Novartis Delivers Dynamic Sales and Earnings Growth in the First Nine Months of 2006, Reaffirms Outlook for Record Full-Year Results

Market Wire, October, 2006

--  Group continues double-digit expansion

    --  Nine-month net sales up 14% ( 15% lc) to USD 27.0 billion on
    strong underlying growth and acquisition-related contributions

    --  Operating income rises 17%, supported by all divisions as
    productivity initiatives offset Chiron acquisition costs and
    investments in new launches

--  Net income up 16% to USD 5.5 billion, EPS also rises 15% to USD
    2.36 per share

--  Excluding Chiron acquisition-related charges, Group operating
    income for first nine months advances 26% and net income up 23%

--  New Vaccines and Diagnostics division off to a good start after
    creation in April 2006 from Chiron acquisition

--  US and EU submissions completed for Galvus (type 2 diabetes) as
    well as Tekturna(1) and Exforge (hypertension), Tasigna (cancer)
    on track for US/EU submissions in 2006

Key figures

Nine months to September 30

                         YTD 2006            YTD 2005         % Change
                                 % of                 % of
                     USD m   net sales  USD m    net sales    USD    lc
-----------------------------------------------------------------------
Net sales            26 967             23 555                 14    15
Operating income      6 350     23.5     5 417      23.0       17
Net income            5 539     20.5     4 789      20.3       16
-----------------------------------------------------------------------
Basic earnings per
 share/ADS          USD2.36            USD2.05                 15
-----------------------------------------------------------------------

Third quarter

                          Q3 2006             Q3 2005         % Change

                                 % of                 % of
                      USD m  net sales  USD m    net sales    USD    lc
-----------------------------------------------------------------------
Net sales             9 484              8 415                 13    11
Operating income      2 088     22.0     1 888      22.4       11
Net income            1 870     19.7     1 666      19.8       12
-----------------------------------------------------------------------
Basic earnings per
 share/ADS          USD0.80            USD0.71                 13

Excluding charges related to Chiron acquisition, Q3 Group operating income rises 24% and net income up 22%

(1) Tekturna replaces Rasilez as the proposed global brand name for aliskiren

All product names appearing in italics are trademarks of Novartis Group Companies

Basel, October 19, 2006 -- Commenting on the results, Dr. Daniel Vasella, Chairman and CEO of Novartis, said, "I am pleased that all of our divisions delivered strong results in the first nine months of the year. Pharmaceuticals delivered double-digit growth in our Cardiovascular, Oncology and Neuroscience franchises further strengthening their market positions. Our Vaccines and Diagnostics business is progressing well, already having made the industry's first shipments of injectable influenza vaccines to the US. Thanks to our commitment to innovation, we have a full pipeline and have completed major submissions in the US and Europe for Galvus, Tekturna and Exforge. Based on the ongoing strong performance, I am confident that Novartis will continue to grow dynamically and achieve another year of record sales and earnings."

Net sales

Nine months to September 30

                            YTD 2006      YTD 2005       % change
                              USD m        USD m        USD     lc
------------------------------------------------------------------
Pharmaceuticals               16 527       15 014       10      11
Vaccines and Diagnostics         501
Sandoz                         4 306        3 121       38      38
Consumer Health                5 633        5 420        4       5
------------------------------------------------------------------
Total                         26 967       23 555       14      15

--  Solid performances from all divisions drove the expansion, a mixture
    of underlying organic growth and contributions from acquisitions. Volume
    growth represented six percentage points of net sales growth and
    acquisitions eight percentage points. Prices rose one percentage point,
    while currencies led to a decline of one percentage point.

--  Pharmaceuticals again grew faster than the market, with
    Cardiovascular, Oncology and Neuroscience franchises delivering double-
    digit growth. Pharmaceuticals raised its share of the global
    pharmaceuticals market to 4.0% for the first eight months of 2006,
    according to IMS Health. US sales were up 17% on strong volume growth for
    key brands. Volume and product mix contributed six percentage points to net
    sales growth and net price changes added three percentage points. The
    pharmaceuticals activities of Chiron represented two percentage points,
    while currency translations were a decline of one percentage point.

--  Vaccines and Diagnostics net sales of USD 501 million represent the
    period from the acquisition of Chiron in April to form this new division.
    On a pro forma basis since acquisition, vaccines sales rose 60% over the
    year-ago period, mainly from shipments of influenza vaccines to the US and
    pre-pandemic H5N1 flu vaccines to the United Kingdom. Diagnostics net sales
    were up 17% on geographic expansion of nucleic acid blood testing products
    in Europe and the rollout of West Nile Virus tests.

--  Sandoz benefited from good underlying retail generics sales growth,
    particularly in the US, Eastern Europe, Russia, Switzerland, Canada and
    Australia, as well as contributions from the Hexal and Eon Labs
    acquisitions.

--  Consumer Health showed net sales growth of 9% in local currencies
    excluding the Nutrition & Santé divestiture in February 2006. The focus on
    strategic brands fueled double-digit expansion in OTC, which was also
    supported by the mid-2005 acquisition of the OTC business from Bristol-
    Myers Squibb, as well as in Animal Health.