 1st successful study in typical SPMS 1st in NfLs

1. Kremenchutzky M, et al. The natural history of multiple sclerosis: a geographically based study 9: observations on the progressive phase of the disease. Brain. 2006 Mar;129(Pt 3):584-94. 2. The brand name MayzentTM has been provisionally approved by the FDA and EMA for the investigational product siponimod (BAF312), but the product itself has not been approved for sale in any country. NfL: Neurofilaments light chain, SC: subcutaneous

116 | Novartis R&D and investor update | November 5, 2018 MayzentTM (siponimod, formerly BAF312) Delay progression, EXPAND possibilities

The brand name MayzentTM has been provisionally approved by the FDA and EMA for the investigational product siponimod (BAF312), but the product itself has not been approved for sale in any country

117 | Novartis R&D and investor update | November 5, 2018 MS REALITY Majority of RMS patients transition to SPMS but are we diagnosing them too late?1-3

50-80% of patients progress to SPMS4,5,6: ~362k in U.S & EU7

Figure (top) adapted from Bar-Or A. The immunology of multiple sclerosis. Semin Neurol. 2008;28(1):29-45. Copyright © 2008 Georg Thieme Verlag KG. https://www.thieme-connect.com/DOI/DOI?10.1055/s-2007-1019124. 1. National Multiple Sclerosis Society. About MS. https://www.nationalmssociety.org/For-Professionals/Clinical-Care/About-MS. Accessed August 24, 2018. 2. Bar-Or A. Semin Neurol. 2008;28(1):29-45. 3. Lublin FD, Reingold SC. Neurology. 1996;46(4):907- 911. 4. National Multiple Sclerosis Society. Types of MS. https://www.nationalmssociety.org/What-is-MS/Types-of-MS. Accessed August 24, 2018. 5. Tremlett H. et al, Multiple sclerosis 2008; 14: 314-324; 6. Hawkins S, Wilkins A (2012)] What is disease progression? In: Progressive Multiple Sclerosis. Springer-Verlag London, pp. 11–30. 6. Derived from Systematic literature review (2012), Internal Market Research (2016-18) and IPSOS MS Monitor Q2 2018

118 | Novartis R&D and investor update | November 5, 2018 Unprecedented efficacy of siponimod in EXPAND is expected to break the status quo and drive urgency to identify SPMS earlier

70% of patients received SPMS diagnosis at EDSS > 6 Diagnosed SPMS with or 76% of patients had progression recognized at EDSS < 3 2 84.8% of patients had onset of progression at EDSS < 2 without relapses Irreversible loss of physical and cognitive function, independent of relapses. Death Worsening MS symptoms with decline in Bedridden Restricted to active disease & relapses. Wheelchair 10.0 9.5 ~230K pts US & EU5 9.0 8.5 Increased limitation 8.0 7.5 In walking ability 7.0 MS with signs of increased 6.5 Minimal 6.0 2 5.5 disability progression disability 5.0 Normal Symptoms worsen in a "softer" manner 4.0 Neurological ‘7.0’ bound to despite treatment, more relapses don't return exam 3.0 wheelchair 2.0 ‘6.0’ to baseline, signaling neurodegenerative walking 1.0 aid (1 side) decline or progressive disease ‘4.0’ required 0.0 significant ~132K pts US & EU5 disability

EDSS: Expanded Disability Status Scale. 1. Adapted from: http://www.msunites.com/understanding-the-expanded-disability-status-scale-edss-scale/, Accessed 27 Oct 2018 2. Derived from Systematic literature review (2012), Internal Market Research (2016-18) and IPSOS MS Monitor Q2 2018

119 | Novartis R&D and investor updateday | November | November 5, 2018 5, 2018 Siponimod (BAF312) a highly selective S1P1,5 with a unique and well characterized profile

Comparison of S1P receptor modulators profiles7

Gilenya® (Fingolimod) Ozanimod Siponimod Marketed* Phase 3 complete Phase 3 complete

Studied Phase 3 population RMS * RMS SPMS

Receptor selectivity S1P1,3,4,5 S1P1,5 S1P1,5 An oral, selective S1P receptor modulator1 1,5 Activity of metabolites Fingolimod-P; active Metabolites, active at None . Exerts anti-inflammatory effects by blocking at S1PRs S1PRs S1P1-dependent egress of T and B lymphocytes from lymphoid organs2,3 Elimination Half life of 4 180h 19h; 30h . Readily crosses the blood-brain barrier 7 parent compound (hrs) (CC-112273; 10-13 days8) . Preclinical evidence suggests central anti- inflammatory as well as neuroprotective/ HR reduction upon (no titration) Dose titration over 7d Dose titration over 5d remyelinating properties of siponimod, Treatment initiation 5,6 -7.4bpm @4-5h -5-8bpm nadir @day8 -3bpm @day7 potentially through S1P5

*Gilenya is approved for RMS for adults and pediatric patients, PPMS study did not meet the primary end point S1P1,5, sphingosine 1-phosphate receptors subtypes 1 and 5 1. Gergely P, et al. Br J Pharmacol. 2012;167:1035–1047, 2. Bar-Or A, et al. Mult Scler. 2017;23:P1238, 3. Seabrook TJ, et al. Mult Scler. 2010;16:P858, 4. Briard E, et al. ChemMedChem. 2015;10:1008–1018, 5. Mannioui A, et al. Mult Scler. 2017 [Epub ahead of print], 6. Gentile A, et al. J Neuroinflammation. 2016;13:207. 7. Juif PE, et al. Expert Opin Drug Metab Toxicol. 2016;12:879–895. 8. Disclosed at Celgene Q1 2018 Investors Call, May 4th, 2018

120 | Novartis R&D and investor update | November 5, 2018 EXPAND: the largest Ph3 study in a typical SPMS population

Randomized, double-blind, placebo-controlled, event- and exposure-driven study1

Randomization (N=1651 patients, 2:1)

Event- and exposure-driven duration (actual: 37 months) Up to 7 years Placebo (N=546) Screening Baseline Open-label Double-blind Core Part Extension Part Median duration 18 months (ongoing) Siponimod 2 mg/day (N=1105)

Month 0 3 6 9 12 15 18 21 24 27 30 33 36 EoCP

EDSS/T25FW MRI EXPAND study was conducted across 31 countries and 292 sites

EoCP, end of core part; EDSS, expanded disability status scale; T25FW, timed 25-foot walk 1. Kappos L, et al. Lancet. 2018;391:1263-73.

121 | Novartis R&D and investor update | November 5, 2018 EXPAND Ph3 population is typical SPMS and significantly differs from the other RMS trials

SPMS Recent RMS trials (2010-2015)

EXPAND1 Key differences SPMS DEFINE2 CARE-MS II3 FREEDOMS4 Patient characteristics Siponimod vs RMS studies DMF Alemtuzumab Fingolimod Number of patients 1651 1237 840 1272

Age, years (mean) 48 Older, longer MS 38 35‡ 37 Time since onset, years (mean) 17 duration 5.6# 5 8 EDSS (mean/median) 5.4/6.0 2.4/n.r.# 2.7/2.5‡ 2.4/2.0 More EDSS ≥ 6.0 (%) 56 Disabled 0& 0& 0& Timed 25-foot walk test, mean (sec) 16.7 n.r. n.r. 6.1 % of patients with Gd+ lesions 21 n.r. 42‡ 38 T2 lesion load, mean (cm3) 15 n.r. 6‡ (median) 6 Relapse-free for prior 2 years, (%) 64 Less inflammation 0& 1& 0& On-study relapses (% in comparator group) 19§ 46$* 53$ 54§ On-study ARR (comparator group) 0.16§ 0.36$ 0.52$ 0.40§

§placebo comparator; $IFN β-1a comparator; ‡alemtuzumab 12 mg arm only; #Twice daily BG-12 arm only; &based on inclusion criteria; *at 2 years ARR, annualized relapse rate; EDSS, Expanded Disability Status Scale; Gd+, gadolinium- enhancing, DMF - Dimethyl fumarate 1. Kappos L, et al. Lancet. 2018;391:1263-73.; 2. Gold R, et al. N Engl J Med. 2012;367:1098-107.; 3. Coles AJ, et al. Lancet. 2012;380:1829-39.; 4. Kappos L, et al. N Engl J Med. 2010;362:387-401.

122 | Novartis R&D and investor update | November 5, 2018 EXPAND data suggest meaningful efficacy of siponimod on a variety of measures relevant for SPMS1,2

Primary endpoint 3-month CDP

Secondary endpoint: 6-month CDP

1. Kappos L, et al. Lancet 2018; 391:1263-73. 2. Data on file aPrimary analysis: time to 3-month CDP on Full Analysis Set (FAS) without imputation for missing data. FAS=all treated patients analyzed according to randomization; bCox proportional hazards model with treatment, country/region, baseline EDSS, and SPMS group (with/without superimposed relapses, baseline definition) as covariates. CI, confidence interval; CDP, confirmed disability progression; HR, hazard ratio Gd+, gadolinium-enhancing; SDMT, Symbol Digit Modalities Test ; T2LV, T2 lesion volume; T25FW, timed 25-foot walk test aDifference in change from baseline in adjusted means; bCumulative number of Gd-enhancing T1 lesions per scan up to and including Month 24; cAverage change over Months 12 and 24, relative to previous scan; dDifference in change from baseline in adjusted means over Month 12 and 24

123 | Novartis R&D and investor update | November 5, 2018 Siponimod is the only DMT that demonstrated efficacy in a typical SPMS population

Typical SPMS

EXPAND1 ASCEND2 N.American3 European4 Younger patients, Siponimod Natalizumab IFNB1b study IFN1b study shorter disease

Number of patients 1651 887 939 718 duration, higher Age, years (mean) 48 47 47 41 relapse rate Time since onset, years (mean) 17 17 15 13 EDSS (mean/median) 5.4/6.0 5.6/6.0 5.1/n.r. 5.2 On-study ARR (placebo group) 0.16 0.17 0.28 0.64

3mCDP: 21%↓ Composite2: 6mCDP; hazard (p=0.0130) OR 0.86 (p=0.287) 3mCDP, OR 0.65, ratio not reported, Primary Endpoint 6mCDP: 26%↓ [6mCDP: p=0.0008 p=0.71 (p=0.006) OR 1.06 (p=0.753)]

CDP, confirmed disease progression; OR, odds ratio, ARR, annualized relapse rate; EDSS, Expanded Disability Status Scale; Gd+, gadolinium-enhancing; n.r, not reported; IFNB1b, interferon-beta1b 1. Kappos L, et al. Lancet. 2018;391:1263-73.; 2. Kapoor R, et al. Lancet Neurol. 2018;17:405-15 (composite endpoint included time to EDSS progression, 20% increase in timed 25 foot walk or 20% increase in 9-hole Peg test) 3. Panitch H, et al. Neurology. 2004;63:1788-95. 4. European study group Lancet. 1998;352(9139):1491–7.

124 | Novartis R&D and investor update | November 5, 2018 Additional analysis: disentangling the effect on disability progression from relapses1

Siponimod efficacy in EXPAND was largely independent of relapses ...during the study* ...before the study 3-month confirmed disability progression (FAS) Hazard Ratio Overall population 0.79 3-month confirmed disability progression Risk ratio (95% CrI) Superimposed relapses In the 2 years before studya 0.67 12 months 0.80 (0.56; 1.08) In the year before study1 0.67 No superimposed relapses 18 months 0.86 (0.57; 1.24) In the 2 years before studya 0.87 24 months 0.82 (0.48; 1.32) In the year before study1 0.82 6-month confirmed disability progression 6-month confirmed disability progression (FAS) Overall population 12 months 0.67 (0.44; 0.93) 0.74 Superimposed relapses In the 2 years before studya 0.63 18 months 0.71 (0.42; 1.09) 1 In the year before study 0.70 24 months 0.71 (0.37; 1.21) No superimposed relapses In the 2 years before studya 0.82 In the year before study1 0 0.2 0.4 0.6 0.8 1 1.2 1.4 0.75 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6  Favors siponimod Favors placebo   Favors siponimod Favors placebo 

*Patients who would not relapse over the specified period of time on-study regardless of treatment a Definition as per EXPAND protocol 1 Definition as proposed by Lublin F, et al. Neurology. 2014;83:278─286. 1. Reference: B Cree, et assignment. CrI, credibility interval. 1. Reference: B Cree, et al. Progressive MS Therapies and al. Progressive MS Therapies and Age-Dependent Factors in MS Therapy Session S8.005 (April 22, 2018), AAN Los Angeles n/N’: Age-Dependent Factors in MS Therapy Session S8.005 (April 22, 2018), AAN Los Angeles n=number of subjects with events/N’=number of subjects included in the population. FAS, full analysis set

125 | Novartis R&D and investor update | November 5, 2018 EXPAND safety data was in line with S1P receptor modulation1

. Safety profile of siponimod was overall in line with the well established S1P receptor modulator, fingolimod

. Headache, nasopharyngitis, UTI, and falls – most common adverse events in both treatment groups

. Frequency of infections, malignancies and deaths did not increase with siponimod versus placebo

. Most adverse events were of mild-moderate severity & either treatable or resolve on discontinuation

. First dose effects: dose titration over 5 days mitigated transient heart rate effects on treatment initiation

. Siponimod long-term data (up to 6 years) did not reveal an increased incidence of AEs over time

1 Kappos L, et al. Lancet. 2018;391:1263-73.; and Kappos L, et al. P911; Thursday, 11th October, Poster Session 2, ECTRIMS 2018

126 | Novartis R&D and investor update | November 5, 2018 In partnership with MS experts, we developed a new easy-to-use, office-based tool to assist in diagnosis and uncover SPMS before it is too late

SPMS Diagnosis assist tool Patient and Clinician interviews Global rollout 2019 Analysis of difference RRMS vs SPMS in RWE dataset (> 3000pts) Simsek D; ECTRIMS 2015, Zimenssen T, AAN 2016

Clinicians to rank & weight variables Determine concordance level Piani Maier D, ECTRIMS 2017

Validation study ~200 (RRMS, SPMS, pts in transition) Sensitivity and specificity Raise SPMS Mobilize and Data confirmation. Completion Nov 2018 awareness engage community insights

127 | Novartis R&D and investor update | November 5, 2018 Siponimod regulatory activities

NDA accepted MAA validated Fast Track On Track for Q4 On Track for Q4 Designation granted 2018 submission 2018 submission PDUFA expected Decision expected end of March 2019 latest by Dec 2019 On track for Q4 2018 (PRV used) submission

128 | Novartis R&D and investor update | November 5, 2018 In summary, Mayzent™ delays progression in patients with typical SPMS

. The only investigational DMT that showed efficacy on a variety of measures in typical SPMS patients.

. A next generation S1P receptor modulator; a mitigated first dose HR effect, fast lymphocyte recovery1,2,3 and no active metabolites.

. With unprecedented EXPAND data3, patients who have been considered as “core SPMS” (EDSS ~4.5-5.0) as well as those who only start showing signs of progression independent of relapses are expected to benefit from Mayzent™.

1. Selmaj K, et al. Lancet Neurol. 2013 Aug;12(8):756-67. doi: 10.1016/S1474-4422(13)70102-9. Epub 2013 Jun 11 2. First dose monitoring requirements under health authority review 3. Kappos L, et al. Lancet. 2018; 391:1263-73. The brand name MayzentTM has been provisionally approved by the FDA and EMA for the investigational product siponimod (BAF312), but the product itself has not been approved for sale in any country

129 | Novartis R&D and investor update | November 5, 2018 Ofatumumab (OMB157), V 2.0 B-Cell therapy in development for all RMS patients

130 | Novartis R&D and investor update | November 5, 2018 Target ofatumumab patient population

OFA patients

1st line for RMS pts and as early efficacy switch

Note: this is a fictional patient

Early RMS patient Efficacy switch patient

Age: 24 years Age: 36 years. Previous therapy: None Previous therapy: Teriflunomide Time since first symptoms: 1 year Time since first symptoms: 8 years Relapses: 1 relapse, EDSS: 0.5 Relapses: 1 relapse in 12M, EDSS: 1.5 MRI: 1 Gd+ lesion or T2 lesion MRI: Growing number of Gd+ lesions Note: this is a fictional patient Note: this is a fictional patient

131 | Novartis R&D and investor update | November 5, 2018 Ofatumumab: B-cell therapy expected to deliver high efficacy and improved safety from the start without trade-offs

1 High efficacy at low dose ✓ Fully Human mAb 2 Faster B-Cell repletion and potential preserved immunity1 ✓ Low Dose s.c. dosing ✓ At Home injections Potential for lowest immunogenicity 3 ✓ No Pre-medication

4 Tailored B-cell Tx for RMS patients

1. Poster presented at ECTRIMS 2017, Paris, France

132 | Novartis R&D and investor update | November 5, 2018 Ofatumumab: B-cell therapy expected to deliver high efficacy and improved safety from the start without trade-offs

More potent B-CELL LYSIS

Targeted to the B-CELLS that drive MS

PARTIALLY SPARING the ones needed FOR IMMUNE PRESERVATION

133 | Novartis R&D and investor update | November 5, 2018 Ofatumumab lyses B-Cells more potently

Ofatumumab binds to unique 3 epitopes on CD20 1,2

Ofatumumab Ocrelizumab EC50 (µg/mL) 0.26 2.7

OCR, ocrelizumab; OFA, ofatumumab; RTX, rituximab; Ubli, ublituximab 1. Klein C, et al. mAbs. 2013;5:22–33. 2. Sawas A, et al. Br J Haematol. 2017; 177:243–253. Ab, antibody; aCD20, anti-CD20; EC50, concentration of a drug that gives half-maximal response; FACS, fluorescence-activated cell sorting. 3. Pacheco-Fernandez T, et al. Presented at AAN 2018. S52.003.

134 | Novartis R&D and investor update | November 5, 2018 Significantly lower doses of ofatumumab resulted in similar efficacy in Ph2 (MIRROR study)

Rituximab Phase 2 (HERMES)1 Ocrelizumab Phase 22 Ofatumumab Phase 2b (MIRROR)3

7 5 2.5 Placebo (N=54) RTX 1000 mg (N=69) 6 4 Placebo (N=35) OCR 600 mg (n=51) Placebo (n=67) OCR 2000 mg (n=52) Ofatumumab 3 mg q12w (n=34) 2.0 5 IFN β-1a (n=52) 3 Ofatumumab 30 mg q12w (n=32) 4 1.5 Ofatumumab 60 mg q12w (n=33) 3 2 Ofatumumab 60 mg q4w (n=63) 1.0 p<0.001

2 of number Mean newGd+ lesions 1 0.5 1

Mean Gd+ T1 lesions Cl) Gd+ (95% lesions Mean T1 0 0 0.0 0 4 8 12 16 20 24 8 16 24 36 48 Mean number ofGd+ number lesions Mean 0 8 16 24 32 40 48 Screening Weeks Weeks Weeks

1. Hauser et al,, NEJM, 359; 7, February 14, 2008 2. Kappos et al., Lancet 2011; 378: 1779-87 3 Bar-Or et al., April 2018, Neurology, 2018; 90:e1805-e1814

135 | Novartis R&D and investor update | November 5, 2018 Clinical, modelling and preclinical data suggest ofatumumab has faster B-cell repletion and potential for preserved immunity . Subcutaneous administration could be important and advantageous as compared to intravenous infusions as: – Lymph nodes, where MS antigen presentation occurs, are mainly targeted – Splenic marginal zone B-cells, responsible for host defense, are partially spared Ofatumumab loading + 20mg monthly dosing

Ocrelizumab 600mg i.v. 4 cycles Please refer to slides 141-143 in backup

Reference: Marina Savelieva et al., poster presentation at ECTRIMS 2017; Paul Smith et al.; AAN 2017 scientific presentation

136 | Novartis R&D and investor update | November 5, 2018 ASCLEPIOS Ph3 program in RMS1

Phase 3 studies fully recruited as of Q1 2018

Primary Endpoint: Annualized Relapse Rate Study duration: Event driven study. Secondary Endpoints: Time to 3M disability progression (CDP); A blinded sample size re-assessment in Q1’19 will determine time to 6M CDP; time to 6M confirmed disability improvement (CDI) the end of study timing. Gd enhancing T1 lesions; New or enlarging T2 lesions; Brain volume loss; Serum neurofilaments (NfL).

D, day; EDSS, Expanded Disability Status Scale; M, month; MS, multiple sclerosis; s.c., subcutaneous, CDP – confirmed disability progression, CDI confirmed disability improvement. 1. Hauser S. et al, Platform presentation, AAN 2017, April 22-28, Boston, USA

137 | Novartis R&D and investor update | November 5, 2018

27 Appendix Our wealth of MS data and expertise are assets for us

Cracking the Code of MS Leading the development of accessible biomarkers to identify active disease and prognosis

Neurofilaments5 Novartis database contains high quality clinical and biomarker data . Neurofilament light chain (NfL) is polymer specific to neurons from more than 32,000 MS patients across all age groups and types and can be detected in the blood upon damage to nerve cells1,2 of MS . NfL is tightly linked to MRI lesion measures (T1, T2), relapses and Using advanced data and image analytics we aim to re-characterize future brain atrophy as well as to short and long-term clinical outcomes in MS MS, potentially: . Enable more accurate identification of responders to our therapies . NfL’s high specificity and sensitivity could allow it to serve as a . Understand when progression starts more sensitive measure to detect disease activity even in the 3,4 . De-risk future trials absence of MRI activity

1. Disanto G, et al. Ann Neurol 2017; 81:857–870. 2. Khalil M, et al. Nat Rev Neurol. 2018; doi: 10.1038/s41582–018–0058-z. 3. Kuhle et al., ECTRIMS 2016. 4. Kuhle et al., Neurol.; under review 5. Adapted from Khalil M, et al. Nat Rev Neurol 2018; 14:577–589

139 | Novartis R&D and investor update | November 5, 2018 MS REALITY Reality: secondary progression starts much before formal SPMS diagnosis is made

EDSS, Expanded Disability Status Scale, EDSS: based on standardized neurological examination; CDP: Progression independent of relapse; confirmation after 3 or 6 months 1. Kremenchutzky M, et al. Brain. 2006;129(pt 3):584-594. 2. Sand IK, et al. Mult Scler. 2014;20(12):1654-1657 3. Adapted from: http://www.msunites.com/understanding-the-expanded-disability-status-scale-edss-scale; accessed 27 Oct 2018

140 | Novartis R&D and investor update | November 5, 2018 Animal data suggest that SC administration could be important to maintain protective immunity (Marginal Zone B cells)

SC injection enables potent depletion of follicular B cells while maintaing the level of MZ B cells1

Sparing of marginal zone B-Cells in the spleen, enables protection against important infections2

MZ – Marginal Zone. 1. Poster presented at Schubert A, et all, poster at AAN 2018. 2. A. Cerutti, Nat. Rev. Immunol 2013

141 | Novartis R&D and investor update | November 5, 2018 Animal data suggest that SC administration is important for targeting lymph nodes

Preferential distribution to lymph nodes blocks activation of pathogenic T cells by autoreactive B cells, fighting MS in a critical battlefield

Distribution of Zr-89 labeled tool aCD20 antibody following s.c. injection1

Day 1 Day 3 Day 7

NOTE: %ID/g is % injected dose per gram Lymph nodes

1. Comparison of bio-distribution following subcutaneous and intravenous administration of a novel zirconium-89 labelled anti-CD20 antibody using imaging encore, e-presentation at EAN 2018, June 16–19, Lisbon, Portugal. 2. Data on File

142 | Novartis R&D and investor update | November 5, 2018 Subcutaneous injections result in different tissue distribution as compared to intravenous infusions, with potential preservation of host defense, while maintaining high efficacy Sub-cutaneous administration Intra-venous administration Lymph nodes are important battlefields in MS, The spleen is also rich in CD20+ B-cells7,8. Marginal Zone CD20+B-cells9 where B cells activate T cells1,2 are very important for protective immunity and thus need to be preserved10 Brain Normal skin Gut

Lungs

3 With SC administration , With IV administration the lymphatic system is organs with rich blood the first to encounter the Spleen supply are the first to 4,5,6 anti CD20 mAb encounter the aCD20 Lymphatic Kidneys Liver vessels Heart mAb11 Lymph node

Muscle, skin and Intravenous injection Lymphatic vessels adipose tissues

1. Disanto G, et al. Neurology. 2012;78:823–832. 2. Lehmann-Horn K, et al. Ther Adv Neurol Disord. 2013;6:161–173 3. Zou et al, Drug Metab Disp. 2013 4. Wu F, et al. Pharm Res. 2012;29:1843–1853. 5. Richter WF, et al. AAPS journal. 2012;14:559–570. 6. Migotto M-A, et al. Neurology. 2018; 24(Suppl 2):589. 7. Häusler D, et al. Proc Natl Acad Sci U S A. 2018;115:9773–9778. 8. Edwards JCW, et al. Nat Rev Immunol. 2006;6:394–403. 9. Cerutti, A. et al, Nat Rev Imm 2013. 10. Zouali M, et al. Front Immunol. 2011;2:63 11. Spurill WJ, et al. Concepts in Clinical Pharmacokinetics. 6th ed. Bethesda, MD: American Society of Health-System Pharmacists; 2010:1–18.

143 | Novartis R&D and investor update | November 5, 2018 Ofatumumab global development program1

2017 2018 2019 2020 2021 H1 H2 H1 H2 H1 H2 H1 H2 H1 ASCLEPIOS I/II Phase 3 RMS (~ 900 pts each) G2399 Umbrella Open-Label Extension ~ 5 yrs

Auto-injector BE study SAKURA (Japan registration study)

Primary progressive MS (PPMS) study considerations . PPMS affects 10-15% of MS population . Progression independent of inflammation remains poorly understood and unsolved . Comparing with ocrelizumab and rituximab in PPMS patients would require large number of patients (>2100 patients) . Placebo-controlled design might pose ethical challenges and operational complexity

144 | Novartis R&D and investor update | November 5, 2018

27 BOLD Study1: Siponimod therapeutic dose was selected in RMS population

Significant efficacy of siponimod on active MRI lesions and relapse rates

Active MRI Lesions Annualized Relapse Rate

*p<0.05

Siponimod dose (mg) Placebo Siponimod

*p<0.05 vs. placebo. Siponimod 2 mg is the current therapeutically relevant dose for multiple sclerosis. CUAL, combined unique active lesions, defined as new Gd-enhanced lesions on T1-weighted, or new or enlarging lesions on T2- weighted MRI scans, without double counting; MRI, magnetic resonance imaging; RRMS, relapsing–remitting multiple sclerosis. Selmaj K et al. Lancet Neurol 2013;12:756–67. Cohort 1: 0.5, 2 and 10 mg - treated for 6 months; Cohort 2: 0.25 and 1.25 mg, treatment was initiated after 3 months. So overall treatment duration for Cohort 2 was 3 months only. Siponimod 2 mg is the current therapeutically relevant dose for multiple sclerosis *p<0.05; ^0.25 and 1.25 mg are post hoc analyses. ARR, annualized relapse rate; CI, confidence interval. 1. Selmaj K et al. Lancet Neurol 2013;12:756–67.

145 | Novartis R&D and investor update | November 5, 2018 MS REALITY The realities of SPMS burden significantly impact day-to-day activities and ability to work

“SPMS is the scariest possible news because it has the “least everything”: least information, least hope, least attention, least conversation, least path forward.” Stacey, progressing patient engaged with local and international MS groups

In comparison to RRMS… Physical adaptations can be made in the work environment to sustain employment; however, when Activity Missed time +23% +12% you start noticing yourself that you’re just not able to impairment from work do things the way that you could before, that becomes very, very distressing. +17% Overall work -20% Employment Qualitative interview series with MS healthcare providers impairment rate

RRMS, relapsing-remitting multiple sclerosis; SPMS, secondary progressive multiple sclerosis. 1. Naci H, et al. Journal of Medical Economics, 2010;13: 78–89. 2. Chiaravalotti ND, DeLuca J. Lancet Neurol. 2008;7:1139–51. 3. Davies F et al. Int J MS Care. 2016;18(5):257-264.; 3. Gross HJ, Watson C. Neuropsychiatr Dis Treat. 2017;13:1349–57. Data were utilized from the 2012 and 2013 waves of the US National Health and Wellness Survey, in which patients self-reported their MS type as RRMS (n=458) or SPMS (n=105). Work and activity impairment were assessed by the general health version of the Work Productivity and Activity Impairment questionnaire.

146 | Novartis R&D and investor update | November 5, 2018 Agenda

147 | Novartis R&D and investor update | November 5, 2018 Cosentyx® addresses main needs of dermatologists and rheumatologists

Dermatologists Rheumatologists

. Clear or almost clear skin in PsO . PsA

. Addresses other manifestations of psoriatic disease . AS

. Safe and well tolerated . Safe and well tolerated

. Long-term efficacy / safety data (5 years) . Long-term efficacy / safety data (5 years)

. Access . Access

Exploring additional areas of high unmet medical need for patients, potentially expanding Cosentyx® into new indications

148 | Novartis R&D and investor update | November 5, 2018 Confidence in Cosentyx® comes from 100 studies and extensive Ph3 clinical trial program in PsO, PsA and AS

Source: Novartis, Data on file Note: Many of the cited studies are ongoing. Approved indications for secukinumab are moderate-to-severe plaque psoriasis, psoriatic arthritis and ankylosing spondylitis, according to the product label

149 | Novartis R&D and investor update | November 5, 2018 Cosentyx® blocks IL-17A, the cornerstone cytokine in PsO, PsA, AS Cosentyx ® Mast cell

Other cells IL-17A Innate producing lymphoid cell TNFα Dendritic IL-23 TH17cell cell IL17A

Neutrophil Enthesitis

Skin manifestations Joint manifestations Spine manifestations

NOTE: Multiple pathways exist for IL-17A production and this schematic does not show all IL-23 dependent and independent pathways IL-17A, interleukin 17A; IL-23, interleukin 23; Th17, T helper 17; TNFα, tumor necrosis factor alpha Zeichner JA et al. J Clin Aesthet Dermatol 2016;9:S3-6; Lynde CW et al. J Am Acad dermatol 2014;71:141-150; Cua DJ et al. Nat Rev Immunol 2010;10(7):479-89; Keijsers RR et al. Exp Dermatol 2014;23(11):799-803; Miossec P, Kolls JK. Nat Rev Drug Discov 2012;11:763–76; Lubberts E, et al. Nat Rev Rheumatol 2015;11:415–29; Lories RJ, McInnes IB. Nat Med 2012;18:1018–9; Smith JA, Colbert RA. Arthritis Rheumatol 2014; 66: 231–41; Kehl AS, et al. Arthritis & Rheum 2016;68:312–22; McGonagle D, Benjamin M. Topical Reviews 2009;4:1–6; Mease PJ, et al. Arthritis Care Res (Hoboken) 2017;69(11):1692-1699; Masi AT, et al. Arthritis 2011;2011:205904; Appel H et al. Arthritis Res Ther 2011;13:R95; McGonagle D, et al. Arthritis Rheum 2007;56:2482–91; McGonagle D, et al. Nat Rev Rheumatol. 2015;11:731–40; Baeten D, et al. N Engl J Med 2015;373:2534–48; Mease PJ, et al. N Engl J Med 2015;373:1329–39; McInnes IB, et al. Lancet 2015;386:1137–46; van Tok M, et al. Arthritis Rheumatol 2015;67(Suppl.10):abstract 981

150 | Novartis R&D and investor update | November 5, 2018 2/3 of patients have – beyond plaque psoriasis – scalp, nail, palmoplantar and/or joint involvement

Only 34% have plaque Plaque psoriasis psoriasis alone 34% n=699

with scalp involvement with psoriatic arthritis 38% n=778 38% n=784

with palmoplantar involvement 11% n = 223 with nail involvement 16% n = 326

1. Data on File. Corrona LLC. Corrona Report: Real-World Data From the Corrona Psoriasis Registry® June 15, 2018.

151 | Novartis R&D and investor update | November 5, 2018 The ARROW study – to advance our understanding of IL-17 vs IL-23 inhibition

. Designed to show that secukinumab is superior to guselkumab in clearing ustekinumab-resistant Secukinumab 300 mg s.c. skin plaques R VS. (1:1) . Immune mechanisms responsible for

152 | Novartis R&D and investor update | November 5, 2018 The PREVENT study – Cosentyx® in non-radiographic axial spondyloarthropathy

A Phase 3, randomized, double-blind, placebo-controlled, multicenter study to evaluate the efficacy and safety of secukinumab in patients with non-radiographic axial spondyloarthritis

Population: Planned NSAID-IR, enrolment: open for Primary efficacy 555 patients biologic-IR and 40 endpoint at DMARD-IR Weeks 16 and 52

ASAS40 response Study LPFV (enrollment) rate with secukinumab start date: completion date: vs placebo April 2016 May 2018

ASAS40, Assessment of SpondyloArthritis International Society criteria (ASAS) 40% criteria; biologic-IR, biologic inadequate responders; DMARD-IR, disease-modifying anti-rheumatic drug inadequate responders; NSAID-IR, non-steroidal anti- inflammatory drug inadequate responders; Biologic-IR patients are patients who have had an inadequate response to not more than 1 anti-TNF agent; ClinicalTrials.gov (NCT02696031)

153 | Novartis R&D and investor update | November 5, 2018 Actively exploring expansion beyond the three currently approved indications

Base (approved Indications)

PsO (psoriasis) PsA (psoriatric arthritis) AS (ankylosing spondylitis)

Further expansion (ongoing activities)

Pediatric indications: Juvenile idiopathic Nr-ax SpA (non-radiographic axial SpA) HS (hidradenitis suppuravita) arthritis and enthesitis related arthritis

Other indications & activities (exploration phase)

154 | Novartis R&D and investor update | November 5, 2018 Potential additional dermatology indications

Pyoderma Gangrenosum (PG) Rosacea Vitiligo

Pityriasis Alopecia Areata Rubra Pilaris (AA) (PRP) Potential future Necrobiosis dermatology indications Lipidica Atopic Diabeticorum Dermatitis (AD) (NLD)

Lichen Planopilaris Ichthyosis Cutaneous (LPP) Dermatomyositis

Images are subject to copyright which belongs to authors and cannot be used outside of this meeting (CDM)

155 | Novartis R&D and investor update | November 5, 2018 New evidence potentially expands Entresto® to new indications and reinforcing position as foundational treatment in HF1

. New data strengthens Entresto® as the new standard of care position in HFrEF2, and could transform hospitalizations into a key opportunity for Entresto initiation

. Entresto® has potential to be first approved treatment for HFpEF3, based on a positive PARAGON-HF, likely driven by total HF hospitalizations reduction

. Following PARADISE-MI, Entresto® benefits could be further expanded to heart failure prevention in post-AMI4 patients

1. HF: heart failure. 2. HFrEF: heart failure with reduced ejection fraction. 3. HFpEF: heart failure with preserved ejection fraction. 4. post-AMI: post acute myocardial infarction. Note: HFpEF and post- AMI are future indications under development. Entresto® is not approved to treat these conditions.

156 | Novartis R&D and investor update | November 5, 2018 PIONEER & TRANSITION complement PARADIGM with data on in-hospital initiation, RAAS1 naive & de novo patients

Pivotal HFrEF morbidity and Safety and tolerability of Entresto® Efficacy and safety of mortality study initiation PRE- vs POST-discharge Entresto® initiation PRE-discharge Entresto® vs. enalapril (RCT) Open label Entresto® Entresto® vs. enalapril Ambulatory patients (N=8442) Stabilized ADHF7 patients (N=1002) Stabilized ADHF patients (N=736) . No ACEi/ARB2 naive or new onset . 24% ACEi/ARB naive . 52% ACEi/ARB naive HFrEF3 patients . 29% new onset HFrEF . 34% new onset HFrEF

. 20% RRR in CV death or HF Initiation of Entresto® shortly after . Change from baseline in NT-proBNP hospitalization vs. enalapril4 stabilization of ADHF7 is well . Composite endpoint of serious clinical . Reductions in NT-proBNP5 tolerated, both in-hospital and outcomes (death, HF re-hospitalization, associated with CV death and HF shortly after discharge8 LVAD9, listed for cardiac transplantation) hospitalization benefits for Entresto®6 . Safety . Observed as early as 4 weeks4 To be presented at AHA (Nov 11)

1. RAAS: renin-angiotensin-aldosterone system. 2. ACEi/ARB: angiotensin-converting-enzyme inhibitor/angiotensin II receptor blocker. 3. HFrEF: heart failure with reduced ejection fraction. 4: Packer M, et al. Circulation 2015;131:54–61; 5. NT-proBNP: N-terminal prohormone of brain natriuretic peptide. 6. Zile MR, et al. JACC 2016;68(22):2425–36. 7. ADHF: acute decompensated heart failure. 8. Wachter R et al., TRANSITION primary data poster presentation (P886) at ESC Congress 2018, Munich Germany. 9. LVAD: left ventricular assist device.

157 | Novartis R&D and investor update | November 5, 2018 HF hospitalizations could become a key opportunity to further drive Entresto® initiations

US Epidemiology

2,450k Total eligible HFrEF2 patients

Key opportunity for Entresto® initiation 500k Annual hospitalizations . HF hospitalizations are a key trigger for treatment optimization . Physicians and patients are receptive to treatment change following a HF 300k hospitalization Unique hospitalized patients annually . HF guidelines2 recommend to initiate and uptitrate disease modifying treatment in-hospital

1. HFrEF: heart failure with reduced ejection fraction. 2. ESC and ACC/AHA/HFSA guidelines

158 | Novartis R&D and investor update | November 5, 2018 Ph3 expansion studies with potential to make Entresto® the first approved treatment in HFpEF1 and expand to HF2 prevention

Next expected US eligible Trial Indication / population Endpoints Status milestones patients (k) Novel primary composite Fully enrolled; IA4 in First interpretable results HFpEF, LVEF3 >45% endpoint: CV death and Aug-2018: study expected Q3 2019 N=4822 total (first & recurrent) continues as planned Planned filing in Q4 2019 HF hospitalization 2,450

HFpEF, LVEF >40% Biomarkers, functional Completion expected Q1 Enrolling N=2500 measures, symptoms 2020

Post-AMI5 with evidence of left ventricular Composite primary dysfunction and/or endpoint: CV death, HF Completion expected Q3 pulmonary congestion, Enrolling 140 p.a. hospitalization and 2020 without prior known outpatient HF history of CHF6 N=4650

1. HFpEF- heart failure with preserved ejection fraction. 2. HF: heart failure. 3. LVEF: left ventricular ejection fraction. 4: IA: interim analysis. 5. Post – Acute Myocardial Infarction. 6. Chronic Heart Failure Note: HFpEF and post-AMI are future indications under development. Entresto® is not approved to treat these conditions

159 | Novartis R&D and investor update | November 5, 2018 If approved in HFpEF1, Entresto® will shape a new disease management paradigm

No specific treatments approved for HFpEF Patient management is focused on treating comorbidities and symptoms

HFpEF diagnosis is largely one of exclusion HF2 specific biomarkers may support patient identification

Particular patient profile More likely to be older, female, and hypertensive compared to HFrEF3 patients Higher proportion retained by GPs4 HFpEF patients are more likely to be managed by GPs

Morbidity and mortality HFpEF patients face similar hospitalization burden, but notably a lower CV mortality rate5 vs. HFrEF

In patients with clinical HF, the prevalence of HFpEF is estimated to be up to 50%6

1. HFpEF: heart failure with preserved ejection fraction. 2. HF: heart failure. 3. HFrEF: heart failure with reduced ejection fraction. 4. GP: general practitioner. 5. MAGGIC Study Group. Eur Heart J 2012. 6. Yancy CW et al. Circulation. 2013. Note: HFpEF is a future indication under development. Entresto® is not approved to treat this condition

160 | Novartis R&D and investor update | November 5, 2018 Entresto®: the new standard of care in HFrEF1, with potential for growth in new patient segments and indications

. Strong momentum in HFrEF, on track to exceed USD 1bn in 2018 . The only treatment proven superior to ACEi2 in helping patients to live longer and feel better . Entresto® standard of care position further supported by new in-hospital use data, with additional data upcoming in HFpEF3 and Post-AMI4

1. HFrEF: heart failure with reduced ejection fraction. 2. ACEi: angiotensin-converting-enzyme inhibitor. 3. HFpEF: heart failure with preserved ejection fraction. 4. post-AMI: post acute myocardial infarction. Note: pEF and PAMI are future indications under development. Entresto® is not approved to treat these conditions

161 | Novartis R&D and investor update | November 5, 2018 Gilenya® continues to provide positive data eight years after launch

. >260,000 patients treated worldwide (595,354 PY Exposure)1 . >23,000 patients exposed to fingolimod in clinical trials so far2

TRANSFORMS ASSESS PARADIGMS Head-to-head trial Head-to-head trial Head-to-head trial  (vs. Avonex®) data (vs. Copaxone®) data  (vs. Avonex®) data in Adult RMS in Adult RMS in pediatric RMS

1. Data cut-off 31-08-2018, Novartis Pharmaceuticals Q3 2018 Financial Report dated October 2018 2. Novartis data on file Avonex® is a registered trademark of Biogen. Copaxone® is a registered trademark of Teva Pharmaceuticals LTD

162 | Novartis R&D and investor update | November 5, 2018 Gilenya® first and only DMT to show efficacy in a randomized, controlled pediatric MS trial1

1.0 PARADIGMS study showed: . 82% lower relapse rate 0.67 . significant reductions in MRI lesions . significantly less brain shrinkage 82% reduction . safety profile comparable to previous Gilenya® clinical trials

0.5 p<0.001 ARR FDA approved Gilenya in May 2018 for 0.12 pediatric MS patients2

0.0 Positive CHMP opinion received, EMA Fingolimod (n=107) IFN β-1a IM (n=107) approval expected by end of November

1. Chitnis et al, N Engl J Med 2018; 379:1017-1027. 2. USPI 2018, GILENYA is a sphingosine 1-phosphate receptor modulator indicated for the treatment of relapsing forms of multiple sclerosis (MS) in patients 10 years of age and older.

163 | Novartis R&D and investor update | November 5, 2018 Gilenya® 0.5mg is first DMT to show superior efficacy in RMS vs. Copaxone® in a head to head trial1,2

Aggregate ARR up to Month 12

-40.7% . Gilenya® 0.5mg - significant 40.7% relative reduction in p=0.0138 ARR vs. Copaxone® p=NS . Gilenya® 0.25mg - achieved numerical risk reduction (NS) in ARR vs. Copaxone®

. Safety consistent with the known fingolimod profile

. Copaxone® arm had more discontinuations due to AE ® ® ® Copaxone 20mg Gilenya 0.25mg Gilenya 0.5mg and unsatisfactory treatment effects as compared to N = 324 N = 366 N = 345 Gilenya®

ARR - Annualized relapse rate AE - Adverse events NS – Not statistically significant 1. Post-approval commitment to FDA; randomized, controlled Ph4 study; 1064 patients 2. A formal comparison of fingolimod 0.5mg vs. 0.25mg was not planned (study was not powered for such a comparison) Copaxone® is a registered trademark of Teva Pharmaceuticals LTD

164 | Novartis R&D and investor update | November 5, 2018 Back-up Cosentyx® PREVENT study – what is different?

IL17A First new, promising MoA investigated after TNF-alpha studies No approved/reimbursed biologic for nr-axSpA in many countries, e.g., US, TNF-IR in EU Zero progression? 1st interventional study to investigate effects on structural progression on x-ray and MRI in nr-axSpA

Investigates natural disease course by innovative, flexible, up to 1-year placebo control group

Regulatory Potential to be the 1st Approved anti-IL-17 treatment for nr-axSpA agencies  Central x-ray and MRI reading for inclusion guarantees clean nr-axSpA study population; no dilution by  mechanical back pain pts A unique opportunity for trial patients to receive optimal medical care and clarity around diagnosis, avoidance of overtreatment due to close monitoring by experts, and the ability to help other nr-axSpA patients by advancing scientific knowledge

166 | Novartis R&D and investor update | November 5, 2018 NT-pro-BNP lowering with Entresto® reliably associated with reduced CV death and HF hospitalizations1

. NT-pro-BNP is a guideline-recommend diagnostic and prognostic biomarker for HF2 ; marker of cardiac ventricular wall stress . In PARADIGM, Entresto® was twice as likely to cause a meaningful reduction in NT-proBNP, compared to enalapril1 . Changes observed as early as week 4 and associated with improved CV outcomes1,3 . Entresto® effects on NT-pro-BNP early after stabilization for an acute decompensated HF event from TRANSITION and PIONEER to be presented at AHA

1: Zile MR, et al. JACC 2016;68(22):2425–36 2: Yancy CW, et al. J Am Coll Cardiol 2013; 62:e147–239 3: Packer M, et al. Circulation 2015;131:54–61

167 | Novartis R&D and investor update | November 5, 2018 ASSESS study background and design

. ASSESS study1 was part of the post-approval commitment to FDA in 2010; rationale was to identify the minimally effective dose of fingolimod in RMS . Agreement was to conduct a randomized controlled study assessing fingolimod 0.5 mg and 0.25 mg vs. Copaxone® 20mg/d - Each fingolimod dose was to be tested separately vs. Copaxone® (Primary endpoint – relapse rate) . The study was initially designed to recruit 2,550 RRMS patients; In agreement with FDA, sample size was reduced to 1064 patients given the challenges in recruitment, therefore reducing the power to detect smaller effects sizes.

Screening Dose-blind treatment Follow-up month -1 to Day 0 12 months

Fingolimod 0.5 mg / day* Fingolimod 0.25 mg / day Glatiramer acetate 20 mg / day s.c.

MRI visit Randomisation Month Month Month End of treatmentFollow-up visit 1:1 3 6 9 month 12 month 15

Copaxone® is a registered trademark of Teva Pharmaceuticals LTD 1. Novartis data on file

168 | Novartis R&D and investor update | November 5, 2018 Key definitions and trademarks This presentation contains several important words or phrases that we define as below:

AE: Adverse Event NTD: New Therapeutic Drug ALL: Acute lymphatic leukemia od: once a day AMD: Age-Related Macular Degeneration ORR: Overall response rate AML: Acute myeloid leukemia OS: Overall survival Approval: In Pharmaceuticals and Alcon in US and EU; each indication and regulator combination counts as PA: Prior authorization approval; excludes label updates, CHMP opinions alone and minor approvals PASI 90: 90% reduction in Psoriasis Area Severity Index from baseline aRCC: advanced renal cell cancer PFS: Progression free survival AS: Ankylosing Spondylitis PSA: Prostate specific antigen bid: twice a day PsA: Psoriatic arthritis BC: Breast cancer PsO: Psoriasis BCMA: B-cell maturation antigen PV: Polycythemia vera BCVA: best corrected visual acuity PY: Prior year BS: Biosimilars QoL: Quality of Life BTD: Breakthrough therapy designation RCC: Renal cell cancer CGRP: Calcitonin gene-related peptide RoP: Retinopathy of prematurity CLL: Chronic lymphocytic leukemia r/r ALL: relapsed/refractory acute lymphoblastic leukemia CM: Chronic migraine RRMS: relapsing-remitting multiple sclerosis CML: Chronic myeloid leukemia SCPC: Sickle cell pain crisis COPD: Chronic Obstructive Pulmonary Disease SpA: Spondyloarthropathy CR: complete remission SPMS: Secondary progressive multiple sclerosis CRC: Colorectal Cancer TFR: Treatment-free Remission CSU / CIU: Chronic spontaneous urticaria / Chronic idiopathic urticaria TNBC: Triple negative breast cancer CVRR: Cardiovascular risk reduction DLBCL: Diffuse large B-cell lymphoma Trademarks DMC: Data monitoring committee Eylea® is a registered trademark of Regeneron Pharmaceuticals, Inc. EF: ejection fraction Enbrel®, Epogen® and Neulasta® are a registered trademark of Amgen Inc. EM: Episodic migraine ® FL: Follicular lymphoma Humira is a registered trademark of AbbVie Ltd. FPFV: First patient first visit Remicade® and Stelara® are registered trademarks of Janssen Biotech, Inc. GBM: Glioblastoma multiforme Rituxan® is a registered trademark of Biogen Inc HF: Heart failure HF-pEF: Heart failure with preserved ejection fraction HFrEF: Heart failure with reduced ejection fraction HR+/HER2- mBC: Hormone Receptor positive / Human Epidermal growth factor receptor 2 negative metastatic breast cancer LoE: Loss of exclusivity M/M: Multiple myeloma MF: Myelofibrosis MI: Myocardial infarction MS: Multiple sclerosis NASH: Non-Alcoholic Steatohepatitis NET: Neuroendocrine tumor NSCLC: Non-small cell lung cancer

169 | Novartis R&D and investor update | November 5, 2018