SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated April 19, 2002
Novartis AG
(Name of Registrant)
Lichtstrasse 35
4056 Basel
Switzerland
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(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or
will file annual reports under cover of
Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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Enclosure: Novartis First Quarter Results Presentation - 18 April 2002
[Logo]
Growth Momentum Carries On
First Quarter Results
18 April 2002
This presentation contains certain "forward-looking statements" relating to the
Company's business:
o The statements can be identified by the use of forward-looking terminology
or by discussions of strategy, plans or intentions.
o The statements include descriptions and anticipated expenditures of the
Company's' investment in research and development programs, descriptions of
new products expected to be introduced by the Company and anticipated
customer demand for these and existing products in the Company's' existing
portfolios.
o The statements reflect the current views of the Company with respect to
future events and are subject to certain risks, uncertainties and
assumptions.
o Many factors could cause the actual results, performance or achievements of
the Company to be materially different from any future results,
performances or achievements that may be expressed or implied by the
forward-looking statements. These factors can be found in the Annual
Reports the Company has filed with the U.S. Securities and Exchange
Commission.
o Specific risk factors include unexpected regulatory delays, uncertainties
relating to clinical trials and product development, the introduction of
competing products, increased government pricing pressures, and the
Company's' ability to obtain or maintain patent and other proprietary
intellectual property protection.
o If any of these risks materialize, or underlying assumptions prove
incorrect, actual results may vary materially from those one might expect
on the basis of this presentation.
Agenda
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o Overview of sales and results
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o Pharmaceuticals
- Key growth drivers
- Outlook
o Group outlook
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3
Novartis Continues Dynamic Growth Path
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o Growth momentum carries on
o Performance driven by double-digit growth trend in Pharmaceuticals with
strong demand for Cardiovascular, Oncology and Ophthalmics franchises
across all regions
o Performance momentum and rise in net financial income lead to net income
increase of 20% to CHF 1.79 bn
o Key product launches sharpen performance in Generics
o Divestment of Health and Functional Food on track
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4
Net Income Expansion On the Back of Strong Operational Performance and Net
Financial Income
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in CHF m Q1 2002 Q1 2001 in % CHF
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Sales 7,967 7,224 10
Operating income 1,822 1,545 18
as a % of sales 22.9 21.4
Net financial income 378 217 74
Net income 1,788 1,485 20
as a % of sales 22.4 20.6
EPS (CHF) 0.70 0.57 23
Free cash flow
after dividend -508 -368 -38
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Dynamic Performance Delivered Through
Pharmaceuticals and Generics
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Sales: CHF 8 bn, +13% in local currencies, +10% in CHF
Sales growth in % (LC) Sales by region in %
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Pharmaceuticals 16 Asia/Austrialia/Afica 16%
Generics 26 Europe 33%
OTC -3 US 43%
Animal Health 8 Rest of Americas 8%
Medical Nutrition 3
Infant & Baby 3
CIBA Vision 4
GROUP 13
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Performance Driven by Volume Increase
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[GRAPHIC OMITTED]
Volume 11%
Price +1%
Acq./Div. +1%
Currency -3%
CHF 10%
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First Quarter Operating Income up 18%
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Operating income growth Operating income by sector
in % (CHF)
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Pharmaceuticals 16 Pharmaceuticals 81%
Generics 42 OTC 3%
OTC -7 Generics 5%
Animal Health -5 Infant & Baby 6%
Medical Nutrition 28 Animal Health 2%
Infant & Baby 10 Medical Nutrition 1%
CIBA Vision(1) 12 CIBA Vision 2%
GROUP 18
(1) Including integration costs associated with the Wesley Jessen acquisition
of CHF 28m in 2001.
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Improvements in COGS and Slower Increase in Marketing & Distribution Boost
Operating Income
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[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Q1/2002 CHF m Change in % in CHF
Sales 7,967 10
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Cost of goods sold -1,983 6
Marketing & Distribution -2,681 7
Research & Development -1,041 12
General & Administration -440 17
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Operating income 1,822 18
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Highlights in Generics, OTC and Animal Health
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Generics
o Recent launches in US in Retail Generics fuel growth to 20% in LC(1)
- Generic Prozac (depression), July 2001
- Generic Metformin (diabetes), January 2002
- Generic Relifex (anti-inflammatory), February 2002
OTC
o Sales decline of 3% in LC. Excluding discontinued distribution agreements
sales increased 3% in LC driven by:
- Lamisil(R) cream (fungal infection)
- Nicotinell(R)/Habitrol(R) (smoking cessation)
- Maalox(R) (antacid)
Animal Health
o Recent acquisitions of vaccine businesses lead to rise in sales of 8% in LC
o Farm animal business sees improvement over last year
(1) excluding acquisitions
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Highlights in Medical Nutrition, Infant & Baby and CIBA Vision
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Medical Nutrition (incl. Health and Functional Food)
o Supplement business in Medical Nutrition boosts sales
o Health and Functional Food divestment on track
Infant & Baby
o Gerber Graduates and Tender Harvest underpin strong market position of
Gerber in US
o Gerber Wellness driving growth through sales to key accounts
CIBA Vision
o Innovation behind performance
- Focus(R) DAILIES(R)
- Focus(R) Night & DayTM
- Freshlook(R)
- Surgical lenses
o Key Brands account for 44% of revenue at CIBA Vision
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Agenda
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o Overview of sales and results
o Pharmaceuticals
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- Key growth drivers
------------------
- Outlook
o Group outlook
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Pharmaceuticals - Key Achievements
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o Continued dynamic growth trend with + 16% in LC
o Strong growth across all regions with US up 23% in LC
o Leadership in Cardiovascular and Oncology franchises bolstered by key
growth drivers
o Recent launches Zometa(R) and Elidel(R) off to a good start
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Strong Pharmaceutical Sales Growth in Key Regions
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Q1 Sales 2002 Growth Market
(CHF m) (in LC) Growth(1)
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US 2,238 23% 16%
Europe 1,605 9% 9%
Japan 480 12% 8%
LatAm 318 22% -7%(2)
Asia/Pacific 407 14% n/a
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Total(3) 5,153 +16%
1 IMS monthly YTD Feb, 16 countries
2 Argentina, Brazil and Mexico
3 Total includes Canada and others
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Key Franchises Outperforming the Market
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[GRAPHIC OMITTED]
Cardiovascular*
Market growth, IMS 16 countries Feb YTD 2002 14%
Novartis growth, IMS 16 countries Feb YTD 2002 35%
Oncology
Market growth, IMS 16 countries Feb YTD 2002 21%
Novartis growth, IMS 16 countries Feb YTD 2002 34%
Source: IMS
* Cardiovascular: Anti hypertensives, Statins, Fibrates, OAD
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Strategic Products Drive Growth
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Sales Growth
Brand (1 to 10) Market segment (CHF m) (% LC)
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Diovan(R)/Co-Diovan(R) Hypertension 601 +80
Sandimmun(R)/Neoral(R) Transplantation 451 -1
Cibacen(R)/Lotensin(R) Hypertension 417 +39
of which Lotrel(R) 223 +55
Sandostatin(R) Acromegaly 250 +30
Lamisil(R)(1) Fungal infections 237 -16
Voltaren(R)(1) Antirheumatics 236 -3
LescoI Cholesterol reduction 217 +31
Aredia(R) Oncology (bone) 194 -40
Glivec(R)/GleevecTM Chronic myeloid leuk. 183 n/a
Tegretol(R) Epilepsy 162 +8
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1 First quarter 2001 restated due to switches to other sectors
16 [Novartis Logo]
Strategic Products Drive Growth (continued)
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Sales Growth
Brand (11 to 20) Market segment (CHF m) (% LC)
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Miacalcic(R) Osteoporosis 149 -13
HRT range(1) Hormone replacement 125 +25
Leponex(R)/Clorazil(R) Schizophrenia 124 -5
Exelon(R) Alzheimer's disease 121 +23
VisudyneTM Wet form of AMD 115 +47
Zometa(R) Hypercalcaemia 112 n/a
Foradil(R) Asthma, COPD 108 +15
Famvir(R)(2) Antivirals 103 +26
Trileptal(R) Epilepsy 82 +82
Femara(R) Adv. breast cancer 69 +63
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Total Pharmaceuticals 5,153 +16
1 Including Clima/Meri range
2 First quarter 2001 restated due to switches to other sectors
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Sandimmun(R)/Neoral(R)
Slow Generic Erosion in US
[GRAPHIC OMITTED]
o Q1 sales worldwide:
CHF 451m,-1% in LC
o Continued slow generic erosion in US
o Little impact in Europe
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Diovan(R) - Leadership in US
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[GRAPHIC OMITTED]
March 2002:
Diovan, 36.8%
Cozaar, 34.6%
o Q1 2002 sales worldwide:
CHF 601 m, +80% LC
o Continues to outpace the ARB market segment
o Reached 20% segment share in Japan
Source: IMS, weekly March 29, 2002, TRx share in ARB segment
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Dynamic Sales Performance of Lotrel(R)
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[GRAPHIC OMITTED]
Q1 sales (US only): CHF 223 m, + 55% in LC
CHF m
1997 134
1998 218
1999 308
2000 552
2001 813
Q1 2002 223
Amlodipine market segment share:
1997 1998 1999 2000 2001 Q1 2002
Lotrel(R) 10.2% 11.5% 13.6% 17.6% 20.6% 22.7%
Norvasc 89.8% 88.5% 86.4% 82.4% 79.4% 77.3%
Source: IMS monthly data and weekly data for Q1 2002
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Lescol(R) - Strong Performance Across All Regions
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o Q1 2002 sales worldwide: CHF 217 m, +31% in LC
o Strong performance in major countries
o US, +39% in LC
o Japan, +12% in LC
o Germany, +114% in LC
o France, +42 in LC
o Italy, +259% in LC
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Glivec(R)/GleevecTM - Strong Roll-Out Continues
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o Sales of CHF 183m worldwide
o Strong launches in Japan and Europe
o Launch of GIST underway
- End February launched in US
- Positive opinion by CPMP in EU in February
- Swiss approval received in April 2002
o 95% of patients alive after 18 months of therapy in treatment of chronic
phase CML refractory to interferon
[Novartis Logo]
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Conversion to Zometa(R)is Accelerating -
Key Markets on Track
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% Zometa(R)of % Zometa(R)of
combined sales(1) combined sales(1)
Launch date (March 2002) (YTD March 2002)
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US Aug 2001 79% 41%
Germany Apr 2001 38% 40%
Italy Feb 2002 29% 13%
France Jan 2002 17% 11%
1 Aredia(R)and Zometa(R)
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Zometa(R) - Building a Potential Blockbuster
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o Solid Q1 Zometa(R) sales of CHF 112 m worldwide
o Launched for bone metastasis in a broad range of tumor types in 14
countries including the US
o EU approval for bone metastasis anticipated mid 2002
o In Phase III clinical trials for Osteoporosis and Paget's Disease. Phase II
clinical data recently published in New England Journal of Medicine
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Elidel(R)- Promising Start
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o Launched in US in March for the treatment of mild to moderate atopic
dermatitis for patients of 2 years and older
o US NRx share already passed Protopic end of March, 3.9% vs 3.2%(1)
o Approved in Denmark on March 18, for patients as young as 3 months
1 IMS, weekly NRx, March 29, 2002
[Novartis Logo]
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Agenda
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o Overview of sales and results
o Pharmaceuticals
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- Key growth drivers
- Outlook
-------
o Group outlook
[Novartis Logo]
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Pharmaceuticals Outlook 2002
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o Sales growth anticipated in the 10% range
o Continued dynamic performance of key growth drivers
o Price decreases mainly in Japan
o More rapid erosion of Aredia(R)sales expected
o Elidel(R) roll-out to continue
o Operating margin expected to be maintained at last year's high level
assuming no unexpected product approvals
[Novartis Logo]
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Agenda
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o Overview of sales and results
o Pharmaceuticals
- Key growth drivers
- Outlook
o Group outlook
-------------
[Novartis Logo]
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Group Outlook 2002
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Growth momentum expected to continue
o Mid- to high-single-digit sales growth driven by Pharmaceuticals
Operating income growth in-line with top-line
o Stable operating margin, assuming no unexpected product approvals
Net financial income difficult to predict, expected to be lower than last year
Net income expected to exceed last year's level, barring unforeseen events
[Novartis Logo]
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Appendix
[Novartis Logo]
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Group Operating Margin 22.9%
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[GRAPHIC OMITTED]
Operating margins in %
Q1/2001 Q1/2002
Pharmaceuticals 27.4 28.1
Generics 12.3 14.2
OTC 9.7 9.5
Animal Health 18.3 16.7
Medical Nutrition 4.8 6.1
Infant & Baby 17.3 18.3
CIBA Vision(1) 1.4 8.9
GROUP 21.4 22.9
1 Excluding exceptional integration costs in 2001 operating margin would have
been 8%
[Novartis Logo]
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First Quarter 2002 Sales Growth Components by Sector
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Volume Price Acq./Div. Currency
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Pharmaceuticals +15% +1% -% -2%
Generics +21% -1% +6% -4%
OTC -5% +1% +1% -2%
Animal Health -1% +3% +6% -3%
Medical Nutrition +2% +1% -% -2%
Infant & Baby +2% +1% -% +1%
CIBA Vision +4% -% -% -3%
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GROUP +11% +1% +1% -3%
[Novartis Logo]
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Pharmaceuticals
Top 20 Products
Sales Performance First Quarter 2002
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Pharmaceuticals Top 20 Products I
First Quarter 2002 Total Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % CHF % LC
Diovan(R)/Co-Diovan(R) 358 601 342 76 80
Sandimmun(R)/Neoral(R) 269 451 468 -4 -1
Cibacen(R)/Lotensin(R) 248 417 298 40 39
of which Lotrel(R) 133 223 143 56 55
Sandostatin(R) 149 250 194 29 30
Lamisil(R)(group)(1) 141 237 291 -19 -16
Voltaren(R)(1) 141 236 260 -9 -3
Lescol(R) 129 217 169 28 31
Aredia(R) 116 194 326 -40 -40
Glivec(R)/GleevecTM 109 183 - - -
Tegreto1(R) 97 162 155 5 8
1 First quarter 2001 restated due to switches to other sectors
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Pharmaceuticals Top 20 Products II
First Quarter 2002 Total Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % CHF % LC
Miacalcic(R) 89 149 172 -13 -13
HRT range(1) 75 125 101 24 25
Leponex(R)/Clozaril(R) 74 124 133 -7 -5
Exelon(R) 72 121 99 22 23
Visudyne(R) 69 115 80 44 47
Zometa(R) 66 112 1 - -
Foradil(R) 64 108 96 13 15
Famvir(R)(2) 61 103 82 26 26
Trileptal(R) 49 82 45 82 82
Femara(R) 41 69 43 60 63
1 Including Clima/Meri range
2 First quarter 2001 restated due to switches to other sectors
[Novartis Logo]
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Pharmaceuticals Top 20 Products I
First Quarter US Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % LC
Diovan(R)/Co-Diovan(R) 188 315 154 102
Sandimmun(R)/Neora1(R) 81 136 125 7
Cibacen(R)/Lotensin(R) 219 368 244 49
of which Lotrel(R) 133 223 143 55
Sandostatin(R) 73 122 82 47
Lamisil(R)(group)(1) 58 97 164 -42
Voltaren(R)(1) 4 6 10 -33
Lescol(R) 63 106 76 39
Aredia(R) 61 102 209 -52
Glivec(R)/GleevecTM 47 79 - -
Tegretol(R) 39 65 55 16
1 First quarter 2001 restated due to switches to other sectors
[Novartis Logo]
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Pharmaceuticals Top 20 Products II
First Quarter US Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % LC
Miacalcic(R) 51 86 106 -19
HRT range(1) 41 68 37 79
Leponex(R)/Clozaril(R) 29 49 56 -14
Exelon(R) 42 71 51 37
Visudyne(R) 43 72 51 40
Zometa(R) 52 88 - -
Foradil(R) 5 9 - -
Famvir(R)(2) 46 78 59 31
Trileptal(R) 35 59 28 105
Femara(R) 15 26 11 138
1 Including Clima/Meri range
2 First quarter 2001 restated due to switches to other sectors
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Pharmaceuticals Top 20 Products I
First Quarter RoW Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % LC
Diovan(R)/Co-Diovan(R) 170 286 188 62
Sandimmun(R)/Neoral(R) 188 315 343 -4
Cibacen(R)/Lotensin(R) 29 49 54 -7
of which Lotrel(R) - - - -
Sandostatin(R) 76 128 112 18
Lamisil(R)(group)(1) 83 140 127 16
Voltaren(R)(1) 137 230 250 -2
Lescol(R) 66 111 93 25
Aredia(R) 55 92 117 -18
Glivec(R)/GleevecTM 62 104 - -
Tegretol(R) 58 97 100 3
1 First quarter 2001 restated due to switches to other sectors
[Novartis Logo]
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Pharmaceuticals Top 20 Products II
First Quarter RoW Sales Growth
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Brands
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Q1 2002 Q1 2001
USD m CHF m CHF m % LC
Miacalcic(R) 38 63 66 -3
HRT range(1) 34 57 64 -6
Leponex(R)/Clozaril(R) 45 75 77 1
Exelon(R) 30 50 48 8
Visudyne(R) 26 43 29 60
Zometa(R) 14 24 1 -
Foradil(R) 59 99 96 6
Famvir(R)(2) 15 25 23 13
Trileptal(R) 14 23 17 44
Femara(R) 26 43 32 37
1 Including Clima/Meri range
2 First quarter 2001 restated due to switches to other sectors
[Novartis Logo]
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Pharmaceuticals
Top 20 Products I
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Brands Market segment
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Diovan(R)/Co-Diovan(R) Hypertension
Sandimmun(R)/Neora1(R) Transpl., RA, Psoriasis
Cibacen(R)/Lotensin(R) Antihypertensives
Sandostatin(R)Lamisil(R) Acromegaly
Lamisil(R) Fungal infections
Voltaren(R) Fungal infections
Lescol(R) Antirheumatics
Aredia(R) Cholesterol reduction
Glivec(R)/GleevecTM Oncology (Bone)
Tegretol(R) Chronic myeloid leukem.
Epilepsy
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Pharmaceuticals
Top 20 Products II
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Brands Market segment
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Miacalcic(R) Osteoporosis
HRT range Hormone replacement
Leponex(R)/Clozaril(R) Schizophrenia
Exelon(R) Alzheimer's disease
Visudyne(R) A form of wet AMD
Zometa(R) Hypercalc. of malignancy
Foradil(R) Asthma, Bronchitis
Famvir(R) Antiviral
Trileptal(R) Epilepsy
Femara(R) Advanced breast cancer
[Novartis Logo]
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Pipeline
[Novartis Logo]
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Strong Pipeline
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2002 2003 2004 2005 2006
Elidel(R)(iii) COX189(ii) ZelnormTM/Zelmac(R) LAF237A(ii) ICL670A(ii) FTY720(ii)
IBS(ii)
Glivec(R)/GleevecTM Certican(R)(ii) Iloperidone(ii) PKC412A(ii) SPP100(1)(ii) NKS104(EU)(ii)
GIST(i)
Diovan(R) CHF(i) Myfortic(R)(ii) Xolair(R)(ii) EP0906A(ii) PTK787A(ii) Femara(R) adj.(i)
Zometa(R) VisudyneTM Japan ZelnormTM/Zelmac(R) PKI166A(ii) OctreoTherTM(ii) COX 189
Bone met. treat.(i) (iii) Funct. dyspepsia(i) New formulations(i)
Ritalin(R) LA(i) Clozaril(R) ZelnormTM/Zelmac(R) Sandostatin(R) LAR(R) Starlix(R) ZelnormTM/Zelmac(R)
INTERSEPT(i) Chr. constipation(i) Diab. retinopathy(i) +metformin(i) GERD(i)
Lotrel(R) 10/20 mg(i) Lotrel(R) 10/40 mg(i) Foradil(R) Exelon(R) TDS(i) Trileptal(R) NP Zometa(R)
MDDPI(i) Neuropathic pain(i) Bone met. prev.(i)
Diovan(R) Lamisil(R) Elidel(R) oral(i)
VALUE/VALIANT(i) Tinea capitis(i)
Elidel(R) ointment(i) VisudyneTM Iloperidone depot(i)
Occult AMD(i)
Zoledronate
Paget's disease(i)
(i) LCM
(ii) NME
(iii) NME roll out
1 Out-licensed to Speedel, call-back option for Novartis
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Novartis AG
Date: April 19, 2002 By: /s/ RAYMUND BREU
-------------------------
Name: Raymund Breu
Title: Chief Financial Officer