Novartis announces completion of transactions with GSK - Seite 2

In October 2014, the company announced an agreement to divest its influenza vaccines business to CSL Limited for USD 275 million, a transaction that is expected to close at the end of 2015. In January 2014, Novartis completed the sale of its blood transfusion diagnostics unit to Grifols S.A. for USD 1.7 billion.

Deal terms and financial impact
As a result of the divestment of the non-influenza Vaccines business to GSK and the creation of the Novartis OTC and GSK Consumer Healthcare joint venture, Novartis will record a substantial exceptional gain, which will be reported with the release of the Company's 2015 first quarter results.

GSK oncology products
Novartis has acquired GSK's oncology products, including two pipeline candidates, for an aggregate cash consideration of USD 16 billion. Up to USD 1.5 billion of this amount is contingent on certain development milestones.

Novartis OTC and GSK Consumer Healthcare joint venture
Novartis now owns a 36.5% share of the joint venture between Novartis OTC and GSK Consumer Healthcare. The investment will be accounted for using the equity method of accounting and will be reported as income from associated companies. Novartis also has four of eleven seats on the joint venture's Board. Furthermore, Novartis has certain minority rights and exit rights, the latter of which would be executed using a pre-defined, market-based pricing mechanism.

Divestment of non-influenza Vaccines to GSK
Novartis has divested its Vaccines business (excluding its vaccines influenza business) to GSK for up to USD 7.1 billion plus royalties. The USD 7.1 billion consists of USD 5.25 billion paid upon completion and up to USD 1.8 billion in future milestone payments.

Disclaimer
The foregoing release contains forward-looking statements that can be identified by words such as "growing," "pipeline," "expected," "positioning," "expect," "strategy," "to improve," "position," "future," "to create," "anticipated," "will," "opt-in rights," "could," "strategic," "to divest," "contingent," "milestones," "would," or similar terms, or by express or implied discussions regarding potential future sales or earnings of Novartis, or of any of the businesses involved in the announced transactions, regarding potential future milestone payments, regarding the potential completion of the announced transaction with CSL Limited, or regarding any potential strategic benefits, synergies or opportunities as a result of any or all of the transactions discussed in this release. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management 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 Novartis will be able to realize any of the potential strategic benefits, synergies or opportunities as a result of the announced transactions. Nor can there be any guarantee that the remaining transaction with CSL Limited will be completed in the expected form or within the expected time frame or at all. Neither can there be any guarantee that Novartis or any of the businesses involved in the portfolio transformation transactions will achieve any particular financial results in the future, or that any of the outstanding milestones referred to in this release will be met. In particular, management's expectations could be affected by, among other things, the potential that the strategic benefits, synergies or opportunities expected from the transactions may not be fully realized or may take longer to realize than expected; uncertainty that GSK's oncology business will be integrated successfully into Novartis Oncology and that key personnel will be retained; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; unexpected regulatory actions or delays or government regulation generally, including an unexpected failure to obtain necessary government approvals for the remaining transaction, or unexpected delays in obtaining such approvals; the potential that any closing conditions for the remaining transaction might not be met; the uncertainties inherent in research and development, including unexpected clinical trial results and additional analysis of existing clinical data; the Company's ability to obtain or maintain proprietary intellectual property protection; global trends toward health care cost containment, including ongoing pricing pressures; general economic and industry conditions, 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 press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.