Novartis announces completion of transactions with GSK

Novartis International AG / Novartis announces completion of transactions with GSK . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

• Completes transactions with GSK including: acquisition of GSK oncology portfolio, creation of Consumer Healthcare joint venture, and sale of non-influenza Vaccines business
   
• Sharpens company focus on growing segments of innovative pharmaceuticals, eye care and generics
   
• Addition of GSK oncology products and two pipeline compounds is expected to expand Novartis position in targeted therapies and small molecules, positioning Novartis as a preferred partner for combination agents
   
• Transactions expected to immediately lift core margins and further support overall financial strength

Basel, March 2, 2015 - Novartis announced today that it has completed a series of transactions with GlaxoSmithKline plc (GSK), including the acquisition of certain oncology products and pipeline compounds from GSK, the creation of a world-leading consumer healthcare business through a joint venture that combines the two companies' consumer divisions, and the divestiture of the Novartis non-influenza Vaccines business to GSK. The transactions were announced in April 2014 as part of the Novartis global portfolio transformation.

"The completion of the GSK transactions focuses Novartis, and further establishes our leading positions in key growing business segments," said Joseph Jimenez, CEO of Novartis. "We expect this evolution of our strategy to improve margin performance and position us well to meet future changes in the healthcare industry."

Since the end of 2013, Novartis has engaged in a series of transactions to sharpen the company's focus on three core business segments with global scale: innovative pharmaceuticals, eye care and generics.

As a result of today's announcement:

• Novartis Oncology now manages a portfolio of 22 oncology and hematology medicines to treat more than 25 conditions worldwide. Newly-acquired therapies in melanoma, renal cell carcinoma and hematology complement Novartis Oncology's existing group of practice-changing medicines to create a large portfolio of drugs in oncology and hematology targeting important biological disease pathways.
• Based on the depth and breadth of the Novartis Oncology R&D and commercial capabilities, it is anticipated that Novartis will be able to optimize the therapies acquired from GSK. These include:
  • Tafinlar®, a BRAF inhibitor, and Mekinist(TM), a MEK inhibitor, both approved for the treatment of metastatic melanoma. On February 6, 2015, GSK announced overall survival results from the COMBI-d trial which demonstrate a statistically significant reduction in the risk of death (Hazard Ratio [HR] 0.71 [95% Confidence Interval (CI): 0.55, 0.92], p=0.011) for the combination of Tafinlar and Mekinist compared to Tafinlar monotherapy in patients with BRAF V600E/K mutation-positive metastatic melanoma.
  • Votrient®, a VEGFR inhibitor for renal cell carcinoma, which has shown significant efficacy as first-line treatment for renal cancer.
  • Promacta® for thrombocytopenia, Tykerb® for HER2+ metastatic breast cancer and Arzerra® in chronic lymphocytic leukemia are also included in the transaction.
• Novartis also has opt-in rights for GSK's current and future oncology R&D pipeline (excluding oncology vaccines), which could be a source of new compounds and new targets. Sales of the acquired GSK oncology products in 2014 were approximately USD 2.0 billion and grew approximately 32% in local currency against 2013.*
• Novartis OTC and GSK Consumer Healthcare jointly form a global consumer healthcare leader ("GSK Consumer Healthcare") in which Novartis maintains significant interest through the ownership of a 36.5% share. GSK Consumer Healthcare is expected to have leading positions in four key OTC categories - Wellness, Oral Health, Nutrition and Skin Health. The joint venture has scale and commercial presence in the developed world as well as in key emerging markets.
• The Novartis non -influenza Vaccines business has been divested to GSK.  

Since 2013, Novartis has executed other strategic transactions to transform the Company's portfolio. In January 2015, the Company completed the sale of its Animal Health business to Eli Lilly and Company for approximately USD 5.4 billion. As a result of the transaction with Eli Lilly, Novartis will show in the first quarter of 2015 an exceptional pre-tax gain of approximately USD 4.7 billion.