Novartis ADR Aktie

Good morning and good afternoon, and welcome to the Novartis Q1 2026 Results Release Conference Call and Live Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Ms. Sloan Simpson, Head of Investor Relations. Please go ahead, madam.

Thank you, Sharon. Good morning and good afternoon, and welcome to everyone to our Q1 2026 conference call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission.

[Operator Instructions] And with that, I will hand across to Vas.

Thank you, Sloan, and thanks, everyone, for joining today's call. So if we go to Slide 4.

As you saw this morning, we delivered a strong start to the year across our priority brands and launches, which is really where our focus is at the moment. These brands and launches are what's going to drive our mid- to long-term growth and where we believe now we have demonstrated that there's strong momentum behind these medicines -- sales for the quarter, you saw that those growth drivers were up 34% in constant currency. Our base business was largely stable, but we did see significant Gx erosions as we've guided to, and Mukul will go through some of the dynamics for that over the course of the rest of the year.

On core opinc, we were down 14%, driven by the sales decline as well as the increased investments in R&D, which we also guided to. When you look at some of the pipeline highlights a number of important highlights, including the continued progress for Rhapsido across a number of indications. Ianalumab received a breakthrough therapy designation and priority review in Sjogren's disease as well as a few other important milestones, which we'll go over the course of the call. Importantly, we're maintaining our full year sales and core operating guidance for the year.

Now moving to the next slide. When you look at those growth drivers in a little bit more detail, that 34% was driven, in particular, by very strong performance we saw in Kisqali, Pluvicto, Kesimpta, Leqvio driven by our strong launch overseas, particularly in China and the continued performance of Scemblix. So I'll look forward to going through now some of the dynamics for each of our key brands over the course of the remaining slides.

Now moving to Slide 6. In quarter 1, Kisqali grew 55%. And as you know, Kisqali now is -- has a lot of momentum, both in early breast cancer and metastatic breast cancer and given our global launches, we're starting to see a pickup of the ex-U.S. markets. So focusing in on the U.S., you can see our NBRx share now in the early breast cancer setting is very strong, 65% plus 2% now versus prior quarter. In addition, in metastatic breast cancer, we have 47% NBRx and 41% TRx. So taken together, we're in a very strong position in metastatic and early breast cancer.

And when we look at that data in more detail, we see that Kisqali has a strong position, not only in the overlapping segment with our competitor in early breast cancer, but also in our unique segment, particularly the node 1 high risk and the node 0 high-risk patients. And going forward, our focus will be very much continuing to expand Kisqali's utilization in those early breast cancer population. Now turning to the ex-U.S. I think one of the markets that we're keenly focused on is our performance in Germany, where we saw outstanding performance in quarter 1. You can see in early breast cancer, our shares are approaching 80% now in Germany.

Overall, we were growing 50% in constant currencies in the first quarter. We have continued metastatic breast cancer leadership across our key markets with 50% NBRx share. And we also see growth accelerating now as we have more EBC launches across a range of markets, 69 countries and we reimbursed now in 40 of those markets. Some of the other markets, we're paying close attention to in the U.K., we have 78% early breast cancer. And we have a strong early start in China where we do have now NRDL listing. So looking ahead, Kisqali is a brand we expect to have continued strong momentum over the course of this year.

So turning to Slide 7. Kesimpta had also a solid quarter, 26% growth ahead of both the MS and B-cell markets. In the U.S., we saw a 21% TRx growth versus prior year. That was 2 points ahead of the market and 1.5 points B-cell class share increase versus prior year. Importantly, when we look at our NBRx market share, both in the overall market, we reached 17% and the B-cell class we reached 28%. So we're gaining share in both our B-cell class competitors as well as the older drugs that still nearly the majority of patients are taking in the U.S.

Overall, we continue to see a significant runway for Kesimpta. I think a lot of that performance in the U.S. is down to strong operational execution. We've gotten much better, I think, at targeting the right patient groups -- the right physician groups as well as owning our messaging around the unique benefits of Kesimpta as a self-administered monthly therapy. So excited about that. We also continue to progress now our every 2-month dose Kesimpta, which we're looking forward to reading out next year.

Now in the ex U.S. setting, 31% constant currency growth, strong growth in Europe. We estimate 1 in 6 MS patients now are in Kesimpta. We see 79% of patients that are coming on to Kesimpta either as naive or first switch in the EU5. We also have continued NBRx leadership at 9 out of 10 major markets. We do find, in general, outside of the U.S., a strong interest in self-administered medicines that can get patients out of the hospital or out of needing ongoing visits for infusion, so very amenable to the Kesimpta's profile. And we see an opportunity for continued expansion with 2/3 of DMT-treated patients continuing to not be on a B-cell therapy in our key markets.

Now moving to Slide 8. Pluvicto continued its strong rollout, particularly driven by the pre-taxane mCRPC setting. We saw strong demand, and we also saw good progress on our ex-U.S. rollout. Starting with the U.S., we saw the U.S. sales grew 76% in the quarter with 70 -- over 70% of that business now coming from the pre-taxane setting, and that's coming from a mix of urologists and community oncologists. Right now, we estimate about over 60% of our NBRxs are coming from the community. And I think that demonstrates we've now successfully made RLT, a medicine that can be prescribed in the community setting for patients who prefer to access care in the community.

Outside of the U.S., we saw 48% growth with NBRx up 92%. This was driven by strong EU uptake, but also, I think, a notable solid start in Japan where we're seeing very strong interest in Pluvicto, so we're excited about that. And the initial stages of a launch as well in China. As a reminder, we have manufacturing sites that are being built and getting up to speed now in Japan and China, which will allow us to serve the Asian market. So diving a little bit deeper to think about some of those growth drivers.

A key element of our story is driving depth in the existing sites and expansion into urology that continues, and I think we're making good progress on that front. And then we also expect the hormone-sensitive approvals in the second half. There, we expect the hormone-sensitive indication to increase the total patient pool available to Pluvicto by 75%, so a substantial expansion and one that I think will enable us to get the next inflection of growth for Pluvicto. You can see here at the bottom of the slide, some of the data on the number of sites, so over 830 sites now prescribing in the U.S., 580 in the ex-U.S. I think that all just gives us confidence that we've been able to make RLT standard that's available now broadly in the communities that we serve and also sets us up well for the future radioligand therapy portfolio over the coming years.

Now moving to Slide 9. Leqvio had a really strong quarter, and that was driven primarily by our performance outside of the U.S. with strong growth in China as well as in Europe and Japan. Now first, let's start with the U.S., where we saw 31% growth in the quarter. We continue to outpace the advanced lipid-lowering market, but I think in the U.S., the next inflection point we would expect is when we get the outcomes data in the first part of next year with -- in the secondary prevention setting, and that will be an important milestone for us.

Now when you think about some of the other data, the highlights we're seeing, we're seeing that we are expanding in the Medicare Part B population, up 11 points versus prior year. That's about 2/3 of our current business. And we also see that our TRxs are consistently up 41% versus prior year. So I think all heading in the right direction, consistent, steady growth across the U.S. in the buy and bill segment.

Outside of the U.S., 106% constant currency growth, that was led by China, the NRDL listing unlocked significant demand. It is early days. So I think we'll have to see how the coming quarters evolve in China to really understand how much of this was a bolus versus a steady demand. But I think the early benchmarks that we're looking at suggests very strong demand in China and something that we're excited about for our future siRNA portfolio.

Now lastly, in terms of evidence base for Leqvio, I mentioned the importance of the outcomes trials. So we also are advancing -- we received an FDA approval for adolescents in 2 specific rare disease indications, and that will be important as well from a long-term pediatric exclusivity standpoint. Leqvio is included in the ACC and AHA guidelines. And I think many of you likely saw that the guidelines highlight aggressive lipid management now even at younger ages for patients. So I think that really points to not just statin use, but adding statin and PCSK9 use wherever possible. So I think that all points to a positive outlook for the medicine.

Now moving to the next slide. Scemblix was up 79%, I think, really outstanding performance for this brand, both in the U.S. and ex-U.S. We see in the U.S. Very strong performance in the frontline setting and outside the U.S., both second, third line and frontline now starting to pick up.

Let's take each of those in sequence. So first in the U.S. now we've reached 31% first-line NBRx share. You can see the steady climb upwards in the graph, so very excited about that. And then hopefully, soon, we'll be consistently the leader in NBRx new to brand scripts in the United States. When you look at the -- we're also a leader across all lines now with 42% share, so I think that also demonstrates the breadth of interest in Scemblix.

Outside of the U.S., we grew 68%. That's driven primarily by our third line leadership, 73% share across our key markets. But we are seeing early line indications now starting -- the indications starting to advance. We're approved in 63 countries. You can see in the chart here that the NBRx share in the first line in Japan, we've already reached 50%. In Germany, we're seeing early traction as well with 11% NBRx in the front line. And of course, for the long-term outlook for the brand, our goal is to make this the standard of care in the frontline setting across all major geographies. And as you can see in the data, we're well on our way to deliver that goal.

Now moving to Slide 11. Now Cosentyx had a broadly stable quarter, and we were impacted by some of the onetime effects that we had in the prior quarter in 2025. So when you net out those effects, we would estimate that our global sales growth was about 2%. In the U.S., we were roughly flat to 1% growth. So I think that indicates that we're stable and I think set up well now as the new indications come online for Cosentyx. And that's going to be very, very important to ultimately achieve our peak sales goal.

So when you look at some of the data, when you look at the hidradenitis suppurativa NBRx naive share, you can see here pretty consistently around 50%. We did see a slight dip in January because of the reverification and the availability of biosimilars, but we see that now climbing back up. So we expect to be stable in that 50% range. Importantly as well, for IV patient share, we see steady growth up to now 14%. And so both of these will continue to be important. We are hoping that the HS market continues to develop not just for Cosentyx, but as we'll address later remibrutinib now will also have a readout later this year in HS.

So we want to see this market expand so the patients who need better therapies are getting them. Outside of the U.S., we were up 3%, that's primarily driven by growth in Europe and emerging markets. We continue to see competitive pressures in China with multiple local NRDL entrants. And so there's a long list of competitors that we have, and we've had very strong share performance in China now over many years, but our goal will be to maintain now share and hopefully can stabilize as well the performance in China over the coming quarters. We continue to advance the new indications. Importantly, the PMR submission happened across geographies, and we expect the FDA approval in the second half. And we also received FDA approval for the pediatric HS indication. We completed EMA submission as well. So all on track on that front.

Now moving to Slide 12. I wanted to just say a few words on our renal portfolio by talking about each of the key brands. So first, let's talk about Fabhalta. Sales were up 103% in quarter 1 with NBRx leadership now, both in PNH and C3G. In PNH at the moment, we're seeing 50% NBRx share as well as important and significant contributions from some of our key ex-U.S. markets. In C3G, 56% NBRx share, and we're now approved in 46 countries. So both of those indications really having solid and consistent performance.

Now importantly, in IgAN, I think we believe our uptake in U.S. patients will continue to build in patients with persistent proteinuria and glomerular inflammation, so here, we're at later line therapy. But I think very important was the 2-year Phase III APPLAUSE IgAN data, which was published in the New England Journal. It showed an impressive slowing in kidney function decline of 49% versus placebo and a reduction in progression to kidney failure by 43%. The FDA has granted us priority review for the traditional approval. So I think that just indicates the strength of the Fabhalta data in IgAN.

For Vanrafia, we see steady U.S. uptake in a very competitive field, I think, as all of you know. That launch is ongoing. We have about 11% NBRx share. We see a significant market expansion opportunity with most patients still on supportive care. As that market grows, we hope that Vanrafia will ultimately benefit as a really effective and safe vascular agent -- endothelin agent. And we do expect traditional FDA approval to drive future growth. You saw in the quarter, we topline the ALIGN data, and we do expect to submit that data to FDA and EMA in the first half. We will present that data in full and while we didn't reach statistical significance, we feel confident that the data is compelling, will allow that full approval to ultimately happen.

Now moving to Slide 13. Now Rhapsido CSU launch off to a strong start in the U.S., and we have the early steps now to begin the rollout as well outside of the U.S. And I think when you look at the profile we're building, pipeline-in-a-pill potential, significant medicine here that could address a range of different dermatology and immunology indications. So starting with the CSU launch, the U.S. uptake, we see 3,000 prescribers to date, across allergists and dermatologists now prescribing the medicine. 6,000 patient starts and we're seeing very positive feedback on the speed of the onset of action. And we estimate an NBRx share now of 24%, which I think is very good in these early phases of launch.

We are having early access wins, but I would say that access will build over the course of the year. So it will take us the full year to get to where we want to ultimately get to from an access standpoint. And that will be important as well because that's what allows us to bridge from 3 drugs to ultimately paid scripts. So that will be a steady uptake over the course of year, not a fast inflection.

And then outside of the U.S., the China commercial launch and the European EC approval that we've received will enable us to hopefully have a solid launch for Rhapsido in the second half of the year. We did also have the positive CIndU readout, primary endpoint in chronic-inducible urticaria. We saw significantly higher rates of complete responses versus placebo across all 3 CIndU types. First time a medicine has delivered that. Well tolerated with a favorable safety profile. We're on track now for the FDA approval in the first subtype of CIndU and FDA submission of the other 2 types in the second half.

Now building on the overall profile for Rhapsido, when you look at the next slide, Slide 14. We did release as well the Phase II results for remibrutinib in food allergy to support a fast-acting oral option for these patients. We also have -- are on track now to initiate the Phase III study. You can see here on the left the data that we read out. The 100-milligram dose provided 86.7% of responders, which I think a very impressive result. Our modeling indicates that the 75-milligram b.i.d. would be the appropriate dose for the patients moving forward. So that's the dose we've taken forward into the Phase III study.

Our focus will be a multi-allergen prevention study. So I think that's really exciting across a broad range of age 12 years all the way up to 65 years. And as I mentioned, anticipate initiation in the second half. This has the potential to address a significant unmet need, 3.5 million high-risk eligible patients across major markets. So very excited to add this to the indication list, hopefully, for Rhapsido.

Then moving to Slide 15. Also in the quarter, we completed the acquisition of Avidity, adding 3 late-stage medicines for neuromuscular disease. And I just wanted to highlight 2 data points from the quarter. We did release the 1-year results for del-zota for DMD exon 44 skipping medicine, which was presented at the Muscular Dystrophy Association to a standing ovation, which I think shows the impact that this medicine could have for these patients.

You can see here the creatine kinase declines, which are remarkable. And you can, I think, really -- experts have opined that is really a revolution with this medicine. We're excited to also build after this a range of additional exon skipping medicines for DMD. We are expecting the submission now in the first half as we work through some of the additional CMC topics to make sure that the file is fully submission-ready.

And then with del-desiran, we had the final results for the Phase I/II study MARINA trial published in the New England Journal. Those are results you all know well. But I think highlight the excellent profile that we've seen with this medicine, and we're on track for the Phase III readout for the HARBOR study in the second half.

Now moving to Slide 16. I did want to say a word on the pipeline readouts for the rest of the year. We have quite a bit happening and we're excited about that. So in the first half, I already mentioned the Rhapsido CIndU positive readout. We did have ianalumab readout in warm autoimmune hemolytic anemia, which did not meet statistical significance, so we won't be taking that forward. But we don't expect that to be a read-through to ITP, where we already have positive second line data, and we'll look forward to the first-line data in the second half.

We also have data in-house now for votoplam, which confirm our approach for the Phase III study based on that data, we feel very comfortable taking the 10-milligram dose now forward into the pivotal Phase III readout. We are, in collaboration with our partner, PTC, now discussing the best next steps for that medicine, including further interactions as well with the FDA, and we'll keep everyone apprised as we continue to progress that medicine forward.

We also are on track as well for the FSHD biomarker cohort readout as well. Our plan would be to ultimately disclose that data after we've had any discussions with FDA to understand better if the data meets the standard for an accelerated approval. We do not have that data in-house yet, but we do expect it over the course of the remainder of the first half. Other important readouts include, of course, the pelacarsen readout, which I'm sure we can discuss. The remibrutinib MS readout, which will have 2 replicate studies. The del-desiran DM1 study, which I also mentioned. And then we've accelerated now the Rhapsido HS program into the second half of this year. That study enrolled extremely quickly.

So very excited because that will give us another -- first oral option for patients with HS. We also have our QCZ484 siRNA for hypertension Phase II data reading out. And then lastly, VHB our ALS-TREM2 antibody reading out as well in the second half.

So with that, I will hand it over to Mukul.

Thank you very much, Vas, and good morning, good afternoon, everyone. I will now take you through our financial results for the first quarter, which, as Vas mentioned, was strong despite significant U.S. generic entries. As always, my comments refer to growth rates in constant currencies, unless otherwise noted.

Slide 18, please. Our Q1 results, as expected, were impacted by U.S. GX erosion with sales down 5% and core opinc down 14%. Worth noting is that we did have a positive gross net in our base from Q1 last year that also had a negative impact on the overall quarterly growth rate. Core margin in Q1 declined 4.1%. This was mainly due to higher R&D investments as well as the impact of generics on the gross margin. These results were fully in line with our internal expectations and how we see 2026 P&L phasing through the year panning out. Most importantly, our growth drivers continue to show very positive growth momentum something that Vas has shared earlier on in the presentation, with growing at 34% in Q1.

Slide 19, please. What's great to see is that our continued focus on free cash flow generation has paid off in Q1. The lower core opinc was compensated by favorable working capital movement and this brought back the free cash flow broadly in line with previous year quarter 1. Our strong cash flow continues to support our reinvestment into our business, including bolt-on M&A as well as gives us the opportunity to return capital to our shareholders through dividends and share buybacks.

Slide 20, please. We remain committed to our balanced shareholder-friendly capital allocation strategy, alongside an increased R&D. In the first quarter, we closed Avidity acquisition, and we also announced 2 early-stage deals to support our oncology and immunology disease franchises. On the other hand, for the return of capital to our shareholders front, we did pay $9.1 billion in dividend in March and April, as previously announced, and in addition, we continue to progress with our up to $10 billion share buyback program. This program still has around $6.1 billion remaining and is targeted to complete end of 2027.

Slide 21. With that, I'll move to the guidance piece. So with our Q1 results, we are now reaffirming our full year 2026 guidance. We continue to expect 2026 to have low single-digit sales growth and low single-digit decline in core operating income. Worth noting is that this is the year we are growing the top line of the company through the largest LOE period that the company has seen. Core net financial expense will be around $1.7 billion and core tax rate would be about 16.5%, and these 2 parameters are consistent with our previous estimates.

Slide 22, please. We continue to expect 2026 to be a year of 2 halves, H1 growth will be impacted by a tough previous year base following U.S. generic entries for Entresto, Promacta and Tasigna mid-last year. And with that, in the base, we had guided H1 sales to decline low single digit and core operating to decline low double digits. With our Q1 results now in the bag, we are on track to meet that guidance with Q2 sales expected to decline low single digits and core opinc expected to decline high single digit to low double digit.

In half 2, the impact of the U.S. generic entries and the base will start to minimize and this will allow strong growth of our priority brands and launches to show through the overall P&L. And hence, we continue to expect H2 sales growth of mid-single digit and core opinc growth of mid- to high single digits. And that brings us to our full year guidance.

Next slide, please. If exchange rates remain at late April levels, we expect positive plus 2% impact on full year sales and positive 1% on full year core operating income. As a reminder, updated exchange rate assumptions are published monthly on our website.

And that concludes my remarks, and I'll hand it back to Vas.

Great. Thank you, Mukul, and welcome as well, Mukul, for his first quarter here as CFO is off to a tremendous start. So overall, we've delivered a strong start in 2026 across our priority brands and launches, and we remain fully confident with our mid- to long-term growth outlook. We continue to advance our pipeline, completed the Avidity acquisition and are well set up for multiple readouts in the second half. We remain on track to deliver our full year guidance. And we'll also look forward to those readouts, which could enable us to raise our mid- to long-term growth outlook.

So with that, we can open the line for questions here.

[Operator Instructions] We will now go to our first question, and the first question today comes from the line of Peter Verdult from BNP Paribas.

Pete Verdult, BNP. Just one question, just a deep dive, please, Vas, on HS. Could you perhaps -- you talked about NBRx during the presentation, but could you talk about current volume price dynamics for Cosentyx in HS, the target clinical profile for Rhapsido in HS? And how, if the data is positive, you would intend to position both assets in the market?

Yes, Peter, absolutely. So overall, with Cosentyx, we've had stable, I'd say, gross to net across our indication suite this year. So I think we've been able to manage things pretty well. So overall, with -- this is primarily -- we saw very solid volume growth in the quarter with HS, more of the headwinds than we saw were with some of the older indications. But nothing notable in terms of increased gross to nets for Cosentyx in the quarter.

And when you think about remibrutinib, the Phase II data indicated, I think, impressive -- early but impressive results in disease management. I think we'll ultimately have to see how the Phase III results play out. But the ambition would be to play as we have with remibrutinib in CSU and plan to do in CIndU is to hopefully have an oral option that could be placed ahead of biologics. And so clearly, adding 2 medicines would be helpful. We would have the oral option and ultimately, the biologic option as well. But I think this is really dependent on the data set. This is a heterogeneous population, and we're going to have to see how the data looks before we can fully define the positioning.

Your next question comes from the line of Sachin Jain from Bank of America.

I actually have a follow-on to the prior question on HS, if I may. So you sort of commented that, but what's your target efficacy profile relative to existing biologics, just given the Phase II was hard to interpret with the inverse dose response and very placebo adjusted rates. And then in your mind, is HS or MS likely a bigger indication?

Yes. I mean I think I don't know if I have the details, Sachin, we may have to follow up with you on our expectations on the Phase III study design in HS. But I would still say it's all really going to depend in terms of your second part of your question, the overall data profile that we see. I think clearly, if remi in MS proves itself both in relapse rate and disability progression to be better than the anti-CD20s, then, of course, the opportunity here is massive. I think if it's in line or ultimately a little bit worse, then I think HS could be a similarly sized indication.

I mean we know the HS market is growing. We've guided it to be a $5 billion market growing. But certainly, the patient potential is there to be much larger. And it might be that a safe and effective oral option would be really attractive. So I think it's really going to be dependent on that MS readout to understand the size of the MS opportunity. But I think it's exciting that we have 2 shots on goal with 2 -- with remi to add to what's 2 already very compelling indications that we have going forward. But we'll get back to you on your question on HS.

Your next question comes from the line of Richard Vosser from JPMorgan.

A question about China. You referenced competition for Cosentyx, but we also saw much lower growth in general in China across Q1 despite the strong start for Leqvio. So should we expect more slower international growth for Entresto, Cosentyx going forward? And slower overall China development? Or can Leqvio continue to post drag China growth to double digits? And I have one quick linked question on Leqvio. How much of the peak do you think can come from China given the strong start?

Yes. Thanks, Richard. So overall, the dynamics in China, we've seen a stabilization in the early part of this year. I don't think we're back to the pre-2025 growth levels, but we do see a stabilization overall in the market as well in our key segments. And so we feel confident that our China business can be in that high single-digit to low double-digit growth range. So that's been positive overall. I think -- but there's no question it won't get back to the really high growth rates we saw a few years ago. We also see a higher number of competitors entering in, in each segment as well, which is something we have to just be ready for when we do launch in China.

Nonetheless, very large market, highly attractive. And I think you've seen the strong performance that we've had. I think for Leqvio, we have guided that Entresto can be a $1 billion medicine across its indications. And certainly, we have the aspiration to make Leqvio as big or bigger than Entresto over time. It's early days. I think understanding the trajectory of how we get there. But I would say we see very solid demand for the medicine. And I think if we could make it in the range of Entresto, that would be a success.

Your next question comes from the line of Simon Baker from Rothschild.

I will stick to one. Taking up on your offer, Vas, could you give us your updated levels of confidence on the timing and outcome of the pelacarsen HORIZON study?

Yes, Simon. So I don't think I have anything new to add, unfortunately, because we don't have any new information. But I think we, of course, continue to make sure that the study is on track. No change in our expected readout. We do expect a readout in the early part of the second half of the year. So no change with respect to that. I think if we get a positive result overall, that regardless of the relative risk reduction, we'll find a way to ultimately launch the medicine. I think what we'll be really looking for is, are there either the 90-milligram prespecified subgroup or other subgroups where we can really demonstrate a significant benefit for patients, that I think will help with the uptake. But we have no insight yet as to what that would be. We've modeled it extensively.

We continue to believe that we've done the right study and are fully powered for a 20% relative risk reduction in the 70-milligram per DL and higher patient population and a 25% relative risk reduction in the 90-milligram per DL patient population. As a reminder, the median level in the study is 108. So we definitely have enrolled the right patient group. And so we'll ultimately have to see. I think some of the other dynamics that will be important is cardiovascular versus stroke and how those different elements contribute to the primary outcome. We do have a MACE-4 endpoint here, so we do include stroke. And I think some of the recent literature would suggest stroke is going to be an important element of the story for Lp(a). So we'll see how that unfolds. So exciting, but we'll also have to see.

I do want to highlight as well that as I've articulated in the past, this will be a slow building market simply because we need the testing rates to get much higher. So this will be -- assuming it all plays out as we hope, multiple iterations, but our DII-235 is ready to go into Phase III studies, which could be a once yearly Lp(a) injection. So we're quite excited about that as well to be ready. Lastly, I would note that ACC and AHA have now added that everybody in the United States should receive an Lp(a) test once in their life. And that's an important milestone to hopefully get testing rates up and to start to build the market over time. So thanks for your question.

Your next question comes from the line of Matthew Weston from UBS.

My question is about Rhapsido. Vas, now that we're heading to EU approval, Rhapsido is going to be one of the first pricing discussions for a multibillion dollar product since MFN. So assuming that you've had some early discussions with European governments, are you seeing countries inclined to pay higher prices for innovation in Europe?

Yes. Thanks, Matthew. So first, it's important to note, Rhapsido only has an MFN impact for Medicaid because the approval happened before the signing of our MFN agreement. Our first launch that will have, I think, clear MFN-related implications across all segments in the U.S. would be ianalumab. So I think that's just one clarification. Nonetheless, I'll still answer the question in terms of the ongoing discussions with governments. We are engaging with governments across Europe as well as in Japan to hopefully get to a better place. I think we're not seeing the progress that we had hoped to see at the pace that we had hoped to see. So I think there has to be some urgency here because I do expect across the industry, there will be difficult decisions companies will have to take in terms of how they launch or ultimately progress medicines.

We're already in a situation where depending on how you look, 30% to 40% of medicines in Europe -- available in the U.S. don't ultimately come to Europe. You could have that number grow. In general, significant delays for introduction of medicines into the European Union. So there's a lot of work to do. We certainly have, I think, proposals to all the key governments and most important in my mind are Japan and Germany, but we haven't seen the progress that we need to see. So this is something we'll have to continue to advocate for over the next year because I think it's really a 2027 story where you start to see the impact of MFN on launches in Europe.

Your next question comes from the line of James Gordon from Barclays.

James Gordon from Barclays. The question is on hormonal breast cancer. So Roche look set to have giredestrant U.S. approval for adjuvant hormone breast cancer well before the year-end because they've used a PRV. And they're suggesting this could be an $11 billion-plus product across adjuvant and second line, but mostly in adjuvant. So -- and that seems to assume big broad uptake. I think the logic is that, that could be used instead of someone using an aromatase and CDK4 for some of the patients. So based on what you know about hormonal breast cancer, do you think that's plausible? Do you think even from the end of this year, you could see some pressure on CDK4 use because people instead would just do a SERD. So any thoughts on that, please?

Yes. We don't see that in the same way. I mean what we expect -- continue to expect is that physicians will want to use something to ultimately impact the hormonal access and then separately the cell -- cyclin-dependent kinase access, especially for patients that we're talking about here, which are patients that are node 0, node 1, node 2 or more and have other risk factors that indicate they have a higher risk of recurrence of breast cancer. So that's point one. That's all of our market research suggests that. And I think part of the reason the major oral SERD companies are partnering with us to do combination studies is they ultimately see it in a similar way as well. I can't comment on patients who are very early or less high-risk early breast cancer patients. We used to call them kind of Stage 1.

I think that would be a separate topic that you can talk to our competitor about, but that's not something that we see. I would also say that it is not a straightforward thing to replace established therapies like aromatase inhibitors that have been used for decades. So I think this is something that will take time. I think when you look at the data in almost any class of drug, when you're trying to replace a very established therapy, it requires a lot of education and a lot of work and that ramp will come up over time. So we don't view this as having an impact on the Kisqali outlook, particularly now that in the first-line setting, it seems clear that CDK4/6 will remain the standard of care for the remainder of Kisqali's life cycle.

Our focus very much is on CDK2, CDK2/4, CDK4 to make sure that we can life cycle. Kisqali, you saw us bring in Pikavation, which we think has the opportunity to be a pan-mutant PIK3CA that has the ability to avoid some of the toxicity profiles that we've seen with hyperglycemia and off-target toxicities. So that could be an exciting medicine that hopefully might be able to be used broadly in the approximately 50% of patients who have those mutations over time and then developing the combination drug studies, which we continue to do with the oral SERD companies.

Your next question comes from the line of Michael Leuchten from Jefferies.

Vas, question for you on Avidity. So Dyne Therapeutics presented the ACHIEVE data recently with a splicing correction at month 3 to 11 at a higher rate than we've seen with del-desiran. And they also showed positive trends in MDHI, I think we haven't seen any data for del-desiran. Can you elaborate on how this data fits with your decision to pursue Avidity as opposed to other assets?

Yes, absolutely. No, I think, obviously, the way biomarker data, splicing correction data ultimately correlates with function is to be determined. And I think this is obviously a complex topic given that the target here is in the nucleus. And so it's definitely something where you're going to have different profiles for the different drugs given that we're comparing here an siRNA versus an ASO versus other technologies that are being deployed. When we look at the data set that ultimately was published in the New England Journal of Medicine, very clear that you saw compelling data with the hand opening time. We saw functional endpoints going in the right direction. And so we saw everything the way we would expect it.

And we have the opportunity here with a fully enrolled, fully powered Phase III study that's going to read out well ahead of the competition. And I think once that happens, we would make it harder for accelerated approvals to ultimately happen in the field as historical precedents have shown. So I think being first to market with a key -- first-to-market medicine with a key -- with a compelling profile is going to be very attractive. And then I would also say that with the Avidity acquisition, we have not only DM1, but we also have the opportunity to be the first medicine even if we need to complete the Phase III study in FSHD. So we'd be first-to-market DM1, first-to-market FSHD. And now we're increasingly excited as well about the opportunity we're seeing in the pipeline to address more forms of DMD as well as apply the technology of Antibody Oligonucleotide whether siRNAs or ASOs to our own internal pipeline. So taken together, we think that was the right decision and everything that we've seen since completing the acquisition continues to confirm that.

Your next question comes from the line of Graham Parry from Citigroup.

So on remibrutinib in MS, you've now had 3 trials readout with Aubagio control arm, giving a pretty good view on the annualized relapse rate in that population. So to what extent can you compare that data to your blinded data in the remibrutinib Phase III relapsing MS trials? And to the extent that you can comment, does that give you any increased confidence in the ability to meet the endpoint? And also, could you just reconfirm that at this stage, you're not seeing any drug-induced liver injury or high elevations of ALT in the blinded data?

Yes. Thanks, Sam. So I don't have any comment on the ARR data. I'm not up to speed on any blinded views that we have or have not taken on the ARR data. But we do track the blinded safety data quite carefully. And I think all of the data that we've looked at and that I've also seen indicates that we don't see any contribution if we assume that the historical rates that we've seen with teriflunomide in historical studies for liver -- drug-induced liver injury, enzyme elevations, et cetera, there is no contribution from the remibrutinib arm because all we see in the blinded data would be consistent with what one would see from having teriflunomide in the study.

So that gives us a high degree of confidence given that all these patients have now are well past 3 months where normally you would see any liver injury showed up. So it gives us a high degree of confidence in the safety profile for remibrutinib is clean and consistent with what we've seen in CSU, in CIndU, in the Phase II HS study, in the Phase II food allergy study. So now we have a pretty large portfolio of studies that have indicated the clean profile of remibrutinib. But no insights so far on ARR, and I think we'll obviously read out the studies this summer, and we'll see where we are.

Your next question comes from the line of Thibault Boutherin from Morgan Stanley.

So my question is just on Rhapsido. The previous communication was that we should see limited sales in Q4 last year, Q1 this year because of the free scripts before we see a step-up in Q2. And actually, we saw quite decent sales in the first 2 quarters. So I guess question is how much stocking have we seen so far? And should we still expect a step-up in Q2 as we bridge to paid scripts? And in general, if you could help us with the dynamic in terms of bridge for the rest of the year?

Yes, absolutely. I would say, first on stocking, we've seen stocking levels that are in line with what we've seen historically for brands. So I don't think there's a significant -- anything that's out of what we would expect from a stocking perspective. I think when you look at the early data, as I mentioned, 6,000 patient starts, 3,000 prescribers, about 1/4 of the top CSU physicians prescribing the medicine. So that's all, I think, in the right direction. We think that the early script data probably has to be interpreted carefully because we are using sampling and bridge programs. And as payer coverage expands, we will start to see the conversion from free to paid, but that's going to be a stepwise process over the course of the year. We have some early access wins, ESI, Cigna, Optum, and we have been able to secure first-line post antihistamine coverage across those commercial plans.

So I think overall, that gives us confidence. But I would expect it to be a steady increase in these initial months, not a hockey stick simply because it does take time to get all of that in place and then ultimately start bridging patients. We would expect then to see an acceleration in 2027 as we then have the payer coverage in place and then we're well suited to have a significant launch. It doesn't change our long-term outlook. As we've guided, we think this can be a very large medicine in CSU alone. And then when you add CIndU on top and then hopefully, MS, hopefully, HS and then down the line additional indications, food allergy, et cetera, we have a really exciting path ahead of us for the medicine.

Your next question comes from the line of James Quigley from Goldman Sachs.

I've got one on del-desiran in DM1. So as we're heading into the data, what are you thinking will be a clinically meaningful impact on video hand opening time? And to what extent are the secondary endpoints even more important here in interpreting the data into an overall benefit from a functionality perspective? And then also any comments you have on the recent early data from Sarepta in the same indication. So where do you think del-desiran will be differentiated relative to the emerging competitors?

Yes. So I think we will be in a position to kind of comment on a specific video hand opening time, but we do believe it's a well-understood endpoint. And if we reach statistical significance, we think that would be an important milestone. And all of our physician discussions would suggest that would be sufficient to warrant broad use of the medicine. I think importantly as well, we're going to be looking at additional functional outcomes such as the quantitative muscle testing and patient reported outcomes as well as the 10-meter walk and run test. I think all of that will help us to further characterize the treatment effect. Now when we look at some of the competitor data, I think it's important to note, it's quite early. And as we know in these medicines that ultimately, you need a relatively broad patient group because of the diversity of manifestations of the disease.

So I wouldn't want to overinterpret what we're seeing. Certainly, it's exciting that there are many medicines coming forward to treat DM1 patients. But we feel like because of the large data set that we have now, over 100 patients treated across multiple disease states, 500 infusions, up to 4 years of multi-infusion -- multiyear exposure. That gives us a longitudinal data set that can really help us interpret the impact we're seeing. And I think most important for us is the muscle manifestations. I know there's been a lot of discussion as well about CNS. But I think in this particular disease, what really matters is muscle mobility and managing those muscle-related manifestations and that's very much our focus. So having, I think, 54-week follow-up, long-term data on a large cohort of patients gives you a very robust read. And I think we feel confident that based on everything we've seen in the Phase II study that we're set up well as well as we can be towards that Phase III readout.

Your next question comes from the line of Florent Cespedes from ODDO BHF.

Florent Cespedes from ODDO BHF. A big picture question for Vas. On your last slide, you highlighted that there will be multiple readouts in H2 that can raise your midterm to long-term growth outlook. Maybe, Vas, could you be a little bit more specific and give us a bit more color on from where do you see the potential upside coming from?

Yes. Thanks, Florent. When you look at what we guided to last fall, I mean, our focus was very much on what we had in hand and a probabilized view of our pipeline. And I think when some of these medicines, if they ultimately come forward and we unprobabilize that can lead to significant upsides versus where we are today. I think, obviously, the big readouts, not surprisingly, I think to all of you will certainly be remibrutinib for the 5-year term, remibrutinib in MS, remibrutinib in HS, del-desiran the DM1. We also believe ianalumab in first-line ITP can be $1 billion-plus indication. I think pelacarsen will be significant. I think it will take longer to build over time. And I think overall, the combination of pelacarsen plus DII-235 will give us a very significant opportunity.

But in that kind of 5-year term, I think that medicine will take time to build up. But I think those are the medicines where if we see some wins, it could allow us to -- once we do the modeling to reevaluate the 5% to 6% growth out to 2030 and hopefully drive additional upside. So I think that's a great story. And I would say also in 2027, we have a number of readouts, important readouts as well, abelacimab in stroke prevention. We will have as well the IL -- no, we'll have as well the Kesimpta data as well as some other Phase II readouts as well as starting to read out as well our immune reset portfolio. So I think a number of readouts coming that could further bolster the long-term outlook of the company.

Your next question comes from the line of Kerry Holford from Berenberg.

A question for me on Pluvicto, please. So following the recent European filing withdrawal in that pre-taxane setting, just keen to hear whether you plan to run any additional trials to address the EMA requirements? And if not, does the lack of pre-taxane approval in that region have any impact on your peak sales forecast for that drug?

Yes. Thanks, Kerry. So no impact on the peak sales forecast. We continue to expect $5 billion plus. We had assumed all along that navigating the European feedback on the comparator arm would be a challenge. We evaluated multiple ways to try to address it, and we tried to make the best arguments that we could. But ultimately, we thought it was prudent at that point to withdraw. We do see continued strong uptake in the VISION population in Europe. It's important to note as well in Japan and in China, we are able to both have the PSMAfore and PSMA VISION populations, which are critical long-term markets.

And the next step now for Europe will be the hormone-sensitive setting, where we -- because Pluvicto is used in combination with an ARPI versus an ARPI. There the comparator arm is what EMA would want and I think would allow us then if we're to move forward now, we have the strong, as you know, our PFS data. We're waiting on the OS data. Once we have that OS data, we should be able to file in Europe and then expand the patient population there. So I think that was the best outcome we decided rather than running additional studies that would take many years to just withdraw the file and wait for the HSPC readout.

Your next question today comes from the line of Steve Scala from TD Securities.

Some of your competitors are becoming increasingly vocal about extending big LOEs at the end of the decade. Novartis is the notable exception. It could be attributed to nothing more than communication practices. But if Novartis feels it has a good shot at delaying Cosentyx LOE then why not note that? And if this is an area of active pursuit, what is it that you're doing, co-formulation, extended dosing? And related to all this, if Karen Hale is in the room, can she compare and contrast the store experience at AbbVie?

Yes. Thanks, Steve. So Karen Hale is in the room, but I'll spare her from having to compare her thoughts with AbbVie. I think that would be not the appropriate setting to do that, but we appreciate the question. I mean, of course, we have extensive efforts to defend our IP and then look at other ways to formulate our medicines. I mean a good example is the Kesimpta 2 months, which we do have now planned readout. We have additional efforts as well to life cycle manage Kesimpta into longer intervals as well, which are still in the early phases of efforts. We'll see how that progresses. All of that would generate new IP. I think -- and so that one is clear.

I think with Cosentyx, we have a number of cell line formulation and other patents that we continue to prosecute. We, as a practice, don't add those in as potential scenarios until we've gotten further along, I think, in the litigation phase to really understand where those trials ultimately fit. So I think with Cosentyx, with Kesimpta, many efforts. I think we've discussed extensively with Kisqali, the efforts around CDK2, CDK2/4, the Pikavation efforts as well. Harder with a small molecule, as you know, to come up with significant reformulation efforts, but something that we're certainly looking at.

I would point out, even for medicines like Scemblix, we're actively already working on ways to hopefully extend that franchise even further. You know with Leqvio, we moved from 6 months also to now go up to 12 months and also to look at combinations of Leqvio to target other siRNA targets within cardiovascular disease, things like HMG-CoA reductase amongst others. So I think we have quite a broad effort to always think about this. But we don't want to overpromise at this stage, sitting here in 2026, what may or may not happen 5 years from now. But rest assured, those efforts are ongoing. And as soon as we have something that we think is credible to put forward, we certainly will let the markets know.

Your next question today comes from the line of Naresh Chouhan from Intrinsic Health.

Just one, please, on Cosentyx. As we think about the margin impact of the Cosentyx LOE, is it fair to assume that you've already started optimizing the profitability of Cosentyx as would be typical ahead of any other LOE?

Thanks, Naresh. I'll give that Mukul.

Yes. Naresh, thanks for the question. Yes, absolutely, I would confirm that. I think as we have previously indicated, I think we are -- we projected an LOE in the U.S. for Cosentyx in 2029. There is also an IRA event in 2028 that we have factored into our numbers. And this is all baked into our back to 40% latest by 2029 guidance on the margin.

Your next question comes from the line of Seamus Fernandez from Guggenheim Securities.

This is Zach Dunn on behalf of Seamus Fernandez. We're encouraged by the advancement of your IL-15, the GIA632 into vitiligo. Can you share your thoughts on how you think about the market size of biologic eligible vitiligo patients? And if you don't mind, tying that into your thoughts on atopic dermatitis and the market opportunity there?

Yes. Thanks. I mean the IL-15 is something we did mention at the Meet the Management, and we are quite excited by the profile of this medicine. For those of you who are not aware, this is a medicine that we in-license. It's overexpressed in patients with atopic dermatitis, but we also see the opportunity to address a number of other diseases over time, including vitiligo. And so it's early days. I mean these Phase II studies are ongoing. The Phase IIa study in atopic dermatitis is now recruiting. The vitiligo study is set to begin.

Obviously, if we can show meaningful improvements over the standard of care in atopic dermatitis or can obviously become a standard of care in vitiligo, these would be very large indications. I wouldn't be in a position to give you precise numbers, but obviously, very large market opportunities. And we are actively looking at moving that IL-15 across multiple other immunology indications over time. So I think as we progress, we'll, of course, keep you posted. And maybe I'll also note in atopic dermatitis, we also have the GHC program, which also IL-13, IL-18, which we're also on track.

[Operator Instructions] The next question comes from the line of Matthew Weston from UBS.

It's a quick follow-up about my first question about Rhapsido and ex-U.S. And I was intrigued by your comment around you coming in for U.S. approval before MFN. Just thinking about the CNS indication, which I think you've said previously is going to have a separate brand name, but obviously the same active ingredient at a different dose. Does that mean it would also be excluded from MFN considerations because of the original approval or is that something that we'd have to think of in MS?

Yes. So our current assumption, Matthew, it's a very good question. Our current assumption -- working assumption is that this is based on the chemical compound in question. So all -- because remibrutinib has an approval that even with different brand names that all of the subsequent remibrutinib indications would be susceptible to the Medicaid element of the MFN story, but not the overall MFN across all segments of U.S. reimbursement environment. I would say that is our current working assumption. And if that changes, we'll let you know. But our current expectation is that would be how remibrutinib would be treated as would be the case for other medicines where -- such as Zolgensma, where we have Itvisma. But while the dose is changing, of course, the underlying gene therapy is the same. So that is our assumption for all of those medicines.

Your next question comes from the line of Michael Leuchten from Jefferies.

Question for Mukul, please. The gross margin is pressured by negative mix effect. Obviously, that is partly driven by the generic erosions and partly by the new products having payaways. Is there a scale factor in here that we should take into consideration as we think about the first half, second half of the year or is the gross margin just plain and simple mix driven?

Yes. So I think there is -- as you rightly said, I think there's 2 things at play here. If we look at Q1, the overall decrease in the margin is 4.1%, 3 percentage points of that comes from R&D spend and 1 percentage point comes from the GX impact on gross margin. Now GX impact on gross margin, pretty much, I think if we take 2025 as a base, pretty much H2 base is what we should -- what you guys should model going into this year and that should be the base. And as far as R&D spend is concerned, I think we have to take into account not just the Avidity deal that we did, but we also did 3 other pretty significant deals in Tourmaline, Anthos as well as Regulus. And I think they were -- they all came into the P&L from Q2 onwards. So in Q1, all of these 3 deals plus 1 month of Avidity is incremental. And going forward, I think part of it is already in the base. So the incremental R&D spend would start to run on our P&L.

Your next question comes from the line of Thibault Boutherin from Morgan Stanley.

Just a question on your comments on votoplam and the potential discussion with the FDA on the Phase II. We had the Phase II data some time ago. Have you seen anything new in the full data open-label extension that makes you more confident on the potential for the FDA to accept a path for fast-track approval?

Yes. I think, as I said, we feel like the results that we've seen confirm our planned design in Phase III and also confirm that the 10-milligram dose is the right dose to take forward. I think at this point, we're still in discussions with our partner company on the right approach with PTC on the right approach with any further engagement with FDA. And I think as soon as we have clarity on that, we'll, of course, and have those discussions with FDA, we can keep the market updated. But I think no further comment until those discussions are complete.

Your next question comes from the line of Graham Parry from Citigroup.

Just on Cosentyx, actually, it would be useful if you could qualify the gross to net adjustments, both in the base year and this year, the quarter. And previously, you talked about U.S. growing mid-single-digit growth over the midterm to an $8 billion peak on that asset. Just that was absent from the release and slides today. I just wonder if that still stands.

Yes. So on the gross net and adjustments for Cosentyx from quarter 1 last year.

Yes. So I think if we exclude the gross to net impact on Cosentyx, Cosentyx moves into a positive growth territory for the U.S. I think to be exact, around 1% -- 0% to 1%, closer to 1% for the quarter. We have to think of -- and then I think if you think of an overall basis, we spoke -- we have 2 percentage points in our base for gross to net in the U.S. in Q1 2025. I think we also have a positive impact this year. The net comes to about 1% on our overall P&L.

And then I think, Graham, when you look going forward, yes, we continue to expect to be in this mid-single-digit range globally. And I think that will be a mix of U.S. and ex-U.S. and we're going to have, I think, see how the coming quarters evolve, but that's our current expectation is that we would be in that mid-single-digit range. Clearly, the peak sales for Cosentyx would most likely be in 2027, given the IRA event in 2028 would impact the overall pricing in Medicare, but also into the Medicaid best price in 2028. So all of those dynamics are unfolding alongside the PMR launch and the ongoing launch in IV.

Your next question comes from the line of James Quigley from Goldman Sachs.

So just following up on the remibrutinib food allergy data from the Phase II that are supporting the Phase III trial. So what is it in the modeling that you saw that makes the 75-milligram the most appropriate dose given the data we've seen for the 100 milligram and the 25 milligram. Is there a bridge between where the efficacy is between the 2? Or would the 75-milligram dose have the same target engagement as 100 milligrams?

That's a great question. So we modeled this really carefully based on the full data set that we have. And we do believe that at 75 milligrams, we do have full target engagement, and we should be able to achieve efficacy that approaches the 100-milligram dose. But -- and so we felt like this was a reasonable approach to take, particularly given that we want to move into the adolescent population and FDA would surely ask us to use the minimum required dose to achieve the efficacy required. So based on all our modeling, we believe we can get the necessary target engagement at 75 milligrams and then deliver the efficacy that you saw in the study, which as you could see, was really very compelling.

We will now take our last question for today. And the last question comes from the line of Steve Scala from TD Securities.

Slide 25 no longer mentions MFN, whereas the same slide in the Q4 deck did. I'm just curious why. I heard your earlier responses to Matthew's questions, but Slide 25 suggests that Novartis is increasingly confident in its ability to deal with MFN. And I'm just wondering what has changed as we start 2026.

Hold on one second, Steve. We're just trying to get Slide 25 up. Okay. So I think no -- no change in our perspective on MFN. I mean we don't -- we've fully factored in MFN into the guidance that we've given, both for this year and the 5-year period. So that's fully factored in. If anything, I think we've gotten even better now in modeling the MFN impact. So we've made clear assumptions on the impact on the existing portfolio of medicines for the Medicaid effect as well as on future launches, a set of assumptions on launch phasing for drugs that have a full MFN effect. And then we'll ultimately, of course, see how this all unfolds.

We also have signed the agreements to allow us to not have an impact from tariffs with the commercial agreement that we've signed with the U.S. government as well as scaling up, as you've seen, our manufacturing plants around the United States to allow us to produce fully in the U.S. for the U.S. such that we wouldn't expect any tariff impact. So all that to say, I guess, at this point, we feel confident enough with MFN that we don't need to mention it anymore. Hence, that's why you're not seeing it on the slides.

I think that is all the questions. So thank you all very, very much for an engaging discussion. I know we have some follow-ups, but we'll get back to you. We appreciate your time as always, and we look forward to keeping you up to date in the months ahead. Have a great day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Dear shareholders, ladies and gentlemen, it is a great pleasure to welcome you for the first time in my role as Chair of the Board of Directors to our Annual General Meeting in Basel's St. Jakobshalle. By fortunate coincidence, this is also our 30th Annual General Meeting, which makes me extremely proud to be part of a jubilee year for Novartis.

As many of you may have seen, we have organized a small history exhibition in the hallway, which you may also visit after the AGM. The exhibition not only sheds light on some of our company's biggest achievements during the past 3 decades, it also reflects the long and successful history of our predecessor companies, Ciba-Geigy and Sandoz, which many of you know very well and may have worked for yourselves. We are proud of this legacy which provides us with a strong foundation on which we are building our future.

Let me now also welcome the attending members of the Board of Directors and of the Executive Committee. Also present in the hall are representatives of our auditor, KPMG AG; the public notary, Ms. Andrea Schmutz; and the independent proxy, Mr. Peter Andreas Zahn. The Annual General Meeting was convened by publication in the Swiss Official Gazette of Commerce No. 24 on February 5, 2026, with a complete list of agenda items announced.

I note that proper and timely notice was given for today's Annual General Meeting. Therefore, resolutions may be passed on all items on the agenda. Unless the law requires otherwise, the General Meeting passes resolutions and elections with the absolute majority of the votes validly represented.

Today's resolutions will be conducted electronically. Before the first vote, we will show a video that explains how to use the voting device. I would like to announce on behalf of the independent proxy, Mr. Zahn, that on Wednesday, March 4, he provided the Board of Directors with aggregated information on the voting instructions received. As Secretary of the meeting, I appoint Ms. Charlotte Pamer. I appoint the following persons as vote counters. Mr. Martin Kesselring, UBS; Ms. Olga Nieto, Citibank; and Ms. Alexandra Skriba, Cantonal Bank of Zurich.

I would also like to inform you that the general meeting will be recorded on audio and video. In addition, there is a live webcast. Shareholders who wish to speak are asked to go to the speakers' desk with the remission ticket to register. The speaking time is limited to 5 minutes.

Now that we are done with the formalities, please allow me and our CEO, Vas Narasimhan, to make a few additional comments on the past financial year and our company.

[Foreign Language]. Ladies and gentlemen. Allow me for the next few minutes to take the opportunity to share my perspective on the strategic trajectory of Novartis. The past 12 months have been very exciting for me as I've been able to gain a deep understanding of the impressive global operations of Novartis. This has included my time in Switzerland and visiting sites globally. After 1 year, I am enthusiastic about Novartis, including our highly talented and motivated associates, our deep research and development capabilities, our competitiveness at commercializing medicines globally and our proven track record of operational excellence.

Today, Novartis enjoys a very strong competitive position. Our transformation from a diversified health care player into a pure-play innovative medicines company was the right strategic decision and one that was executed very effectively. By remaining focused and consistent on our strategy, we are able to dedicate the right focus and resources to breakthrough science. Whether one looks at the work taking place in our research laboratories, the medicines we are developing, the external innovation we have licensed or acquired and our impact in the marketplace, Novartis today is truly redefining what is possible in medicine.

As we gather here to review our 2025 results, the strong achievements of last year provide a validation of our strategy and constitute a solid foundation on which we will continue to build in the future. During a year with considerable headwinds from patent expirations and pricing pressures in some of our key markets, 2025 group sales at constant currencies rose 8%, thanks above all to the strong growth of medicines from our oncology portfolio. In addition, efficiency gains helped core net income at constant currencies improved by 12%. We also substantially evolved our pipeline. While Vas will discuss progress with the pipeline in more detail, we met or exceeded all our objectives in research and development, which allowed us to strengthen our long-term outlook for the rest of the decade. Thanks to our strong operational and financial performance, we're proposing a 5.7% increase in the dividend to CHF 3.7 marking the 29th consecutive year of dividend growth.

Now looking ahead. During the last year, I've often been asked whether I see a need for Novartis to change its strategy. Based on what I have just mentioned, my answer is clear. I am confident we have the right strategy for long-term growth and impact on human health. Going forward, together with my colleagues on the Board of Directors, and working with our CEO, Vas Narasimhan and the Executive Committee, our focus will be to ensure that we continue on a strong trajectory and even at times of significant external uncertainty that the long-term prospects of Novartis continue to strengthen.

I would like to briefly touch on our research and development efforts, which are, of course, central to the strategy of a company like Novartis. In addition to our long-standing focus on chemistry and biotherapeutics, Novartis' decision to invest in 3 advanced technology platforms enabled us to establish an early leadership position across them. While we have already translated the promise of these platforms into medicines, all of them are just at the beginning of their impact potential. Looking at our research programs, I am confident there is tremendous potential to continue to advance our work in each of these areas.

Similarly, we have built deep knowledge and established a strong commercial presence across cardiovascular, renal and metabolic medicines, immunology, neuroscience and oncology. We see continued unmet need and substantial growth potential in all of these areas. While our internal research and development capacity with more than 15,000 scientists and clinicians forms the backbone of our innovation engine. We will also continue to pursue targeted acquisitions and licensing deals. We have embarked on more than 10 licensing deals and have completed several major acquisitions in 2025 alone.

While being disciplined in our capital allocation, the deals have helped us strengthen our pipeline and gain valuable expertise in areas such as RNA-based technologies and innovative monoclonal antibodies to name 2 examples. Our drive to boost medical and scientific progress is essential, especially in today's fast-changing environment.

I would also like to touch on our global footprint. On this slide, you can see whether where we are investing in research and development centers globally. With competition as fierce as ever, the changing international economic landscape as well as rising political tensions, it is necessary to be very disciplined and deliberate in our investment decisions. This is particularly important given the long-term development cycles in our industry, which lasts typically more than 10 years. For this reason, we will continue to prioritize environments where innovation is enabled, valued and rewarded.

One example is our decision to invest approximately $23 billion over 5 years in the United States market into R&D and manufacturing sites, which we announced last year. This decision was driven by the importance of the U.S. market for Novartis on multiple levels. First, the United States is our largest single market and one where we have demonstrated that we can be successful commercially as evidenced by our outstanding results in 2025. As important is the fact that the U.S. continues to recognize and reward innovation. In hubs like Cambridge or San Diego, we find the right ecosystem to continue to discover and develop innovative therapies.

As we have announced our decision to invest in the U.S., this has raised questions about our commitment to Switzerland. Switzerland, and I would like to underline this, is our home, and we are fully committed to our headquarters and to our strategic presence here. Technological progress is [ reach large ] year as the country regularly takes top positions in competitiveness and innovation benchmarks. This makes Switzerland an ideal investment destination, not just for our industry but across the board.

In recent years, we have increased our R&D footprint in Basel with new radioligand and small molecule labs. We are now also in the process of broadening our investment in the development space, and we will expand our local R&D -- RNA production footprint. Additionally, every year, around half of our annual R&D budget is invested in Switzerland. With more than 700 private and public research centers, the Basel region is one of the world's leading pharmaceutical hubs. It has all it takes to expand its role and remain among the world leaders. But as Switzerland is at the forefront of innovation and excels through its infrastructure, we believe there is an opportunity to continue to work on reforms to stay competitive.

We welcome the government's decision to support the development of a national life sciences strategy and hope this will include clear steps in terms of valuing and rewarding pharmaceutical innovation, an area in which Switzerland should do better and which will be increasingly important in the future. With the right strategy in place, I am confident that Switzerland can further strengthen its competitiveness, allowing companies such as Novartis to continue to invest here.

Ladies and gentlemen, beyond our commitment to deliver paradigm shifts in medicine, we are also determined to push the boundaries when it comes to sustainability and social impact. In terms of our environmental efforts, we are making significant progress in reducing our water and plastic waste as well as our greenhouse gas emissions, which is keeping us firmly on track toward our goal of reaching net zero by 2040. We are also determined to accelerate our efforts in the global health space, where we were able to further advance our leading infectious disease portfolio in 2025, most notably in malaria, which Vas will talk about in more detail.

Let me now turn to the Board of Directors. Over the past decade, the Board has worked to consistently improve governance and strengthen its focus. For this reason, and reflecting the changing risk landscape in our industry, the Board will assume direct oversight over risk and conduct periodic reviews of strategic risks. We have, therefore, decided to discontinue our Risk Committee. As our company has become more focused and the Board continues to evolve, we have also decided that the role of Vice Chair and Lead Independent Director will be structured as a combined role, again held by one member. Going forward, this position will be filled by our current Vice Chair, Simon Moroney. I would like to thank Patrice Bula for serving as a leading independent director since March of 2022. Mr. Bula will continue to chair our Governance, Sustainability and Nominations Committee. I would also like to thank my colleague, Daniel Hochstrasser, who has decided not to stand for reelection. Daniel joined Novartis in 2022. Thanks to his legal experience in M&A transactions and industrial and infrastructure projects, he made significant contributions to strengthening Novartis. Thank you, Daniel, for your years of support.

I would also like to welcome Charles Swanton whom we proposed to join the Board of Directors. Charles is a clinician, scientist and medical oncologist who has won broad industry recognition for his pioneering work on cancer evolution and drug resistance, among others. He is currently Group Leader at the Francis Crick Institute and Professor of Cancer Medicine at University College London where he also treats patients. We are very proud that Charles Swanton who cannot be here today and who will present himself with a video message has accepted our offer and will bring his valuable expertise to help Novartis accelerate its efforts in the vital oncology space.

Before I close, let me also reiterate that Novartis will continue to engage very actively with our shareholders. We will maintain the intensive and fruitful discussion we have nurtured in the past. Likewise, we will uphold our collaborative approach that has served as the basis for our success during the past 30 years.

Thank you for your attention. Let me now hand over to our CEO, Vas Narasimhan. Vas, please.

Thank you, Giovanni. [Foreign Language]. Thank you for joining us today for our Annual General Meeting. It's a pleasure to be with you to reflect on our progress and discuss the path ahead. 2025 was another strong year for Novartis. As we continue to deliver on our performance track record, when you look at the last 5 years, net sales have grown 8% on average, and core operating income has grown by 15%. We committed to reaching 40% core margin by 2027 and we have delivered on our goal 2 years ahead of plan. These results reflect the strength of our pure-play innovative medicine strategy and the momentum across the company.

Our performance has clearly translated into strong value creation, delivering 129% in total shareholder return over the past 5 years, well ahead of the Swiss market index. We also remain committed to expanding global access to our medicines, and we reached more than 300 million patients last year. This continued impact shows our ability to deliver both strong shareholder value and broad and meaningful patient impact worldwide.

Now taking a closer look at 2025, our net sales grew 8% in constant currencies. Core operating income grew 14%, reflecting strong top line momentum and continued financial discipline. And as I mentioned earlier, we achieved a 40% core margin. Free cash flow reached $17.6 billion, a historical high for Novartis and an important source of flexibility for strategic investment in launches, pipeline and value-creating deals. Our priority brands grew 35% demonstrating the strength of our in-market portfolio and our strong launch performance. An important example of this is Kisqali, our breast cancer drug, which continued to grow strongly, and is on track towards becoming the largest brand in Novartis' history.

We delivered strong performance across all key geographies with continued momentum in the U.S., China, Japan and Germany, markets we expect will continue to drive our growth in the years to come. We also saw performance across the rest of the world, with Asia, the Middle East, Africa and Latin America delivering solid results.

Our pipeline continued with 29 regulatory approvals and 29 [ submissions ] across therapeutic areas, each representing meaningful progress for patients living with unmet medical needs. We are expanding our reach across more patient populations by moving into the earlier lines of therapy and broadening indications. For example, prostate cancer patients in the U.S. can now receive Pluvicto earlier in their treatment journey before chemotherapy. Rhapsido is now the first oral treatment of its kind for chronic spontaneous urticaria in the United States, and we expect to expand to more indications over the coming years. These advances reflect the quality of our science and the power of our development engine.

We're advancing our innovation strategy by combining internal scientific excellence with targeted external opportunities. Over the past year, we were among the industry's most active player in strategic business development transactions, strengthening our early-stage pipeline and adding focused bolt-ons to take -- to our late-stage portfolio. Taken together, these moves build meaningful replacement power and power our long-term growth profile.

We also importantly made meaningful progress in global health. We launched Coartem Baby in Ghana, the first-ever malaria treatment designed specifically for newborns and young infants, ensuring even the smallest and most vulnerable can finally receive the care they deserve. In addition, the Phase III success of KLU-156, a next-generation antimalarial with the potential to combat resistance and block transmission marks the most significant innovation in malaria since Coartem's launch in 1999.

Building trust with society remains central to our strategy. We continue to advance our 2040 net zero emissions goal with significant progress in 2025. We are proud to lead in priority ESG ratings, including being #1 in the Access to Medicines Index and being a recognized leader in indices such as MSCI and Sustainalytics.

2025 was a strong year for our financial performance, productivity and pipeline execution and it gives us a solid foundation for the future. Now looking ahead, I'll share how we plan to continue that momentum and stay on track to achieve our long-term goals. After the loss of exclusivity of Entresto, Promacta and Tasigna in the U.S. last year, we will face the largest impact from loss of exclusivity in our company's history. And yet with the momentum of our business, we expect to continue to grow. As we shared earlier this year, we expect net sales to grow low single digit in 2026.

This will also be an exciting year for innovation. We expect 28 key submissions or approvals and we are on track to deliver on 9 key study readouts and 6 study initiations, many in diseases with no current treatment. And as Giovanni shared, we will stay disciplined in driving our focused strategy across our 4 core therapeutic areas, powered by the technology platforms that give us a competitive edge.

With this, we are well positioned for the years ahead. We remain confident in our 2025 to 2030 sales guidance of 5% to 6% average annual growth rate and expect our core margin to return to 40% plus by 2029. This confidence is grounded in the strength of our pipeline with 15 or more submission-enabling readouts in the next 2 years and 30 or more potential high-value pipeline assets.

Now when you take it all into account and look at the progress we've made, we've strengthened Novartis, our focus, our science and our execution. Our strategy is delivering. Our pipeline is advancing, and our teams are executing with discipline. We are grateful to the dedication of our people and the trust of our stakeholders as we work to improve and extend lives around the world. As we continue on our journey to become the most valued and trusted medicines company in the world, I'm confident in the future of Novartis and the impact we will continue to have on patients, society and our shareholders. Thank you very much.

Thank you very much, Vas, we have now determined the attendance.

[Interpreted] Ladies and gentlemen, I'm reading to you the attendance at the Ordinary General Assembly of March 6, 2026, are present today. 1,554 shareholders or their representatives and the independent proxy. Together, they represent 1,249,402,658 votes. This is 59.15% of the 2,112,421,867 shares issued. Votes are represented as follows: independent proxy represents 1,238,967,609 votes are represented by shareholders present 10,435,049 votes.

Thank you very much, Ms. Pamer. This brings us to agenda Item 1. Votes on the financial and nonfinancial reporting for the 2025 financial year. Under agenda item 1.1, the Board proposes approval of the operating and financial review of Novartis AG, the financial statements of Novartis AG and the consolidated financial statements for the 2025 financial year. KPMG has audited the annual financial statements of Novartis AG and the consolidated financial statements of the Novartis Group and recommends approving the financial statements. KPMG has nothing to add to its audit reports.

Under agenda item 1.2, the Board proposes endorsement of the report on nonfinancial matters for the 2025 financial year in an advisory vote. KPMG has provided an independent practitioner's limited assurance report on selected sustainability information specified in the report on nonfinancial matters. The annual report and the Novartis report on nonfinancial matters have been available on the Novartis website since their publication. I now open the discussion. There are 6 requests to speak on this agenda item. I invite Mr. Kaufmann to the podium.

[Interpreted] Chairman, members of the Board, shareholders, ladies and gentlemen, my name is Vincent Kaufmann. I am the Director of the Ethos Foundation. We represent more than 250 Swiss pension funds managing the assets of 100,000 people in Switzerland. And when we speak today, we speak on behalf of people who are placing their financial future in the hands of companies like Novartis. Novartis has a very good year behind it. Turnover has grown by -- and profits by 17%. Novartis is top of the access to medicine index. We recognize that performance, and we thank Dr. Narasimhan and team for that.

But just because something is good, doesn't mean that somebody should earn an unlimited amount of money. In 2025, the CEO earned almost CHF 25 million. Let me just illustrate what that actually means for you a little bit. A pensioner in Switzerland gets about CHF 3,500 from their pension fund per month. Dr. Narasimhan would earn that much money in less than 1 hour. He's earning almost 300x the annual median salary in Switzerland.

Now some people will say, okay, that's just the price for a global CEO. But I ask you whether that's really true and where do the limits lie here. Among the 10 largest companies in Switzerland, Dr. Narasimhan's earnings are more than 50% above the average. Many of you will remember the controversy about Daniel Vasella, who received almost CHF 40 million. So we're not there yet. Nevertheless, when Dr. Narasimhan came to the company in 2018 with such a healthy level of earnings, people said, well, the years of unreasonable pay are over. But nevertheless, we've seen his pay go up threefold in the last few years.

So it's not just a matter of fairness. I think it's a risk for the reputation of our company. Now we're not expecting that you should pay low wages. We know that Novartis is an international company. But nevertheless, receiving a total payout of more than 11x base salary and the increases we've seen in the last few years is unreasonable. We think this system is no longer in favor of shareholders. It's only in favor of management. And things need to change here. So we have 4 demands. First of all, variable remuneration should be limited to no more than 5x the base salary. Secondly, the companies that you can pay yourselves against should be primarily Swiss or European. You are after all based in Basel, not New York. Thirdly, a greater proportion of variable compensation should depend on performance. And fourthly, measurable sustainability goals should be part of the consideration for compensation, CO2 emissions and so on.

Until such reforms are implemented, we would call upon you, dear shareholders, to vote no on points 5.1, 5.2 and 5.3 on today's agenda. You are long-term investors. You want Novartis to be successful in the long term and to be able to attract and retain the best talent, but you also want a company that pays fairly, respects its shareholders and sets a good example. And you have the power today with your vote to do something about this. Thank you very much.

Thank you, Mr. Kaufmann. Thanks, first of all, on the positive comments on the performance of the company. And I'd like to address your concerns on compensation. First of all, I would start by saying we do look at a global set of peers because obviously, that is the talent pool with which we compete. That's the group of companies with which we compete when we look at our talent. And it is companies based in Europe, of course, and companies based across the world, including the United States.

When you look at how we set target compensation for our CEO, it is really in between the 25th and the 50th percentile of the global group. So it is really not based on U.S. comparables. It is very much anchored in our -- Novartis being a European company. I think what's most important is what you referenced that our compensation plan is really performance-based. And the most important part of the compensation plan, of course, is the long-term performance plan, which is based on measurable objectives, which include, of course, the financial performance of the company over 3 years, but importantly, also total shareholder returns as a measure of the value that is created for shareholders.

And that payout from the long-term plan is very variable. In fact, during the tenure of our current CEO, it has ranged from 57% to 188%, which reflects a very strong correlation between pay and performance, which we hear from shareholders is very, very important. And of course, it was 188% for 2025 in a year in which shareholder return was 84%, which is really the second highest in our industry globally. So we feel that our compensation strategy is based on measurable metrics. It is performance-based, and we continue to discuss it with all shareholders. We appreciate your comments. We are reassured by the fact that last year, our plan received 87% approval from our shareholders. But thanks for your comments. And now I would like to ask the second speaker, Mr. Kurath, to come to the podium.

[Interpreted] Chairman, ladies and gentlemen, I'm Rolf Kurath, and I'm here on behalf of Actares. We represent private individuals and are committed to a sustainable economy. We'd like to congratulate Novartis on the very good results, the excellent results, not just financial, but also the ESG ratings you are at the top of the chart. So congratulations to all of you. Nevertheless, we still see room for improvement in 3 areas, starting with communication and hiring policy and transparency. In terms of communication first, we expect more respect and less trump, please.

It became very clear to us over the past year that things are simply not like they once were. The change of attitude from the U.S. in the U.S. places considerable challenges before us here in Switzerland. And it's not acceptable that Novartis has jumped straight on board in the new alliance with the Trump administration. Pressure is being placed upon European authorities as a result of this. Let's look at one example. For example, nobody can really present a proper calculation of the way that prices are calculated, for example. Now it may be that people will say that Europe has a stable system. It's able to fund innovation, while the European system is all about high sales costs and transaction costs. And if that's the case and until that is clarified, then we need to see more of substance in your communication and more respect vis-a-vis the Swiss authorities.

Now secondly, I want to address recruitment policy and pay because we're seeing excessive pay as we've just heard, the CEO has earned a sum that's something like 400x that earned by those on the lowest wages. And I don't know how you can justify this. You're talking about reimagining medicine. And I think it's important that the collective performance of the entire workforce be respected rather than having such excessive pay for individuals. We don't know either whether the workforce is -- workforce at Novartis is happy with their working conditions and their compensation.

We'd also like to ask about your plant in Stein. What you're doing there? You've mentioned that you have a social plan, but you haven't published it. And that is not enough from a company of your caliber. We call upon to make sure that nobody is laid off unless they've got a job to go to. You need to look after your workforce and consider the broader society in these difficult times.

Thirdly, I want to talk about transparency. We need better transparency. Actares has noted that major ESG data is missing from the sustainability report. The last report still had data on staff engagement, whereas in the recent report, you only mentioned turnover -- staff turnover rates. And you haven't published anything about staff engagement, in other words, staff satisfaction and so on. And we do expect, please, that you make good on that in the next report.

As to environmental protection now, we expect better data on water usage and waste that we don't have to go searching for such information on your website, but that they are properly included in the report.

I'd like to thank shareholders for coming today and playing their role. And I hope that the members of the Board will take our words of constructive criticism into account. Thank you.

Thank you. Thanks, Mr. Kurath. And first of all, let me start by thanking you for your comments you made on our commitment and results in ESG. You've raised a number of points, and I will try to answer all of them. So the first one on communication. I'm sure you understand that the U.S. market being by far the largest market for Novartis, I think it's important for us to discuss it. It's important for us to be focused on it. And as we do everywhere in the world, to work with local authorities to ensure that the right conditions exist for us to continue to do business there. I think that's true in the U.S. I think that's true everywhere else around the world. And I just want to make sure that our position is clear. We do -- because of the work we do, we do aim for a collaborative approach with governments everywhere, including Switzerland, so that medicines that we develop and bring to patients are valued and rewarded with the right price that reflects their value.

And while you're right that there is complexity in understanding what the net prices of products is globally, it is clear that across Europe and in Switzerland, there is an improvement, which is needed in terms of our ability to have our innovation recognized with the right price. So with respect and a spirit of collaboration, we will continue to work with the Swiss government and other governments around the world to make sure that this situation improves because obviously, we have one objective, which is to bring our medicines to patients that need them wherever they are.

The second point from you was on pay. I've already made comments on that. So I'd like to comment very briefly on Stein and the changes that are happening there. Of course, as I mentioned earlier, we are very committed to continuing to invest in Switzerland. For us, it really is about the most advanced and sophisticated manufacturing. And so we -- in Stein, we are going through a transition in which we plan on continuing to invest in sterile dosage forms, manufacturing and most important in the next generation of cellular therapies. This is very aligned with the strategy of the company. But at the same time, we have decided to actually reduce our investment in some of the current manufacturing operations of Stein. And we don't take it lightly that this has an impact on the workforce. We are working very actively in order to understand how to manage that situation. There are consultations ongoing, and we're very committed to them.

The third point that you made on ESG, you are right that we have evolved our communication and disclosure strategy there. We've issued this year a report on nonfinancial matters, which replaces the Novartis in Society Report. I think this report has the advantage of bringing all of the disclosures in one place. It is consistent with Swiss regulations and with CSRD as it is evolving, and there have been metrics that have been added. Some metrics have been discontinued and many metrics, of course, we continue to follow. And the ones that are not in that report are easily accessible in an ESG data summary, which is easy to access. We'll be able -- we'll be happy to continue to dialogue with you on this, but we definitely are committed to transparency in ESG, which is a critical area for us. And your last point was on employee engagement and satisfaction. And I'd like to ask Vas Narasimhan to comment on that.

Very good. Thank you, Giovanni, and thank you very much for the interest on how our employees perceive the company's treatment. We conduct regular surveys quarterly to understand the engagement in the organization, both globally but also side by side. And these -- this feedback is very positive. Overall, the company ranks amongst the best in the world across sectors and certainly as one of the best, if not the best, in the pharmaceutical sector in how employees feel like the company treats them, the overall environment, the overall engagement. We, of course, have many areas to always look to improve and we'll continue to do so. But I want to reassure our shareholders, we take that matter very seriously, and all indications are our employees are very highly and well engaged. Thank you.

Thank you, Vas. Thank you again. And now I'm asking our next speaker, Ms. Swidler Mag, to come to the podium.

[Interpreted] Thank you very much, ladies and gentlemen. I'm here on behalf of myself and just a small number of shares. So I'm not representing anybody else, but I'm delighted to have heard what Ethos and Actares have had to say, and I entirely endorse that. Also, thank you for the explanations that you just gave us. I'm actually very happy about the restructuring in Stein and your move towards personalized medicine. Let me just sum up the way I see it, perhaps not in such fine language as you just did. But I believe that Novartis absolutely belongs to the avant-garde in this sector. You're leading the way, and I'm very proud of that.

You're much less positive in my view, though, when I see that 500 or so people are going to lose their jobs in Stein. And everybody says it's difficult to find qualified workers at the moment. So you need to be very careful and show that you are well set up for the future that you're not going to just lose these people. We should be able to retrain people that would be very good for our resilience so that we are resilient, we can cope, for example, with supply chain issues that might come up in the future or if we find that know-how expertise is being lost in traditional methods of manufacturing, for example, capsules, tableting and so on. This is important know-how, and it needs to be retained even here in Switzerland and in a company like Novartis to make sure that you are resilient for the future.

So please, may I call upon you to be flexible in the way that you employ your resources, as you say, in your strategy actually, to make sure that you don't lose expertise in traditional methods of manufacturing that you try to retrain your staff wherever you can because you know many of them will do almost anything for you. So I ask you, please don't just lay them off. You could, for example, set up a transfer organization. So thank you very much for your attention there.

Thank you very much for your comments. I've already addressed many of them. I just want to reiterate, there are important considerations that you made and there are good discussions taking place in Stein. We're very conscious of the importance of our decisions. I'd like to ask now the next speaker, Mr. Roveda, to come to the podium.

Good morning to everyone, and thank you for giving me the floor. I have 4 questions. The first one concerns the independent development of AAA. As some of you know, I am a Novartis shareholder and also a shareholder in Novartis subsidiary named AAA, also known as Advanced Accelerator Applications, which was acquired by Novartis in 2018. The acquisition of AAA allowed Novartis to become a world leader in radioligand therapy.

At last year's shareholder meeting, in response to one of my questions on the future of AAA, Mr. Vas Narasimhan surprisingly emphasized that in parallel to Novartis R&D investment and technological acquisition, AAA had invested independently in the development of the radioligand platform since the Novartis acquisition in 2018. Since all publicly available information tended to indicate that to the contrary, the AAA team and manufacturing site have been dedicated to the development, manufacturing and commercialization of Novartis products such as Pluvicto rather than to the development of AAA products. Can you please elaborate on the independent development you referred to last year?

The second question concerned the regularity of Novartis financial statement due to the lack of AAA's consolidated financial statements. For several years, I have raised concerns with Novartis and AAA regarding accounting irregularities without receiving any substantive explanation. It seems that since the 2018 financial year, certain information that are required by law in connection with the financial and economic position of AAA subgroup have been missing in Novartis financial statements. Upon many requests by my side, Novartis has repeatedly maintained that such information are rightfully omitted, relying on some specific waivers provided for by the applicable French law.

Nevertheless, it has recently been brought to my attention after thorough investigation that such waivers are indeed available only upon respect of the specific requirements set forth by the same French law, requirements that in all evidence are not met in the case hereof and that this submission may have implication for the regularity of those financial statements for their certification by the statutory auditors and for the validity of the resolution adopted at the general meetings over the past 8 years.

I'm also concerned about the potential regulatory or criminal exposure that could arise for the group, its directors and its auditors. It seems to me that it is a serious issue as these are Novartis financial statements, which are relied upon by investors on the Swiss and U.S. stock exchange where the shares are listed. The management of Novartis and AAA are well aware of my concern, which I have raised many times and as recently as 2 weeks ago, but I have never received a serious answer to date. Could you please inform all of us here today how you intend to address the situation?

The third question regards the annual report, production section, Page 29. Since the acquisition of the AAA Group in 2018, Novartis has heavily has not exclusively relied on the experience and the expertise of AAA team and the manufacturing site to develop, manufacture and commercialize its leading therapies, Pluvicto and Lutathera. Starting in 2022, Novartis has continuously stated in its successive annual report that it was integrating the AAA manufacturing site into its existing manufacturing and supply structure. I note that this is no longer mentioned in 2025 annual report. I presume this means such integration is over or suspended, I don't know. Can you please elaborate on what exactly this integration has consisted in and what has been the financial impact thereof for Novartis as well as for AAA?

Last question regards the principal subsidiary section, Page F 76 of the annual report. In the 2024 annual report, the Novartis equity interest percentage in AAA S.A., the French parent of the AAA Group, was reported at 99.23%. In all logic, the Novartis equity interest percentage in each of the main wholly owned subsidiary like U.S., Italy, Spain and Switzerland was reported at the same level, 99.23%. I note that 2025 annual report indicates Novartis equity interest percentage in AAA down from 99.23% to 99%, while it surprisingly remains at 99.23% for some subsidiary like U.S., Italy and Spain and has increased to 100% to AAA Switzerland International. Can you please confirm the equity interest percentage shown for AAA SA is a mistake and should read 99.23%? Can you also please elaborate on what has been the consideration paid by Novartis to AAA SA for the 0.77 both in AAA Switzerland in case this one is not another mistake. Thank you.

Thank you, Mr. Roveda. You asked a number of questions. I will ask our CEO, Vas Narasimhan to address your questions. He has good knowledge of the history here.

Yes. Thank you, Giovanni. Thank you, Mr. Roveda. We've appreciated, I think, now the almost 7-plus years of engagement with you as a minority shareholder in AAA. We also note that you have initiated legal proceedings against the Novartis subsidiary in question. As such, we can't comment on any ongoing legal matters with respect to that lawsuit that you have brought forward. I would also note we are prepared to answer your questions as appropriately -- as appropriate when they are raised at the subsidiary's shareholder meeting, which we believe is the appropriate venue for this discussion, not at the Novartis AG General Meeting. We're happy to provide our justification for that in writing. And we'll look forward to engaging you at that venue to do our best to address your concerns. Thank you very much.

Thank you, Vas. Next question from Mr. Nair.

Dear shareholders, Mr. President and members committee. I'm here in a slightly off position. I dedicated my life to educate young talent and to bring them to a state that they can contribute to the health of this country and of the world, working in companies like Novartis. I'm very happy to have heard your commitment to this site, Switzerland. To summarize what I will do now, I heard the message, but I have difficulties to believe you. And I'm sorry that I'm speaking in English, but I think it's important that we understand each other directly.

Your first and probably one of the more important strategic decision was to reduce the production side of Stein by 1/3. And the textbook tells all of us and the experience tells all of us, there is a reduction in production. There is some years later, a reduction in development and a reduction in research following. This is clear textbook knowledge.

You decided to devote quite some time to state your engagement in Switzerland. Thanks a lot. Can you make -- the proof of the pudding is in eating. Can you make reliable, controllable, understandable arguments how you are going to replace all the losses of sales and production, which are the consequence of the decision? And can you, because you have a pipeline, a planning of the pipeline, give us the names of what you are going to produce there because it will be easy for all of us then to understand how deep your engagement in Switzerland is and will be. I am sorry that I'm slightly polemic in what I'm saying, but I'm deeply concerned. And I'm sure or I hope that you can give me back my belief.

Thank you, Mr. Nair. I appreciate your comments. And maybe I can start and Vas, if there's anything to add, please. What I can say is when I look at Novartis today, it is a company that continues to evolve at the pace at which science evolves. Our industry 10, 15 years ago was one where small molecules and biologics were the main technological platforms in the industry. As I mentioned earlier, Novartis has actually been at the forefront of continuing to recognize the technologies of the future and invest in the technologies of the future. Today is all about RNA-based therapies, which are manufactured in Schweizerhalle. It is about cell and gene therapy. And I made a comment earlier about our cellular therapy, new platforms where Stein will play a role.

And what I can tell you is that the technology and the science that underpins the growth of Novartis can continue to evolve, will continue to evolve in the future. And I think with that, as a responsible company, we also continue to adapt our investment strategies. And there are technologies which are less differentiated and maybe less relevant to our future portfolio, and there are new technologies that come. And so I suspect that there will always be an evolution in our manufacturing footprint. And I am confident that actually Switzerland has a lot of the very sophisticated manpower that enables us to continue to have a presence in research, in development here and in some of the most advanced manufacturing technologies. You mentioned a textbook analogy. What I can tell you is that Novartis invests more in R&D every year, not less in R&D every year. And as a company that grows, that's our plan going forward. Vas?

Thank you, Giovanni, and thank you very much for your, I think, passionate defense of why investing in R&D is so important. When you think about Novartis' global investments in R&D, it approaches $11 billion. We're one of the global leaders in our sector, and our sector is one of the leaders in investments in R&D in any sector. And when you look at our footprint, nearly half of our footprint is in Basel for R&D. And that commitment remains absolutely clear. And when you look at some of the very, I think, tangible things we've done, in addition to expanding our internal R&D capacity, we have moved the Friedrich Miescher Institute onto our campus, and that is now more and more integrated into Novartis. So I would really separate, I think, our actions to optimize our manufacturing footprint from our commitment to R&D in Switzerland. That is absolutely clear, and we will continue to invest in R&D for the long run here in this country.

Thank you, Vas. Thank you again. I'd like to speak -- to call our next speaker, Mr. Grob, to the podium.

Chairman, ladies and gentlemen, my name is Grob, and I come from Bern. I've got 5 points I want to raise. I wanted to know how is your income exactly? I have read many different placings in the press. I would like to hear from you. I wait. Mr. CEO, what is your income in fact?

Was that your only question?

No, no. It's one of the questions. The first question.

Okay. I think I've already answered on compensation.

Yes, that's very nice. [Foreign Language].

So maybe if you wouldn't mind asking all the questions that we would answer.

I would want first half the questions.

Okay.

Okay. I continue. So the second question, going -- I guess it will be the first. How do you justify this income? What do you do for this money? What are you really giving to Novartis someone else couldn't give, that's why I want to know [Foreign Language] what are you doing for Novartis that nobody else can? And then I'd like to know the following. Yes. I see an increase in your salary since 2018. I mean it's gone up and up. Well, has it gone up, have anyone else gone up as much as you have? And now we'll come to the state. You're going to have a lot of investment there. You promised it now for 3 years. I have not seen and heard results. What did you build? What did you produce? What did you sell in the U.S.? Did you get help for Mr. Trump or his government? Do you have subsidies from the U.S. government in order to build your factory in the staters. That were my questions for the moment. I'm waiting now for the answers.

Sure. So you asked a number of questions. Let me say on compensation. I think I've already addressed many of your points. Maybe you asked how is the compensation composed? The vast majority of the compensation of senior executives, including the CEO, is variable compensation. And as I mentioned earlier, the long-term performance plan represents the vast majority of the compensation. That is performance driven, and so it changes every year depending on the performance of the company.

With respect to the U.S., I can say, of course, the U.S. is the most important market for Novartis, almost 40% of our revenue comes from the U.S. It is the entire portfolio of Novartis. We have demonstrated the ability to be successful in the U.S. market as you look at the performance last year. And of course, we manufacture already in the U.S. some of the medicines we sell there. And our plan is that over a period of 3 to 5 years, we will be able to manufacture in the U.S., the medicines we sell in the U.S. So that's as much as I can answer your question. So thank you for asking a question about these 2 topics.

So I continue. What are you going -- how are you going to drive prices in the U.S.? Or are you going to decline the prices? And what are the prices of your products in Switzerland. Mr. Trump has asked you to make more difficult, more higher prices in Switzerland? Are you following me, [ Mr. Trump ]?

Thank you. So of course, as you know, the prices of our medicines in any country -- in Europe, it's the case in Switzerland. It's not our decision. It's the result of a negotiation with the government. So for every 1 of our medicines, of course, we will negotiate with -- in this case, the Swiss government, so it's not easy for me to give you an individual answer on the price of each medicine. I think what's important is what I mentioned earlier, our objective that the price of our medicines everywhere, including Switzerland, recognizes their value. So thank you so much for your comments.

One last remark. When you continue with your [indiscernible] in this size, you provoke a new initiative from Mr. [indiscernible] for the next future. Thank you.

Thank you so much. Thanks for your question. The next question comes from Mr. [indiscernible].

Mr. Caforio, I have a difficult decision to take now, and I've never had to take this decision before. Should I stand here and speak in English or in German? I mean maybe we should take a vote on that as well on the languages that we use. Until a few moments ago, I thought I would come up here and speak in English, but now I've changed my mind, actually, and I'm speaking German, because I believe that the majority of us here in the room aren't so comfortable in English.

So I'm going to make my comments here in German. I think it's important as well for the people of Basel for former employees of Novartis. So Chairman, ladies and gentlemen, we've already heard this morning. And it's just as I expected, actually, we heard you talk. We heard from Ethos and Actares, I've listened to what everybody has said. And I mean, it's a bit like a stuck record. We're saying the same thing as in previous years. It's all about the compensation of the management. Ethos, Actares have made their comments or criticized Novartis' compensation policies. Well, let me perhaps, see the other side as well and points out that the Head of SAP in Germany earned EUR 16 million year -- this last year and in fact, nearly EUR 19 million the year before, so actually not much less than the CEO of Novartis. So just to put things in perspective. And I do actually have some positive aspects that I want to raise about Novartis. Others have touched on these as well, actually, the Chairman and the CEO touched on them as well. I want to highlight the strong performance of Novartis' shares over the past weeks and months. It's really been very good, and we're very happy about that. Secondly, we're very happy to see the ongoing increase in dividends that we've been enjoying for some years now. And thirdly, and this is something really particular this year here, I think. We have this internal message from Novartis that there is the one-off payment of a double pension payout coming in February. So pensioners of Novartis received a double monthly payments. And on behalf of my sister, who can't be here today, unfortunately, I'd like to thank you for that. She worked for Geigy, Sando and Novartis during her career. The Novartis pension fund has written to us about this one-off double payment, stating that the pension fund wishes to support pensioners at this current moment. Now of course, the tax authorities will be happy about that as well because the upcoming tax bill will rather bump up the tax bill as well, along with the additional social security payment that people receive in December. Anyway, thank you.

Thank you so much for your comment. Thank you. And I'd like to invite Ms. Gregorio to speak to the podium.

Chairman, Directors, ladies and gentlemen, thank you. I'd like to thank everybody at Novartis for the performance that they've delivered, that delivers the dividend to us. Now of course, Mr. Vasella set quite the example here at Novartis when he took his EUR 40 million. Now not to mention expenses and everything else. Now I once experienced a sell-off of an arm of the company, myself and as employees, of course, we were not asked about that nor were we given very much support. It's normally all the workers, of course, who are laid off first, many of them may have spent half the lives or longer working for Novartis. And in terms of communication, what we experienced was that we would only told then what we'd already read in the paper that morning. And then our managers told us that we needed to come to a meeting today. And then they made their announcement, even though we'd already heard it in the press. So we found ourselves pushed out in that way. And then I hear all these millions that you're earning there while treating others like this. It's simply beyond all proportion. People are losing their jobs while this is going on. I think you should be more conscientious in the way that you treat your staff. I, myself didn't find the redundancy process very pleasant, I was allowed to stay until the end, the end, if you like, although I was one of the younger members of staff. And I said, "Well, I think I can go. I think I can find a new job". And then it was very, very difficult because I had doors slamming in my face on a daily basis. You can imagine how we all felt back then. We didn't know who was next, what was going to happen and what we were going to get paid. Now I'm sure it's correct that those at the top should be correctly paid. But you know this is just totally disproportionate now, what you're earning and then when I see that people who have spent half their lives, toiling away from Novartis are simply being kicked outside like this. Thank you.

Thank you very much for your comments. Of course, we take any comments on fair treatment of our associates very seriously. That's an important priority for the Board.

So are there any other questions from the room before we continue with the program on this agenda item? That's not the case. So we will now play the video explaining how to use the voting device.

Your televoter system has 3 buttons. Green is for, Yes, Yellow is to Abstain and Red is for No. At the beginning of each voting, the 3 buttons will light up briefly and the agenda item as well as the time will be shown on the big screen in front of you -- at the front of the room. You should press the correct button in order to cast your vote, the button will light up to show how you have voted. Now within the time frame, you can change your vote by simply pressing a different button. If you have any questions during the meeting, please go to the help desk on the floor of the auditorium.

Okay. Let's now proceed to the votes. The Board proposes that you approve the operating and financial review of Novartis AG, the financial statements of Novartis AG and the consolidated financial statements for the 2025 financial year, and therefore, recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board.

Next, we will vote on agenda item 1.2. The Board proposes endorsement of the report on nonfinancial matters for the 2025 financial year in an advisory vote and therefore, recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board.

We now move on to agenda item 2. Discharge from liability of the members of the Board of Directors and the Executive Committee. The Board proposes to discharge each of its members and each of the members of the Executive Committee for the 2025 financial year. I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That's not the case. Please note that current and former members of the Board of Directors and the Executive Committee were involved in any way in the management of Novartis in 2025 are not entitled to vote on this matter. The Board proposes that this motion be approved and therefore recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board.

Let us proceed to agenda Item 3. Appropriation of the available earnings of Novartis AG as per balance sheet and declaration of dividends for 2025. The Board proposes payment of a gross dividend of CHF 3.70 per dividend-bearing share. Should this proposal be approved, the dividend will be paid out as from March 12, 2026. I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That is not the case. The Board proposes that this motion be approved and therefore recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you've accepted the proposal of the Board.

We now continue with agenda Item 4. Reduction of share capital. Agenda Item 4 provides for the cancellation of the shares repurchased in 2025 and the corresponding reduction of the share capital. I note that creditors were informed by means of a publication in the Swiss Official Gazette of Commerce on February 4, 2026, and that they may request security by registering their claims. KPMG AG will issue its audit confirmation after the Annual General Meeting. The Board of Directors proposes that the share capital be reduced by CHF 38,025,155.42 from CHF 1,035,086,714.83 to CHF 997,061,559.41 through cancellation of 77,602,358 million own shares repurchased in 2025. The reduction amount will be used to decrease the negative items for own capital shares shown in the shareholders' equity. I open the discussion. There are no questions. No requests to speak on this agenda item. Are there any other comments or questions on this agenda item? This is not the case. The Board of Directors proposes that this motion be approved and therefore recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board of Directors.

Next up is agenda Item 5 votes on compensation for the members of the Board of Directors and the Executive Committee. Under this agenda item, we will vote on the future remuneration of the Board of Directors and the Executive Committee, both in a binding vote as well as on the 2025 compensation report in an advisory vote. Further details on the compensation system can be found in the brochure "compensation votes", which is available on our website. KPMG AG has reviewed the compensation report and has nothing to add to its audit report. I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That is not the case. Let us now vote on the compensation of the Board of Directors. The Board proposes approval of a maximum aggregate amount of compensation for the Board of Directors of CHF 8.240 million, covering the period from the 2026 Annual General Meeting to the 2027 and Annual General Meeting, and therefore, recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board. Next, we will vote on the compensation of the Executive Committee. The Board proposes approval of a maximum aggregate amount of compensation for the Executive Committee of CHF 95 million to be paid, promised or granted during, or in respect of the 2027 financial year, and therefore, recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board.

Let's proceed now to the vote on the 2025 compensation report. The Board proposes endorsement of the 2025 compensation report in an advisory vote and therefore, recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have accepted the proposal of the Board.

We continue with agenda Item 6, reelections of the Board Chair and the members of the Board of Directors, election of 1 new member of the Board of Directors. The Board proposes the reelection of the current members of the Board of Directors except for Daniel Hochstrasser, as well as the election of Charles Swanton as a new member of the Board of Directors, each until the end of the next Annual General Meeting. Let us first turn to the proposal for my reelection as a member and as the Board Chair. For that vote, I would like to hand over to our Vice Chair, Simon Moroney. Please, Simon?

Thank you very much, Giovanni. This is agenda Item 6.1. We have no requests for the floor. [Foreign Language]

[Voting]

[Foreign Language] Congratulations, Giovanni.

Thank you.

And I would like to hand back to our Chairman.

Thank you, Simon. We now continue with the reelections to the Board of Directors. There are no requests to speak on agenda Items 6.2 to 6.11. Are there any comments or questions on agenda Items 6.2 to 6.11? That's not the case. Let us now move on the re-election of the 10 current members of the Board of Directors. You will see each candidate in the order set out in the invitation on the screen, and you have 7 seconds to cast your votes for each candidate. The Board proposes the reelection of all 10 candidates and therefore recommends that you vote yes for each of them.

[Voting]

I note that you have accepted the proposals of the Board.

I would like to congratulate all my colleagues and look forward to continuing to work with them. This brings us to the election of Charles Swanton to the Board of Directors. I have spoken to his biography earlier. I would only like to add that he is independent from Novartis according to the independence criteria set forth by the Board of Directors. Before we proceed to the election process, he would like to address you with a video message.

Dear shareholders, ladies and gentlemen. While I'm unfortunately unable to attend today's Annual General Meeting in Basel in person, I'm delighted to take this opportunity to introduce myself to you via video ahead of my proposed election to the Board of Directors of Novartis. I'm truly honored to be considered for a role at a company that has long stood at the forefront of scientific innovation and patient-focused medicine, especially in my field in the oncology space.

As a clinician scientist and a medical oncologist, my work is centered on understanding the evolutionary nature of cancer and translating fundamental biological insights into new approaches for prevention and treatment. In this context, I have long admired Novartis for its commitment to advancing precision medicine and for its willingness to tackle some of the most complex and challenging diseases through rigorous discovery science. I currently serve as a group leader at the Francis Crick Institute and Professor of Cancer Medicine at University College London, while continuing to care for patients with lung cancer. Thank you for your attention, and I really hope to meet you all in person in Basel soon.

I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That's not the case. The Board proposes the election of Charles Swanton to the Board of Directors and therefore recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have elected Charles Swanton to the Board of Directors. I congratulate him on his election and wish him every success.

We will now consider agenda Item 7, reelections and elections to the Compensation Committee. The Board proposes the reelection of the current members of the Compensation Committee and the election of Elizabeth McNally as a new member of the Compensation Committee, each until the end of the next Annual General Meeting. If Simon Moroney is reelected, the Board intends to reappoint him as Chair of the Compensation Committee. I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on agenda Items 7.1 to 7.5? That's not the case.

Let us move to the elections. You will again see each candidate on the screen and we'll have 7 seconds per candidate to cast your vote. The Board proposes the reelection or election of all 5 candidates and therefore recommends that you vote yes for each of them.

[Voting]

Thank you for your patience while we establish the results.

I note that you have accepted the proposals of the Board. I warmly congratulate all those elected.

We now move on to agenda Item 8, reelection of the auditor. The Board proposes the reelection of KPMG AG as auditor for the financial year starting on January 1, 2026. I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That is not the case. Let us proceed to the vote. The Board proposes that this motion be approved and therefore recommends that you vote yes. Please cast your vote now.

[Voting]

I note that you have reelected KPMG AG.

Our last topic is agenda Item 9, reelection of the independent proxy. The Board proposes the reelection of Mr. Peter Andreas Zahn, attorney at law in Basel, as independent proxy until the end of the next Annual General Meeting.

I open the discussion. There are no requests to speak on this agenda item. Are there any comments or questions on this agenda item? That's not the case. The Board proposes that this motion be approved and therefore recommends that you vote, yes. Please cast your vote now.

[Voting]

I note, that you have reelected Mr. Peter Andreas Zahn.

So before we close, I would like to just say a few words and thank an important member of our Executive Committee at Novartis, Harris Kirsch. Harry, after 23 years with Novartis, 13 years as the Chief Financial Officer of the company, you have overseen tremendous transformation of Novartis and have been intimately involved in the great success of the company. You leave Novartis in a very strong position. And I want to take this opportunity on behalf of the Executive Committee, the Board of Directors and all shareholders to sincerely thank you for your contributions of -- to Novartis and wish you all the best in the next chapter of your life. Thank you, Harry.

Thank you very much.

This brings us to the end of this year's Annual General Meeting. I would like to thank you for the trust you've placed in us through your votes and elections. The next Annual General Meeting is scheduled for Friday, March 5, 2027. I hereby declare today's meeting closed. Thanks to all for your attendance.

Good morning and good afternoon, and welcome to the Novartis Q4 Full Year 2025 Results Release Conference Call and Live Webcast. [Operator Instructions] The conference is being recorded. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends.

With that, I would like to hand over to Ms. Sloan Simpson, Head of Investor Relations. Please go ahead, madam.

Thank you, Sarah. Good morning and good afternoon, everyone, and welcome to our Q4 2025 Earnings Call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements.

Please refer to the company's Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors. The discussion today is not a solicitation of a proxy nor an offer of any kind with respect to the securities of Avidity Biosciences or SpinCo. The parties have filed relevant documents with the U.S. SEC, including a proxy statement for the transactions and a registration statement for the spinoff.

We urge you to read these materials that contain important information when they become available. Before we get started, I also want to remind our analysts to please limit yourselves to one question at a time, and we'll cycle through the queue as needed.

And with that, I will hand over to Vas.

Terrific. Thank you, Sloan, and great to be with everyone today. With me in the room are Harry Kirsch, our Chief Financial Officer; and Mukul Mehta, our Chief Financial Officer, Designate, who will be taking over for Harry in mid-March.

So let's dive into the results. And when we start on Slide 5, Novartis delivered high single-digit growth, as you saw earlier this morning. And importantly, we achieved our 40% core margin goal 2 years ahead of plan. And I think that demonstrates the strong operational performance of the company. On the full year, our sales were up 8%. Core OpInc was up 14%, as I mentioned, the 40.1% core margin, $21.9 billion now on Core OpInc.

I think significant growth over the years. On quarter 4, sales did decline impacted by both the gross to net, which we'll talk about a bit more as well as the Entresto LOE and Core OpInc is up 1%. We did have some important pipeline highlights, which we'll cover over the course of the call, but I think a few I wanted to highlight upfront.

First, remibrutinib, we achieved the submission in the most common type of CIndU that was based on positive Phase III results as well as interactions with the FDA. And we'll have the remaining readouts for the 2 other subtypes of chronic inducible urticaria over the first half of this year. And with pelabresib, we now have a path forward for both the EU and the U.S. I'll go through that data and the path forward on a future slide.

So overall, we met our upgraded full year 2025 guidance. We expect to grow in 2026 through the largest patent expiry in Novartis' history, which I think demonstrates the strong performance we have on our key growth brands as well as our pipeline replacement power. Now moving to Slide 6. The growth drivers in the quarter continued their strong trajectory as well as on the full year. Here, you see the full year numbers.

You can see Kisqali was up 57% on the full year. Kesimpta was up 36%. Scemblix up 85%; Pluvicto on the PSMAfore launch, having dynamic growth as well. We'll talk about each of these brands in turn. Overall, a 35% growth in this portfolio, and this is a portfolio that will carry us through the end of the decade as well with many of these brands taking us into the mid-2030s.

Now moving to Slide 7. On Kisqali, we grew 57% in the quarter -- on the year to $4.8 billion, outpacing the market for CDK4/6. Now when you look at the chart on the lower left, our growth was 44% in Q4. When you remove the U.S. RD adjustments, our global sales grew at 54% and our U.S. sales growth was at 62%. So in our view versus the consensus, the entire miss really came from these onetime RD adjustments.

We remain fully confident on the $10 billion peak sales outlook for the brand. And what's underpinning that confidence is the very strong volume growth we're seeing across geographies. When you look at the middle panel, U.S. eBC NBRx is now above 60% and holding steady. I think that really demonstrates the strong preference providers have for Kisqali, particularly in settings where we are uniquely positioned.

And in Germany, we have over 80% NBRx share in the early breast cancer setting, which I think shows again this early strong performance for the launch in Germany, which we hope to carry over now to other ex U.S. markets. So going to the last panel, I already went through many of the key elements, but I think I wanted to also note that eBC NBRx share is leading in both the overlapping and the exclusive population.

Outside of the U.S., we have important launches in Italy and Spain coming up in 2026. And finally, we continue to bolster the data profile for Kisqali, both with data that we recently presented at San Antonio and ESMO. We'll continue to follow up these patients over the long run, and that should allow us to continue to have mature OS data over time, which we think will continue to bolster the portfolio. So very excited. Kisqali continues to be -- have the outlook to be the largest brand in Novartis' history.

Now moving to Slide 8. Kesimpta grew 36% to $4.4 billion on the year. You can see the continued steady performance of this brand, driven by the continued expansion of the B-cell class within MS. In the U.S., we had 27% growth in quarter 4. Importantly, we see increasing adoption in naive patients, which are now 50% of our NBRx is now in first line. Outside of the U.S., we are leading now with NBRx share in 9 out of the 10 of the major markets that we track.

And the core opportunity we see ex U.S. going forward is to continue to expand B-cell therapies in the 67% of patients who are not on B-cell therapies and receiving disease-modifying therapies in MS. So we continue to generate additional value for Kesimpta. We continue to progress also our every 2-month formulation for Kesimpta. So I think we're on a solid track with this brand to fully achieve our peak sales guidance of $6 billion plus.

Now moving to the next slide. Pluvicto now really showing dynamic performance with the PSMAfore launch, 42% constant currency growth. We reached $2 billion in sales now overall globally. And that strong performance was driven primarily in the U.S., where we continue to see strong uptake in the pre-taxane setting. Sales grew 75%. We saw a 4x increase in our PSMA share since approval, now reaching 16% in that setting.

We also see continued growth on provider set, across provider settings, including the highest growth in community, where we now have over 790 treatment sites. Outside of the U.S., importantly, we've secured approvals in Japan and China, which also allowed us to continue to drive that ex U.S. strong growth. And we expect that growth to accelerate now with the Japan and China launches upcoming.

Now the next phase for Pluvicto as we expect to kind of get to the peak of the PSMAfore population over the course of this year will be the launch in the hormone-sensitive setting, which adds about 75% additional patients to the patients we already have from the VISION and PSMAfore population. That sNDA has been submitted to the FDA as well as the NMPA in China and PMDA in Japan.

We have the right foundation for that launch to be, we think, a rapid uptake with 2/3 of eligible hormone-sensitive patients already with existing treaters or providers. So the capacity is well established. I did want to flag as well that we have new manufacturing sites that are coming online in California, in Florida as well as in Japan and China. We have over 440 treatment sites now outside of the U.S. as well.

So we've really taken this to scale, which positions us well for the Pluvicto launches, ongoing Lutathera business as well as our future RLT portfolio. Now moving to Slide 10. Leqvio reached blockbuster status in the quarter, an important milestone for this brand as we continue that steady trajectory that we often see for cardiovascular launches, 57% growth on the full year, 46% on the quarter. In the U.S., we continue to outpace the overall advanced lipid lowering market.

And our real focus is increasing depth in the health systems we prioritize where there's strong capabilities within the buy-and-bill setting, strong interest in getting patients to goal, also focusing more on specialty areas as we've guided in the past. We saw a 33% growth in the setting versus the prior year. Now a key milestone for us outside of the U.S. will be the NRDL listing, which we achieved in China and is now already now started in the first part of January.

As you have heard on previous calls, we have had very strong uptake in China in the private setting. And now with the NRDL listing, the early signals are very strong for a rapid uptake in the China market for Leqvio. So we're quite excited about that, and it's a key focus area for us in 2026. We continue to build the evidence base for Leqvio, important publications in various journals, mostly focused on adherence rates as well as our ability to drive LDL-C down to goal regardless of which background therapy patients are on.

Now moving to Slide 11. Scemblix had another strong quarter. We've reached again blockbuster status with this brand, and we have NBRx leadership in the U.S. and Japan. 87% growth in Q4. Now if I could focus your attention on the middle panel in the U.S., we've reached 41% NBRx share now across all lines of therapy, and we plan to continue to grow that. But the most important thing for us now is to drive the growth in the first-line setting where we're trending ahead of our plan.

We're already now in the mid-20% range in the frontline setting. We want to drive that up. And I think as we get -- as we've now secured broad access, we have the opportunity now to continue to make Scemblix the medicine of choice on the front line for patients with TML. And now outside of the U.S., we also continue to have our leadership in the third-line setting with 72% share across the major markets that we track.

The early line indication is now approved in 60 countries, and we've already just launched in Germany, and we expect to get other EU markets online in the front line with launches expected in 2027. I think one ex U.S. market to note, which I think shows the ability we have to drive Scemblix outside of the U.S. is in Japan, where we already have 45% frontline market share -- NBRx share and 74% second-line NBRx share. So really strong outlook, confident in the $4 billion-plus outlook for this medicine.

Now moving to Slide 12. Cosentyx grew 8% overall in the year, getting to $6.7 billion on the steady march up to our $8 billion peak sales guidance. You can see the 11% growth on the quarter. In the U.S., we had 9% growth. That was driven by higher demand we saw both in hidradenitis and in IV. Right now, we're the #1 prescribed IL-17 across indications, and that's really because of the strong access that we have frontline access.

In HS now, we are the NBRx leader in naive patients with 51% share and 47% overall. And the naive market is 2.5x the switch market. Certainly, we've seen our competitor get traction in the switch market, but we're very much focused on that naive market where we have a really strong position. And the IV is also steadily advancing 8% a steady growth, 200 new accounts, and we expect that to continue over the coming years.

Outside of the U.S., no major changes, continued very strong growth, leading originator biologics in the EU and China. And overall, we would forecast Cosentyx to have, on average, mid-single-digit growth over the coming years as we get to that $8 billion peak sales potential. I did want to also flag that we have completed the submission with the U.S. FDA for polymyalgia rheumatica.

And so we're excited about that as an additional launch now for Cosentyx. And we've also are on track. We're also on track to file in the EU and Japan in the first half. So moving to Slide 13. Our renal portfolio has continued its rollout, I think, with steady progress. And separate from that, we also have amended our zigakibart Phase III protocol, which I wanted to talk about in a bit more detail. Starting with our renal portfolio, our IgAN portfolio contributed 50% of the NBRx market growth versus prior year, driven equally by Vanrafia and Fabhalta. So I think we see steady uptake across these 2 brands. Also in C3G, also continued steady adoption across the top accounts. So we hope to see that accelerate now over the course of 2026. And outside of the U.S., Fabhalta is now approved in C3G in 45 countries. Vanrafia had its EU submission.

So I think across these 3 brands, we have the opportunity to continue to build out a strong position. We do expect to be able to provide the full data set on the Fabhalta eGFR readout in IgAN soon and also move forward with the filing for a full approval in IgAN for Fabhalta. Now on -- and we also expect, I should also note the Vanrafia full eGFR data set in the first half.

On zigakibart, we have made the decision in order to optimize the overall label positioning and the competitive positioning to align our UPCR readout with the interim eGFR readout, which we expect in the first half of 2027. And we expect that to support our BLA for a full approval. This was a decision based on our analysis of the Phase I and II data. We think we have the opportunity to be second to market with both proteinuria and the eGFR benefit.

And so that, I think, is going to hopefully position us well to have a fourth renal agent in our portfolio. We also have combination trials underway because we certainly see the opportunity in having a hemodynamic agent, having a Fabhalta and having zigakibart, the opportunity to use combination to optimize care for these patients. Now moving to Slide 14. Rhapsido's U.S. launch, which is obviously something we're very closely tracking is delivering encouraging results.

We are optimistic with already what we're seeing in the early days for this launch. We see strong demand with an encouraging mix of patients, both patients who are post antihistamines as well as post a biologic failure. We have a strong and positive response from allergists and dermatologists. The sampling and bridge program has over 2,000 HCP starts. And I think that when we benchmark that versus other highly successful dermatology launches, it's right in line with some of the most successful dermatology launches.

We're also seeing early access wins. I think access will be now the gating factor. Every few months, we expect to bring on additional access on board. That will allow a steady pickup in sales over the course of the year with more of a steady pickup in the second half of the year. And I think for that second half, I would encourage everyone to watch as we get that access together. And as a reminder, I think you all know well, clean safety, no box warnings, no contraindication, no required routine lab monitoring, no liver safety issues in the label, fast relief across a broad population as fast as 2 weeks.

Anecdotally, we hear reports as fast as a day or 2 days, patients are starting to see benefit. And it's the only oral therapy approved by FDA who remain symptomatic despite antihistamine therapy. Now moving to Slide 15. Now Rhapsido is one of these brands that we hope over time could become one of the largest brands in Novartis' history. This is an opportunity over multiple indications. I mentioned CSU launch, the CIndU now positive data that we have in hand for type, 2 more types coming, an HS readout in 2028.

We have positive food allergy data, which we'll be presenting in Q1 of this year, and that's leading us to now initiate a broad Phase III program in food allergy. We are on track for the RMS readout second half of this year, but really mid of this year is the opportunity that we have to read out the RMS -- 2 RMS studies, SPMS and myasthenia gravis ongoing. So when you take that together, you clearly have an opportunity with a medicine with a clean safety profile. and strong efficacy with an oral -- as an oral option to have a significant long-term sales potential.

Now moving to Slide 16. Now Itvisma, which we haven't had as much attention, but it's something we continue to believe has a significant overall sales potential, total potential for this brand across the IV and IT of $3 billion plus. This is a U.S. approval that brings the onetime gene therapy in children 2 years and older. It's a broad label across patients who are non-sitters, sitters and walkers, no AAV9 antibody titer limit for this treatment.

There's a strong value proposition, single administration, durable efficacy, solid safety profile. So we see a multi-blockbuster opportunity for this brand. 7,500 children, teens and adults have not been treated yet with Zolgensma IV. We also have an extensive experience in the U.S. and ex U.S. with this medicine. Outside of the U.S., we've already been approved in the UAE 1 day after the FDA approval and Europe and Japan submissions are completed.

And as a reminder, for Zolgensma, actually, our sales are larger outside of the U.S. than in the U.S. So there's certainly a significant opportunity ex U.S. for Itvisma. Now moving to Slide 17. As I mentioned on the first slide, for pelabresib, we read out in the quarter 4, the 96-week data from the Phase III MANIFEST program, which both on safety and efficacy has now given us a path forward to, we believe, get this medicine registered, assuming successful regulatory and clinical trial Phase III trials.

In that study, we showed deep and durable responses and a comparable safety profile to ruxolitinib in myelofibrosis. You can see the data here on the left in terms of the spleen response. When you look at the data that we presented, we had a deep and durable spleen volume reduction for the spleen volume, 35% reduction landmark, 91.5% versus 57.6%. We also saw sustained improvements in symptom scores and anemia.

We had 2x as many patients reaching goal with the spleen volume reduction and the TSS50. So we believe this medicine has disease-modifying potential. We saw improvements in bone marrow pathology on the anemia. There was importantly now from a mortality standpoint, fewer deaths and progressions observed with pelabresib and ruxolitinib versus ruxolitinib alone.

And the overall safety now has proven comparable with ruxolitinib, including comparable leukemic transformation rates, which was one of the topics that was holding this program back. So with this data set, we have now an agreement with the EU to file in 2026 based on this data. And in the U.S., China and Japan, we'll be starting a new Phase III study focused on patients who have high TSS50 at baseline, where we believe we have the data set now to show we can achieve the regulatory milestone to ultimately get approval.

Now moving to Slide 18. I did want to also take a moment to mention our impact on global health. As I think many of you know, Novartis has been in global health for nearly 100 years, working on malaria and other neglected tropical diseases. With our Coartem medicine 25 years ago, we started a real sea change in the treatment of malaria, reaching now well over 1 billion patients with Coartem.

And now with the recent data we presented in November, we have the opportunity to bring the first new malaria medicine, novel medicines so in 25 years. This is KLU156, ganaplacide plus lumefantrine. It disrupts the parasites internal protein system, very positive data here. You see on the adjusted basis, 99.2% cure rates versus 96.4% versus a 5-day course, a 3-day course, opportunity to block transmission, very solid safety profile.

So we're quite excited to bring this forward as part of our mission in global health. So moving to Slide 19. Now taken together, a very good year for us from a pipeline standpoint in 2025. You can see we met the vast majority of our milestones and trial starts. And I think that really shows the strong execution machinery we have now in R&D at the company, very aligned across research and development and strong execution across our global development organization.

And turning to Slide 20. For 2026, we're on track for 7 pivotal readouts with the potential to strengthen the midterm outlook that we're guiding to, including the mid-single-digit sales growth we expect in the 2030s. A few particular readouts, which I haven't mentioned, which I'll call out. And on the left side, you can see pelacarsen for CVRR.

We do expect to read out middle of this year. It will be second half, but it will be middle of this year, which, if positive, would allow us for a U.S. submission this year. We also are on track for our submissions for Ianalumab in Sjogren's disease. and as well as the Del-zota DMD U.S. submission, which assuming the closure of the Avidity deal would also happen in the first half of this year. Number of pivotal readouts. I mentioned pelacarsen.

There will be the Ianalumab readouts in hematology, which could have significant potential to drive that brand to very large long-term potential. Of course, remibrutinib as well as the Del-desiran DM1 Phase III readout, again, assuming the closure of the Avidity. We also have the additional readout of the DUX4 interim data readout as well, which could support accelerated launch in FSHD.

However, that we would characterize as an upside case. And then a number of key study initiations you can see on the right-hand side of the chart. So another exciting pipeline year to continue to bolster our long-term growth profile. Now moving to Slide 21.

I will hand it over now to Harry.

Yes. Thank you, Vas. Good morning, good afternoon, everybody. I now walk you through our financial results for the fourth quarter and the full year of 2025, which, as Vas mentioned, was very strong despite midyear significant U.S. generic entries. And as always, my comments refer to growth rates in constant currencies, unless otherwise noted. So on Slide 22, 2025 marked another year of excellent execution.

So over the last 5 years, as you can see here, we delivered an 8% sales average growth rate and a 15% core operating income average growth rate, driven by strong commercial execution, a great late-stage readout and disciplined productivity programs. This translated on the right side into more than 1,000 basis points of core margin expansion in constant currencies.

And as you can see, in reported currencies, allowed us to reach our midterm core margin target of 40% 2 years earlier than planned. As you may recall, we initially planned for 2027. Now we have achieved it in 2025. With these results, I hope you agree, but I believe we have really elevated the company to a new level of sales performance, margin profile and as I'll discuss later, free cash flow generation.

On Slide 23, just a quick summary. You see that we have delivered our full year guidance in 2025 after upgrading twice throughout the year, and we guided to high single-digit sales growth, and we delivered 8%. For core operating income, we guided to low teens. and achieved 14%. And this is a strong result in the year, as I mentioned, where U.S. generic entries for Entresto, Promacta and Tasigna happened, and it speaks really for the momentum of our priority brands, as Vas already laid out, as well as disciplined cost management.

Turning to Slide 24. So here, a few more details. For the full year, we delivered the described solid top and bottom line growth, record core margin and record free cash flow, almost $18 billion. The core margin in the year improved by 210 basis points to 40.1% and core EPS rose 17% to $8.98. Free cash flow grew 8% to $17.6 billion. Now for the quarter, on the right side here, as expected, the U.S. generics had an impact, which we see in quarter 4, and then Mukul will lay it out first half of next year or 2026, but then again, back to growth.

Anyway, sales declined 1%, whilst core operating income increased by 1%. And the results were a little bit noisy due to some U.S. R&D adjustments, a positive impact in quarter 4 of 2024, so last year financially and a negative impact this year in quarter 4, 2025, mostly on generic -- so excluding this adjustment, underlying quarter 4 sales growth would have been positive 3%. As said, the vast majority of the gross net adjustments were Entresto and other generic brands like Promacta and U.S.

Core EPS in the quarter, $2.03, up 2%. Now on Slide 25, you can see our continued progress on free cash flow generation, which reached $17.6 billion, all-time high for the company in 2025. I think it shows you also besides the financial, the power of being a pure-play pharma company. As you know, many years back with even 6 businesses or even before the Alcon and Sandoz spin, these numbers were usually in the $10 billion to $12 billion range.

And now this is the earnings power of a focused and very successful pharma business. We remain, of course, focused on ensuring that the growth in core operating income translates into high-quality earnings and strong cash flow generation. This robust cash flow allows us to reinvest in the business, pursue bolt-on acquisitions and continue to return attractive capital to the shareholders through growing dividend and share buybacks.

On 2026 -- on Page 26, a quick reminder on our unchanged capital allocation strategy. And as you see, we continue to execute our balanced shareholder-friendly capital allocation in 2025. We invested more than $10 billion in R&D, an 8% increase versus prior year, announced 4 acquisitions, 10 licensing deals, strengthening our key platforms and pipeline across all of our 4 therapeutic areas.

On returning capital to our shareholders, we completed our $15 billion share buyback program in early July, and we launched a new up to $10 billion program targeted to be completed by the end of 2027. Approximately $7.7 billion of that remains to be executed. In addition, we distributed $7.8 billion in dividends during the first half of 2025. Now speaking of dividends.

Turning to Slide 27. We are proposing a dividend of CHF 3.70 per share, a 6% increase in Swiss francs and even double digit in dollars. And it's our 29th consecutive dividend increase in Swiss francs since company creation '96 and including years following the Sandoz and Alcon spins when we did not rebase the dividend at all. This reflects our long-term and long-standing commitment to a growing dividend in Swiss francs per share. That concludes my remarks.

Before handing over, I'd like to briefly acknowledge that this will be my final earnings call as CFO of Novartis. It has been a privilege to serve in this role in the last 13 years and to work alongside Vas and so many other great colleagues to help guide the company through a period of significant transformation and performance improvement. I'm very pleased to hand over to Mukul, a long-time colleague. In fact, we both started maybe at different stages of our career in 2003 at Novartis and very intensively worked together, especially in the last 10 years.

So with that, I turn it over to Mukul to take you through 2026 guidance.

Yes. A big thank you to you, Harry, for everything. It's been -- it is an honor to step into the role that you're leaving me with, and I look forward to getting to know everybody on the line in the months to come. So if you can go on Slide #29, please. For 2026, we expect sales to grow low single digit and core operating income to decline low single digits.

And this reflects the 1 to 2 percent points of core margin dilution related to the Avidity deal that we had previously indicated. Importantly, in 2026, we will be growing top line through a period of highest GX impact in our company's history. At the same time, we will make sure that we continue to invest in R&D. We fund our launches appropriately while driving forward with the productivity improvement plans that the company has.

As previously noted, we expect to close the Avidity deal in the first half of 2026. Looking ahead, we remain very confident in our 5% to 6% sales CAGR in the '25, '30 period, and we expect to return to 40% plus core margin in 2029 as laid out in our Capital Markets Day. For 2026, we expect core net financial income expenses to be around $1.7 billion. This is higher than the '25 levels, and this is largely due to the anticipated funding costs related to the Avidity deal, which we have previously indicated is primarily going to be debt funded.

We also expect core tax rate to remain around 16.5%. Moving to Slide 30, please. As we have previously indicated as well, 2026 is going to be a year of 2 halves. We expect -- we continue to expect strong volume growth from our priority brands throughout 2026. But we have to understand that for the first half of the year, we will have a tough prior year base with Entresto, Promacta and Tasigna generics having entered the U.S. market mid-2025.

With that, we expect the first half of the year sales to decline low single digit and core operating income to decline low double digit. Additionally, Q1 will be impacted by the 2% positive gross to net impact that we had in the base Q1 '25, which will weigh on the quarter-on-quarter growth rate in Q1. That said, in the second half of the year, we expect a clear improvement with sales growing mid-single digit and core operating income growing mid- to high single digit.

This takes us to our full year guidance of low single digit on top line. So moving to Slide 31, please. If exchange rates remain as at their late January levels, we expect a positive 2 to 3 percentage point impact on our full year sales and a positive 1% point impact on core operating income. And as a reminder, which Harry has conveyed previously, we published updated FX estimates monthly on our website.

So that concludes my remarks, and I hand it over back to Vas.

Yes. Thank you, Mukul. I want to take a moment as well to acknowledge Harry Kirsch's incredible contributions to Novartis over 23 years. Over my tenure as CEO, now entering my ninth year, Harry has been by my side as we've transformed the company into a pure play and I think unlocked really outstanding shareholder returns, outstanding financial performance.

But probably less visible is the strength of the finance organization Harry has built as well as the culture he's created in the company around productivity, financial discipline and operational excellence. He'll surely be missed, but will continue his legacy in the years to come. And a big welcome to Mukul, who I've known for many, many years. It will be a great addition to the team and continue the strong track record of Novartis finance and delivering strong operational execution.

Now moving to the next slide. I do want to take a moment to build on Mukul's comments on our confidence in the -- our 5% to 6% sales CAGR to 25% to 30%. That includes the impact of Entresto in 2026 as well as the U.S. MFN agreement impact. You can see in the chart, we do expect some generic impact. So a lot of that is front-loaded in the first -- early part of the 5-year trajectory here. A number of brands where we believe we can drive dynamic growth in the middle column.

And then lastly, a strong set of assets that we probabilized in our pipeline. This ranges from lanalumab, our various Pluvicto and actinium PSMA, pelacarsen as well as the Avidity assets, amongst others, that give us the opportunity to not only hopefully deliver the 5% to 6%, but if we're successful on those pipeline assets, we could even drive higher growth in the period.

So moving to Slide 34. and in closing, strong performance in 2025. We delivered the guidance that we outlooked and got to our 40% core margin early. Our priority brands continue to outperform, and that's what's going to drive our growth through the second half of '26 and then through the 5 years to come. We're advancing the pipeline meaningfully in 2020 -- we advanced meaningfully in 2025 with 7 pivotal readouts this year. And we're confident in that mid- to long-term growth guidance.

So move -- so with that, we can close this section and move to questions. So operator, we could open the line. Thank you.

[Operator Instructions] We'll start with our first question, and this is from Sachin Jain from Bank of America.

Perhaps I'll just kick off with thanking Harry for support and insight over the years. The question, I guess, for that on remi. You talked about avoiding liver monitoring in MS given no high law. Competition recently has been vocal avoiding monitoring in the label when monitoring has been involved in the studies could be difficult.

So I wonder if you could just give us any color on FDA conversations around this topic and whether monitoring in the studies picked up events that required dose changes? And then a quick follow-on on efficacy. Any color on what you're targeting on relapse or progression given we have no Phase II to go here.

Yes. Thanks, Sachin. So I think first on liver, I think we should first take a step back and note that we already have an approval and an approved label without any liver safety discussion in the label, which just points to the fact that remibrutinib structurally does not have the off-target toxicities we believe that the structures of some of the other molecules do.

And so that we didn't have any of that in the existing TSU label. I think I have an abundance of caution given the findings of the other competitors, FDA asked us for a limited liver monitoring to our understanding that's more limited than the liver monitoring that our competitors have had to add to their programs. And our full plan is assuming that we -- and as we've seen to date, no liver signals in our study, we fully plan to advocate to FDA that we should stick to the current label in the absence of any information to really -- any data to really change the current label with respect to that.

I'd also note that for -- in general, for competitors, when there is a Hy's law case, at least to our understanding, whether it's 1, 2, 3 cases, that generally leads to REMS programs, leads to monitoring, does lead to warnings and precautions, just given the safety risk that these -- that creates for patients who have alternative therapies. And in RRMS, there's numerous alternative therapies. So safety is absolutely paramount.

So I think that's our overall perspective on the safety. We're very confident in overall remi's safety and assuming 2 positive Phase III trials this summer, the potential for this to be a very significant medicine. Now with respect to efficacy, I think it's very fair to point out, we don't have Phase II data. We went to Phase III based on the findings that we saw from competitors.

So -- but I think given that we know that we hit the target very well at 25 milligrams BID and we move up to 100 milligrams BID in the study, we think we'll definitely have strong target saturation. We think the molecule is very well designed when we look at the PK and the PD of the molecule.

So that gives us confidence that assuming the class is effective against RRMS, we will have a compelling profile from an efficacy standpoint and with the safety profile and with the fact that we're established now in the market having already launched should give us a strong value proposition.

We'll take our next question today, and this is from Simon Baker, Rothschild & Co Redburn.

Two, if I may, please. Firstly, on -- just continuing on remibrutinib. -- going on from Sachin's question. I just wonder if you could give us your updated thoughts on the commercial opportunities here in MS because it kind of feels like that your enthusiasm for remi in MS has increased over time.

A couple of years ago, there was talk of almost MS being playing second fiddle to CSU. So just updated perspectives on your thoughts on the commercial opportunity. And then moving on to pelacarsen. You've now guided to a 2H '26 readout. Given this is an event-based study, could you just give us any thoughts on potential risks and risk mitigation for this what appears to be significantly lower event rate, does this run the risk of creating additional noise in the study?

Or is that more than offset by the powering assumptions and the design that you've built in there? Any thoughts on that would be very helpful.

Yes. Thanks, Simon. So first on the commercial opportunity, I think it's really going to be data-driven. I think our base case assumption is that an oral drug will struggle to have the same level of efficacy as monoclonal antibodies in hitting the B-cell pathways in MS.

And because of that, that still B-cell monoclonal antibodies will be the dominant class, but there will be a number -- large number of patients that would want an oral option and who don't want to go through injectable therapy. I mean, as I noted in my slide, still 25% of patients in the U.S. and 65% outside of the U.S. are on DMTs and are not on B-cell injectable B-cell therapy. So there's a large market there on its own.

And then I think it will depend if the efficacy and safety profile overall, particularly the efficacy profile in the case of remi in our hand is compelling enough to have a broader market. So I think we'll certainly see based on the data. But even if we take it as a given that there is a large B-cell monoclonal class out there, there is a large market opportunity beyond that, which we think is important.

And then, of course, the question is with the brain penetrant properties of our molecule, does that lead to other opportunities either in SPMS or in the control of RRMS that provides another dimension, and that will all be data driven as well. So in this case, I'll exceptionally take the second question, but if everyone could limit themselves to one question. Pelacarsen, so we expect a midyear readout.

The study is going to completion in terms of the number of events that we had originally outlined. We had powered up the study, you'll recall, during the process of the Phase III. So we feel like we're adequately powered to demonstrate both at the 70-milligram per DL cutoff and the 90-milligram per DL cutoff, the CVRR that we're targeting. And so I don't think there's necessarily any risk associated with going in full. I think what it does indicate is that the event rates are lower than what we had modeled from the published literature.

And I think that's just something that is just the reality now that we found. We suspect it has to do with the fact that we've really optimally managed these patients for all other risk factors, particularly LDL lowering. And I think that, of course, has an impact on event rates as well. So we'll see, and we're excited to see this data and hopefully creating an entire new class of medicines that can help a whole group of patients that have no other option.

And so I think with a positive study, we have the opportunity to give these patients a hopeful solution against sudden cardiac death and some of the other things that can happen for patients with elevated Lp(a).

And the next question today is from Matthew Weston, UBS.

Can I also add my thanks to Harry for all his support and best of luck for the future, Harry. Vas, Kisqali is building into a fantastic and highly profitable medicine for Novartis. And I guess the only challenge is it has an LOE just after your 2030 time window. What are the options in-house to extend the franchise further in breast cancer?

And given the SERD data that we've seen from a competitor, what other options are there from BD that could potentially -- or is oncology, I should say, a category where BD looks like somewhere you should supplement the Novartis pipeline?

Yes. So I think there's actually 2 questions in there, but I'll also take both of these, Matthew, because it's you, Matthew. With respect to Kisqali, I think right now, we guide to a mid-2031 with the pediatric exclusivity that we would expect for this brand in the U.S.

I think it's longer outside of the U.S. depending on the market. Our core goal at the moment is our CDK2, CDK2/4 and CDK4 programs, all of which now are in the clinic, and we're advancing as fast as we can to see which of these medicines can provide either additional benefit in the post- Kisqali setting or either in combination and we'll see what we ultimately learn.

Of course, we also are advancing our radioligand therapy portfolio. We have HER2 RLTs now in the clinic. Those will be important to watch as well as the [ neobombesin ] RLT as well in breast cancer. So a number of shots on goal. And I think those will all be very important for us to continue to life cycle manage Kisqali, as you rightfully point out, beyond the mid-2030s. I always think about it as a full year 2032 effect for this brand.

Now I think with respect to BD and M&A, I think absolutely, I mean, we see amongst our therapeutic areas, clearly, oncology is one we'll have to focus on. So we'll continue to focus there as we have. I would say we've had just more opportunities and traction in the last years in cardiovascular, immunology and neuroscience. You've seen us do a large number of deals in those spaces.

We'll continue to see, and of course, it's a high priority to continue to build oncology now that we have the scale we're building from Scemblix, Pluvicto, Kisqali. And so if we find good opportunities, good assets, we'll certainly go after them.

Next question is from Peter Verdult, BNP Paribas.

Peter, BNP Paribas. Just on Rhapsido and ianalumab. Given we're now in an MFM world, how should we be thinking about ex U.S. launch plans for what are clearly mostly significant assets. I'm basically just pushing my life to see how specifically you're comfortable being about changing in rest of world launch strategies for important assets like ianalumab.

Yes. So I think this is high in our minds. We're working through strategies here on Rhapsido, given that it's already launched, of course, we would be exposed on the first pillar of the MFN approach, which is on the Medicaid rebate it's more limited. And I think there we can manage. We think we have good options to manage the ability to launch Rhapsido globally.

Of course, we'll have tighter pricing corridors, but that's something we think we can manage. Ianalumab is more complex as we get to launches in 2027 in the G7 countries. There, of course, it's on the entire market of U.S. net price, not just Medicaid. And so we're working through strategies. Absolutely, it's our aspiration to get these medicines launched in all of these markets given the patients that need them.

But we certainly can't adversely affect the U.S. market. And so we're just going to have to be thoughtful about looking at where are there opportunities to price appropriately for the value that ianalumab brings. Given the PPP adjustments and some of the other elements of how pricing is looked at, are there things we can do to manage this. It's all in the works. I think we'll have a better sense over the course of this year on ianalumab. But on Rhapsido, we feel confident we have a way forward to get a global launch moving ahead.

Next question is from Steve Scala from TD Cowen.

On pelacarsen, Novartis has said previously, that a delay in the HORIZON trial readout would stem either from overestimating the baseline risk or underestimating the treatment effect. Do you have a sense of what is at work here I would think the baseline risk, if it were overestimated would question the value of lowering LPA in the first place. And I would think that Novartis should have a better handle on treatment effect based on early studies. So any color of Novartis' view at this point would be helpful.

I wish we knew, Steve. Honestly, obviously, I can only give you an opinion. I can't actually give you a fact because we're completely blinded, and we have no database insights. We believe that we have appropriately estimated the baseline risk. And that's not so many rounds of looking at it. So it might be that baseline risk is more prominent at higher Lp(a) threshold.

I think in my mind, it really comes on to what Lp(a) threshold that we appropriately thinking about the baseline risk and how -- and this is, again, I think not in our -- no way to know if this is correct, but my assumption is that at lower Lp(a) levels, there could be more interactions with LDL and other risk factors. And that Lp(a) becomes more dominant as you get to higher Lp(a) levels and because the risk goes up almost linearly at a higher Lp(a), that becomes the dominant risk factor.

And so the studies obviously have some portion of patients at the 70 to 90 to 100. We've, I think, announced in our papers that overall, our median is 108. So that's kind of our best guess in terms of the risk profile and how we've estimated. Obviously, we would love for this to be that our treatment effect is larger than we expect, and that would be the reason for this, but there's just no way to know that at this time.

Next question comes from Richard Vosser, JPMorgan.

Just a question on Itvisma. Just how should we think about the ramp of that product in the U.S. and ex U.S. could imagine that there are some patients that are potentially waiting for the therapy. So have you seen warehouse patients? And how should we think about the launch?

Yes. Thanks, Richard. In general, for gene therapies, we see often a pretty fast ramp as we get through the kind of prevalent pool of patients. And then it kind of comes down to a more steady state. And I think over the next 2 to 3 years, we would expect really Itvisma to penetrate the majority of the kind of relevant patient pool that it has.

And then come back down as we saw with Zolgensma more to a steady state because of the nature of the onetime therapy. So I think relative to other brands, the ramp will be on the faster side. It won't be in 6 months, but I think over the first few years, will get to peak relatively quickly and then come down from there. And we do have, I think, warehouse patients, we do have patients that we really understand. We also have strong access, we think, in many markets. And as we build that access forward, I think that will really allow us to maximize the medicine.

Next question is from Graham Parry from Citi.

So I reiterate the best wishes for Harry, of course. And then a question on Kisqali and the outlook for the year. So how much of the gross to net impact that was impacting fourth quarter carries through into the next year because of a different channel mix versus how much is one-off?

And so to what extent does that give you an easy base for comparison in 2025 into 2026? And then any thoughts you have on the risk that oral SERDs might pose to encroaching on CDK4/6 combinations in the adjuvant setting?

Thanks, Graham, and great to have you back. On Kisqali, I think the higher gross to net, we believe, is a onetime effect where we saw higher Medicare utilization than we had forecast in 2025.

We do expect as the early breast cancer launch continues to accelerate and our mix shift to younger and younger patients that this will net out back towards where we had historically expected. And I think we should be fine from that point forward. And Harry wants to add something.

Yes, Graham, thank you very much. And by the way, everybody, for your nice words. So on Kisqali, I mean, one thing to note is that actually in quarter 1 of '25, with a positive gross to net as Mukul pointed out. So in quarter 1, that's a higher base due to one-timers.

As Vas mentioned, the quarter 4, what we have noted here out-of-period adjustments. So if you take that out, it's really the true quarter 4 performance. And then quarter 4 of '26, there should be a bit of a lower base because of this negative this year. But overall, the -- basically, these gross to net adjustments are all out of period, so one-timers and the underlying is what you see.

And then with respect to the oral SERDs, we've had a lot of discussion, and we feel confident that when we look at the profile of Kisqali and what we hear from physicians that physicians want a CDK4/6 inhibitor for patients who can benefit. And they, of course, need to look for an endocrine therapy option.

Certainly, the oral SERDs now have the opportunity over time to become the standard of care endocrine therapy option. We already know that roughly half of patients in the early breast cancer setting in the U.S. are already now on a CDK4/6, and as we continue to penetrate that base of patients, we think that the opportunity will be CDK4/6 plus the choice of historical endocrine therapy or the oral SERDs, and that's how this market will play out.

At the margin, could there be some physicians who choose an older endocrine therapy plus a CDK4/6 or an oral SERD and not a CDK4/6. Certainly, that dynamic will happen, but we don't expect that to be the predominant approach in the U.S. or in any of the other core markets. That's what gives us confidence in the $10 billion-plus guidance that we have and are sticking to.

Next question today is from Seamus Fernandez of Guggenheim Securities.

And just would echo, Harry, we'll miss you, for sure. Vas, hoping you could maybe give us your thoughts on the overall food allergy opportunity within your overall portfolio, obviously, Xolair has done extraordinarily well in this space with excellent growth opportunity. Just hoping to get your perspective on that as well as the opportunity that you see potentially within your broader portfolio, not just for the BTK, but beyond.

Yes. Thanks, Seamus. We've had a long history looking at food allergy. It goes back to medicine. Some of you will remember called QGE031, which was a high affinity IgE. There was supposed to be a follow-on for Xolair. In the end, we weren't able to show a stronger effect than Xolair has ultimately shown in food allergy.

So we know the space well. once we saw the Phase II data for remibrutinib and food allergy, I think it changed our perspective to really think now how could we build this out to be a significant market opportunity. So we'll be sharing that data, as I mentioned, in the coming month or two. And with that data set and now the agreement with FDA on how to advance into Phase III studies, we see the option for a safe oral medicine to be able to hopefully be given broadly to patients.

And you know that a lot of the patients in food allergy that are most interested or at risk to be treated are children. And so versus ongoing injections, having an oral high efficacy safe option, we think would be pretty compelling. So I think overall, we see food allergy is a multibillion-dollar opportunity. I certainly with the potential to make something major out of this. We're going to obviously run through the phase Phase III program.

We're excited to share the Phase II data as well. And then beyond that, now we are evaluating are there other opportunities within the pipeline earlier at Novartis. And, of course, externally as always, to see can we further bolster our food allergy portfolio. So I think it's definitely a shift, but something we're getting quite excited about.

Next question is from James Gordon at Barclays.

The question was on pelacarsen and what a win now looks like. So you talked about a potentially lower event rate. Where is the latest magnitude of efficacy? I think the original design was a 20% benefit in the broader population, a 25% benefit in a narrow population with a longer study and maybe some other tweaks. Is that sort of the minimum? Is there a possibility that you could actually have a benefit for either of those groups that were statistically significant, but didn't quite hit the her? And if so, would that still be a product with strong commercial prospects?

Yes. Thanks, James. So you are correct. It is a 20% powered for 20% in the 70 mg per DL group and 25% for the 90 mg per DL group. We can win on the study with a relative reduction that's lower than that. And so certainly, there is the opportunity to win with CVRR in the mid-teens.

I think we have to evaluate, I think, for patients who have no other option. And if we were to win at that lower level, what would be the right approach to bring it to market. And that's something we'll have to see based on the data. But that's certainly something we'd have to look at. Of course, we hope for a much higher CVRR impact either at the lower cutoff or the higher cutoff, but we're going to ultimately have this to be data driven.

There have been no other changes, though, from a protocol standpoint, from a study design standpoint, everything is as it was when we originally started the study with respect to powering, et cetera.

Next question is from Michael Leuchten from Jefferies.

A question for Harry, please, given it's your last time with us. Harry, the SG&A expenses in the fourth quarter were extremely tight. Very good performance there, helped you to gear the margin in underlying terms. As I think about the margin for 2026, obviously, you do have the Avidity dilution.

But if that SG&A control continues, I struggle to see how you're going to get as much dilution, especially if avidity doesn't quite close as quickly as maybe it could. So can you just talk about the repeatability of that SG&A performance in the fourth quarter into 2026?

Yes. Thank you, Michael. Actually, any 2026 question is kind of for Mukul, so I will hand over in a second. But Historically, we always had quite an increase in quarter 4. So we took this year to say, look, this is inefficient to have such a peak in a quarter where you have 1 to 2 weeks of Christmas and you have also the U.S. Thanksgiving and so on. It shouldn't be actually a big peak here.

So we took that in order to even a bit out. And overall, we will continue and Mukul, of course, will drive productivity programs, right? But Avidity, just one thing. I mean, when we -- a day before quarter 3 earnings, when we took you all through the Avidity deal, we said it would be a 1% to 2% margin point dilution effect given the unusual high development cost burden in the next 2 to 3 years of a late-stage development product with a very expensive medicine from a COGS, especially when it is under contract manufacturing.

So not everybody has figured this into the consensus. It's okay when people don't follow everything we say, but we have mentioned it to you. And 1 to 2 points, if you take 1.5, it's pretty much what you get when you have a low single-digit increase on sales and a low single-digit decrease in core operating income. So we feel we have implemented exactly that without Avidity would have been unchanged margin basically.

But Mukul, what do you think?

Harry said it all. I think it's -- the short answer -- the short add-ons to the answer that Harry gave was, the SG&A cost control, productivity plans within the organization is something that we, as a company, feel very proud of on what has been achieved in the last 4, 5 years. And as we go into our next 5-year journey, this will absolutely continue going forward.

There is a certain bit of margin dilution that we had predicted. And if we -- and that's the reason that we gave clarity on H1, H2 because if you look at how once the GX for this year are going to come off the base, we actually see core operating income starting to grow. And that kind of sets the base or sets the expectations for what to expect of our P&L in the next 4 years to come.

We'll take the next question, and this is from Thibault Boutherin from Morgan Stanley.

Just a question on Cosentyx and the dynamic in the HS market. It looks like shares have been stabilizing for some time between Cosentyx and the main competitor in terms of NBRx and total script. So from here, is it fair to assume that both drugs should grow in line with the market. And I think the last is to say the HS market should expect a growth around 15%. So I just want to know if it's the type of growth that just you're seeing today?

Yes. Thanks for the question, Thibault. So you rightfully point out, we've seen stabilization in the overall NBRx share in the market. As I noted, we're kind of in this 48% to 50% range. And then we see the two other medicines splitting the remainder. We're doing very well in the naive population. And then in the switch segment, we see our competitor performing very well.

So I think that's kind of the dynamic. We've seen that dynamic kind of stabilize now. So we would expect that dynamic to continue going forward. So I think both -- all brands will grow based on the market. Now clearly, the market potential here is quite large. It's just a matter of how effective we are at getting patients to come in to get to get treatment.

So we continue to see this kind of $3 billion to $5 billion market opportunity, but could it be larger if we were able to mobilize with two competitors and potentially more future competitors coming in, the market growing faster certainly. And we, of course, want to capitalize on that. And that's part of the reason why we studied Rhapsido in HS because we see the opportunity here to build this market hopefully, with a high efficacy safe oral to then go make the market even larger.

So something we'll continue to work to build and hopefully get more of these patients are kind of lost to treatment, probably we're on a TNF ultimately not successful get those patients back into the medical home and backlog therapy.

[Operator Instructions] We will now take the next question, this is from James Quigley from Goldman Sachs.

My thanks and congrats to Harry as well for the next chapter. My question is on the Lp(a) portfolio. So as you showed in the slide, you started a new trial Phase II trial for DII235. Firstly, what are the dosing intervals by testing for that drug? And secondly, at the media management event, as you were saying that if HORIZON were positive, that could then lead a decision to move some of the longer-acting Lp(a) straight into Phase III.

So are there other assets in the portfolio that you're holding back, waiting for HORIZON to move into Phase III. Is this Phase II a function of a pushout in HORIZON? Or is it just you want to see more data beforehand before making a final decision here on which assets to take forward?

Yes. Thanks, James. So for DII235, our partner, Argo Biosensors, I think, publicly released that this is has had already strong data in the early Phase II study and has a potential for an annual dosing interval. And we are prepared to move that study -- that program directly into Phase III based on the HORIZON data set. So there's no change in our plan.

I don't know if there might be different things happening between the studies and their studies and et cetera. But our strategy very much is based on the HORIZON readout, to then based on the data we've seen with DII235 on an annual dosing interval to move that forward then into late-stage studies. We do have, of course, a range of other programs earlier stage as well on the range of cardiovascular assets.

We've talked about that in the past. HMG coA Reductase, annual PCSK9, of course, the angiotensin 2 siRNA and then combination programs as well that we're working on, both at the 6-month interval and at the 1-year interval. And so both because we life cycle manage Leqvio but also be prepared that pelacarsen is positive. So the HORIZON is positive to seem to be ready to come with what we think will be the preferred market option we want to be ready for all these eventualities.

And the next question is from Peter Verdult, BNP Paribas.

Just a follow-up for you, Vas, on the pipeline. Just on this basket of cell therapy programs in autoimmune, I think some of them do read out next year. Just wondered if you've got it in the top of your head in terms of which ones and which indications and perhaps a general temperature check on your behalf in terms of your level of enthusiasm for these programs.

Yes. Thanks, Peter. We remain enthusiastic. We have a huge effort internally on YTB as a first instance, currently in pivotal studies, aligned with FDA over 4 indications and then with follow-on programs that are now in proof-of-concept studies in 3 -- 4 additional indications as well. and then additional exploratory work that's ongoing.

And then behind that, trispecific and bispecific monoclonals also to explore can there be alternative options for certain patient groups in the immune reset. I think the first readouts we'll have will be in SLE lupus nephritis. That's building off of the data we presented last year on 20, 23 or 24 patients where we showed, I think, pretty spectacular results for those patients in terms of winding the progress of their disease other than the permanent damage that has happened to the kidneys.

And so quite exciting data. That's allowed us, I think, to move forward on that study quite quickly. But we also are advancing all the other programs. And some of them, if we're fortunate, might even be able also to read out next year depending on enrollment patterns and enrollment time lines. So we're advancing these as fast as possible.

Depending on the program, many of them have alignment with FDA that we can file off of a single arm and then continue on to provide data on randomized data sets. Others need the randomized upfront. So that all varies based on indication. But I think a lot of the enthusiasm and focus inside the company.

Now take the next question, and this is from Michael Leuchten from Jefferies.

Vas, just on Scemblix, you helpfully provide the share data across lines of therapy for the product. It looks like it's plateauing in first line in the U.S. a little bit over the last few quarters. What's stopping the momentum to continue?

Yes. Thanks, Michael. So we have looked into that. One thing to note is that data is very noisy because with CML, it's a rare disease, most physicians only see 1 or 2 patients. And so the data here always is getting restated. Overall, our view based on our internal assessments is we continue to see steady share growth on the frontline setting.

Actually, I would say our frontline share growth is ahead of our plan and our original planning assumptions. And so we see the opportunity here to really continue to grow. We have really strong broad access. One of the biggest things we're trying to overcome is the perception that we don't have strong access to get that access perception to where we want it to be.

And then, of course, as we've outlined in the past, you do have Gleevec loyalists out there who want to stay with a product that they've used for a long period of time. That will be more of a refractory group. But to get from the mid-20s up to the 40% to 50% share range is absolutely what our ambition is, and we see a path to get there. Next question I think this might be the last question, operator.

So the last question today is from James Quigley from Goldman Sachs.

I've got one quick one on Zigakibart. The data has been pushed out a little bit in order to have the eGFR data on the label at launch. But as you think about sort of the strategy here with your other assets, whether you had the UPCR data first and then adding the eGFR data.

Is this a case that the data were quite close together so it is worth having a delay, just trying to understand the rationale here versus the mechanism? Or is there something around the Zigakibart mechanism that could lead to a stronger benefit on eGFR relative to UPCR.

It's a great question, James. I think when we looked at the number of competitors entering in the [ anti-APRIL ] space. We asked ourselves, given we already have a strong portfolio in the nephrologist office, what would give us the most compelling data package to kind of cut through all of the various launches that are ongoing. And we felt coming right away with hopefully the second medicine with a full approval, clear proneuria reduction and eGFR benefit would give us a very compelling proposition.

I mean theoretically, assuming everything goes as we hope, we would have three medicines in IgAN with eGFR outcomes benefit across Fabhalta, Vanrafia, Zigakibart, and that will give us a very compelling proposition. So we thought that was prudent given that the time that passes here is three quarters, it's not the end of the world, and then we would have a much more compelling data set to provide to FDA.

All right. Well, thank you all very much for joining the conference call. We look forward to keeping you up to speed, and we wish you all a great 2026. Thank you.

Thank you. This concludes today's conference call. Thank you for participating, and you may...

Welcome to the 44th JPMorgan Healthcare Conference. I'm Richard Vosser, European pharma analyst at JPMorgan. It's my great pleasure to host the CEO of Novartis, Vas Narasimhan, for this presentation. Just a housekeeping. If you have a question, you can either raise your hand or you can go through the portal.

And with that, Vas, welcome to the conference.

Terrific. So a very good -- happy New Year, everybody, and great to be here with you today. This is a momentous occasion because it's the first time in my tenure, entering into my ninth year that we are a buy rating from JPMorgan. So really happy about that as I come here today. But overall, I think really happy to share with you the story of where we are at Novartis on our journey. As you know, over the last decade, we've really focused as a pure-play medicines company, exited all of our businesses, focused on high-end leading technologies in the therapeutic areas we care about most.

So just as a recap, over the recent years, very strong sales, core operating income performance for the company, 7% and 15%. That core operating margin by 2024 had reached 38.7%, on track to reach the 40% guidance that we had given. And I think this year, we have -- 2025, we certainly have the opportunity to approach that 40% range as we -- as you saw in quarter 3.

Now I think importantly, what that strong performance has allowed us to do is generate very strong free cash flow. You can see the free cash flow generation for the company, $16 billion last year and $16 billion through the first 3 quarters of 2025. That's given us the ability to really turn around our return on invested capital. We're now at 17%. We're approaching the top quartile on return on invested capital amongst the peer set, showing that we have the financial firepower to stably fund our operations.

And that's also being reflected now in the TSR for Novartis over the 5-year period, in the top 5 in the industry; in the 3-year period, top 2 in the industry. So I think our strategy is working and importantly, it's returning tremendous value to our shareholders.

Now our strategy remains unchanged. We set this strategy out really 5 years ago. We think it's the right strategy once we've exited now the other businesses, four core therapeutic areas, the 2 + 3 technology platforms, which I'll talk more about, our four priority geographies. And then our focus on driving growth and returns, strengthening our foundation. So a big focus on culture in Novartis remains to be the case, curious, inspired, unbossed company. And then continuing to deliver world-class operational excellence as you've seen through that margin performance over the recent years.

Now our capital allocation priorities remain unchanged: invest in the organic business as needed. Continue to do value-creating bolt-ons, you saw last year, we were one of the most active companies from a BD&L and M&A standpoint. We have the proposed acquisition of Avidity that we hope to close in the first quarter, acquisition of Tourmaline and Anthos, a number of licensing deals in our core therapeutic areas.

We remain committed to consistently growing our dividend in Swiss francs as we have since the creation of Novartis and ongoing share buybacks. We continue to work to complete our $15 billion share buyback, which we initiated last year. We expect that to be ongoing through the course of this year -- the $10 billion, excuse me. And then on an ongoing basis, we'll continue to look to additional share buybacks when we have excess capital. We see all of these components happening at the same time. It's not a sequence, and it's all with a view to return leading capital -- leading value to our shareholders.

Now taking a look at our pipeline, you can see that we've now developed, I think, one of the more deep pipelines in the industry. We don't face binary risk. We have 14 in-market blockbusters, which means that a single patent expiry, as you'll see this year with Entresto, we're able to grow through these difficult patent expiries when they happen. Nine in-market brands with multibillion-dollar peak sales potential, I'll go through that in a moment. Six ongoing launches, 15 submissioning-enabling readouts in the next 2 years, so coming up on a real catalyst-rich period for the company.

I mentioned the five platforms. And I did want to note that in those technology platforms where we're investing, we see markets here that are substantial, $36 billion for RNA therapeutics, $28 billion for radioligand therapies and potential with the opportunity to reset immune systems, up to $50 billion in cell and gene therapies.

Now turning to our long-term guidance. We guided to the markets in November, high single-digit growth, '24 to '25; 5% to 6% growth to 2030 and then mid-single-digit growth, 2030 and beyond. And what I hope to show in this chart is that's underpinned by a number of derisked in-market brands that I think we'll talk about also with Richard as well as a set of pipeline assets, we think that we'll have the opportunity to launch in the coming years, and then a very deep portfolio of pipeline assets as well as a number of brands that have protection into the mid-2030 period. That gives us, I think, that strong foundation as we continue to grow to a $60 billion, $70 billion; hopefully in the middle of the next decade, approaching an $80 billion revenue company.

Now when you look at our net sales growth in that period, it's going to be a story of offsetting Gx, which we'll primarily face this year with the loss of Entresto; full year effects of Entresto, Promacta and Tasigna; in-market growth from our in-line brands and then that probabilized pipeline. Clearly, if the pipeline delivers in full, we have the opportunity to outperform that 5% to 6%. But on a probabilized basis, we think this is a reasonable approach.

I did want to note that as we've guided previously, for 2026, we do expect 1% to 2% of short-term margin dilution from the proposed acquisition of Avidity and then expect to get back to the 40% by 2029. We think we can get opportunities. We have opportunities to get there sooner, but I think that's a reasonable guidance that it will take us till 2029 to really absorb these recent acquisitions and then get back to the 40% plus where we'd like to stay.

Now when you look at our commercial execution, I think one of the things I've been extremely pleased about in the recent years has been outstanding commercial execution from both our U.S. and international regions. And here is an example from our U.S. business. You can see Cosentyx in hidradenitis suppurativa, within month 8, we got to 67% NBRx share. When you look at Kisqali in early breast cancer, 63% early breast cancer share. Pluvicto, very strong performance. Importantly, Scemblix, very strong performance both in the first line and in the second line setting.

So I think that shows now that we're a company that can consistently deliver once we get an approval, the outlook launch trajectories, which we guide to all of you. And that will be, of course, extremely important as we now go through launches of Rhapsido, of ianalumab, as well as other launches we have in the coming years.

I also did want to note that from a geographic standpoint, we're #2 in China, #1 in Germany, #4 in Japan with an aspiration to get top 3 in Japan. So our ability to balance geographically, I think, also is a unique value proposition that Novartis brings.

Now turning to peak sales guidance. These are some of the peak sales guidance that we outlooked in November. As you can see, a number of brands with very significant potential. I would take note that now we guide for Kisqali to be a $10 billion-plus medicine. That's on the back of the very strong performance that we see in early breast cancer. Scemblix, we also now see with the long strong trajectory that we have, a $4 billion-plus opportunity.

We recently got the approval of ITVISMA, which is our intrathecal version of Zolgensma, so for patients 2 years to 18 years with spinal muscular atrophy. We're guiding for that to be a multibillion-dollar medicine. And then very importantly, for this year, one of our top priorities is the launch of Rhapsido, where we have the opportunity to have a multibillion-dollar medicine in CSU as well as on many of the other indications that we'll be reading out over the next 2 years.

Now when you look at our opportunity and from a pipeline standpoint, you can see a broad pipeline here. And one asset I wanted to call out -- a few assets I wanted to call out here, ianalumab for Sjogren's disease, opportunity in Sjogren's to be multibillion, but then across all indications, another multibillion-dollar opportunity. We're adding back on this chart, pelabresib. I'll show the data in a moment. But now with a very strong 96-week data that we have, this is an additional multibillion-dollar opportunity, we'll be a filing in Europe and then with an additional study, hopefully, filing in the U.S. And also, we include here the Avidity assets as well as some of the other assets that we acquired over the course of last year.

So over the coming period, we enter a real catalyst-rich period for the next 2 years. You can see the number of readouts that we have on some of our key medicines. 2026 will be a very important year, important readouts that I think can underpin that growth into the mid-2030s as well as in 2027, a continued regular flow of regulatory filings as well. So we'll be looking forward for these data readouts, keeping the markets up to speed. And then, of course, as we get those submissions in, the launch trajectory thereafter.

Now turning to pelabresib. This is the data, 96-week data we presented of pelabresib plus ruxolitinib. And the data showed at this time point, deep and durable responses with comparable safety to ruxolitinib. We presented this at ASH, very strong efficacy, significant reductions in spleen volume, you can see 91% versus 57%. Twice as many patients reaching spleen volume reduction or the TSS50 response, very good safety profile.

So now our path forward after consultation with the EU will be to file this medicine in 2026 based on that 96-week data. We also have alignment now with the U.S. FDA to start a new Phase III submission-enabling study which will focus on patients with higher symptom burden at baseline, where we think we can meet the TSS50 reduction based on the data we've seen here. So new assets that we can add now to the portfolio, continuing our long legacy of treating MDS and CML and AML.

And then when we look forward, the 30% -- 30-plus high-value assets that we have in the portfolio, very excited both for the Phase II and III assets, but also a number of Phase I assets that we think can continue to show our replacement power, replace our sales and drive growth. And I'll go through these in a little bit more detail on the pipeline-specific charts in a moment.

I did want to note as well that from a BD&L standpoint that over 10 of these assets have been licensed or acquired in the last 2 years. I think that shows how active we've been on the BD&L M&A front and certainly at a conference like this, we want to continue to look for the best ideas that fit with our therapeutic area priorities as well as our platform priorities to enable us to be successful in the long run.

Now turning to each therapeutic area. In turn, in cardio, renal and metabolic, I think, an exciting portfolio that's underpinned both by our work in cardiovascular risk reduction on the back of Leqvio and pelacarsen, trying to move further with siRNAs to more infrequently administered medicines as well as a portfolio of assets in the renal space, I think, we are quite excited about as well.

I would also say in the early phases of our research portfolio and early clinical portfolio, a number of assets targeting arrhythmia, which we think is a significant opportunity, high unmet need, difficult science. But if we're successful, can certainly help us with our long-term cardiovascular positioning. And seven Phase III readouts in this portfolio between now and 2030.

Now three assets in particular, I wanted to say a word about, first is abelacimab, which is our Factor XI inhibitor for thrombosis. And you can see very good data that we had in AZALEA. This is a study that is now enrolling in Phase III, we hope to get the readout over the course of this year or the early part of next year. It's an opportunity for us to tackle a very large patient segment. These -- 50% of these patients don't reach their goal in terms of prevention of future events. So I think a really exciting program there.

We also brought in an anti-IL-6 for reduction of inflammation, residual risk in patients who are -- immediately post a cardiovascular event. And lastly, farabursen, our microRNA to tackle adult polycystic kidney disease, which gives us an opportunity to take on a relatively prevalent genetically-driven disease of -- kidney disease, 160,000 patients in the U.S. and estimate 400,000 to 500,000 patients in our target markets, and with very promising Phase Ib data. And hopefully, if we had very strong efficacy in our Phase II study, an opportunity to file off that data set.

Now turning to immunology. I've spoken a lot already about it. But clearly, Rhapsido is incredibly important now for the outlook of the company. We already had the approval in CSU. The CIndU readouts will happen in 2026. The opportunity to expand into hidradenitis. We had very good data in food allergies. So we'll also be taking it in food allergy. And then we also have a number of Phase II programs as well to expand Rhapsido over time.

Ianalumab with the opportunity to clearly be a very significant medicine in lupus nephritis, SLE on top of Sjogren's disease. And then I'll say a world about YTB in a moment because clearly, our focus on being a leader in immune reset is one of the pillars for us in immunology in the long run.

So just to say a word about that, T-Charge is our rapid CAR-T platform now, where we showed very compelling data in SLE, in lupus nephritis last year in the first 24 patients treated. I think remarkable efficacy where we really see across disease domains, a return to normal biology for these patients with the only residual impact being damage in the kidney that's already happened and difficult to reverse.

So we've entered now pivotal studies on a pretty broad range of indications, as you can see here. We would expect readouts to start to happen in the 2027-2028 time period, alignment with FDA that those Phase IIb readouts can be the basis of submission with confirmatory data to then support us longer term. And then earlier phase programs ongoing in areas like relapsing MS, primary progressive MS, myasthenia gravis, rheumatoid arthritis. So this is really a platform we plan to build out across the full gamut of severe immunological disease.

And then also recently, we brought in a high-affinity IL-15 monoclonal antibody that we're excited about, at least the early data would indicate to us this has a significant potential. This could be another pipeline and a drug opportunity for the company. We have an atopic dermatitis study ongoing, a number of other derm studies now in planning, so an opportunity for us to have a next important innovation in immunology.

Now turning to neuroscience, here, I think, what I'm really pleased about is how we've built significantly more depth in our neuroscience pipeline and portfolio. As you know, we've been a leader in MS for a long time now, 20 years. And clearly, on top of Kesimpta, we have the opportunity to life cycle manage Kesimpta to less frequent dosing. But remibrutinib gives us the opportunity now with a clean liver profile, already established efficacy in CSU with the readouts coming, hopefully, an opportunity to have another pillar medicine in MS.

We're also studying remibrutinib in myasthenia gravis and also bringing iptacopan as well in the myasthenia gravis. Separate from that, a very, I think, broad portfolio and exciting portfolio in neuromuscular disease. That's on the back of some of the recent acquisitions that I'll talk about as well. But certainly, Kate Therapeutics, an opportunity to bring in gene therapies. We have now the siRNA portfolio with Avidity, which we hope to close, as I mentioned. So exciting opportunity there. And then of, lastly, neurodegenerative diseases.

Now just to say a word about the Avidity acquisition. This is a slide we showed immediately after the acquisition, but an opportunity to address three very high unmet need diseases with the first-in-class therapy for DM1, for FSHD and for a subtype of DMD, exciting data that I think will play out over the coming year or 2. 80,000 patients with DM1; 45,000 to 80,000 patients plus with FSHD. And one of the things we expect is as we get drugs that ultimately can help these patients, diagnosis rates will likely increase as well. So the opportunity here could certainly be even larger than what we expect today.

And then lastly, turning to oncology. Here, our story is very much to build on the strength of Kisqali as well as our work with Pluvicto in prostate cancer. At the top of the chart, you can see the depth of the efforts that we have to ensure that we can continue our breast cancer leadership into the 2030s and beyond. Broad efforts in CDK2, CDK4, radioligand therapies, which I'll talk more about in a moment. Pluvicto as well, moving through its various indications and then the opportunity to expand further within prostate cancer, both with actinium as well as with oral agents.

And then an ongoing effort to try to expand into cancers that are not well addressed. So this includes cancers like colorectal cancer, prostate cancer, cancers of the central nervous system. And that's something we want to continue to be aggressive about because clearly, we see the opportunity is to start to address those areas of high unmet need.

Now just to say a word of where we are on the radioligand therapy platform. You can see here the various targets at the top that we're currently pursuing in the clinic. So these are all in the clinic today. And the opportunity to address a broad range of cancers. So clearly, prostate cancer, but neuroendocrine tumors, breast cancer, lung, PDAC. And then a number of efforts ongoing with undisclosed targets to -- we think have the opportunity to address multiple tumor types.

So 16 programs now in the clinic, 22 preclinical RLT programs. We have both lutetium and actinium capacity now within the company. We continue to believe depending on the target, there is the opportunity to get a stronger therapeutic index versus antibody drug conjugates and hopefully drive better efficacy over time with combinations. And as I have already mentioned, a $28 billion opportunity.

So just -- a congress like JPMorgan, a conference like JPMorgan, important to recognize all the great innovation that's happened externally that we've been able to bring into the company through our efforts. So you can see here the full range of deals we've done in the last year. So very excited about that, and we want to keep that going in the year to come.

And I wanted to close as well by just mentioning that our company continues to be a leader in ESG. We take this seriously. It's who we are as a company. ESG and global health are fundamental to what Novartis does. And you can see very strong rankings across the board, leaders index in many cases, both of our sector or across any sector. And in global health, we've delivered last year, two incredibly important breakthroughs, which matter a lot to me personally. Coartem Baby was launched in Ghana. I was there in Ghana for the launch. It's the first malaria treatment ever for children under 5 kgs. And then we had the first Phase III readout of a novel drug to treat malaria since our last readout of Coartem over 25 years ago. So another incredible breakthrough to be able to treat resistant malaria across the world.

So in closing, very strong results. You can see that the numbers, I think, speak for themselves. The growth profile remains attractive. We're confident in that 5% to 6% growth through 2030, the 40% core margin in 2029 and beyond. And then lastly, the strong pipeline that we have and the 15 potential submission-enabling readouts and the 30 potential high-value assets that we have to drive our growth in the long run.

So with that, I'll move over to Richard. Thank you very much.

Are there any questions in the room, first of all? I mean, I can't see any. Maybe -- please put your hand up if there are. So maybe first -- sorry? Okay.

First of all, maybe the 5 to 6 percentage CAGR, when your -- the slide you put up seemed to suggest a long -- a large proportion of that would be realizable within market brands. So how should we think about the risk adjustment taken on the pipeline and the relative contributions there?

Yes. I mean I think when we look at it and we see the strength of the in-line portfolio that we already have with big brands like Cosentyx over most of this period, but certainly Scemblix, Pluvicto, Kisqali, Leqvio as well performing very well. So we have the opportunity with those, I think, to really have a strong foundation.

And the pipeline really gives us the optionality to outperform. But when we look at the opportunities that we have, Rhapsido is already in hand, ianalumab already in hand. I think we just need one or two of the remainder to hit to have the opportunity to even beat that 6%.

Yes, makes sense. Maybe on one of the in-line brands, Kisqali, you mentioned the $10 billion peak sales. We've seen data from the oral SERDs in this space. Maybe your thoughts on how all that impacts the $10 billion, if at all?

Yes. I think when we look at it, it doesn't -- first, it does not affect our outlook on the brand. I mean we're very confident that Kisqali on its own, compelling proposition. And really, our job now is to ensure we generate data with Kisqali with each of the relevant oral SERDs. And we're doing that. We have -- are pursuing agreements or plans to generate data with each of the competitor companies that have oral SERDs. Because we think the way the standard of care will evolve is that for the backbone endocrine therapy, an oral SERD, will be an opportunity to do something other than the standard hormonal therapy that's used. And then you need to add a CDK4/6 on top. And a lot of that is going to depend on managing the safety profile. So I think generating that data is our #1 priority, but doesn't change our outlook for Kisqali.

Makes sense. You mentioned Rhapsido as well in hand. Obviously, just being launched. Maybe you could give us a little bit of color of the early stages, what the reaction has been.

Yes. First, early days, and we wouldn't expect, I think, significant sales pick up until mid-2026, but I think the feedback from physicians has been very positive. So this is a medicine where we saw in the clinical studies, resolution of -- or the beginning of resolution of symptoms in patients with hives or flares within 2 weeks. The anecdotal feedback we're getting is that within 1 or 2 days, many patients are seeing resolution of symptoms.

And I think that in that context of patients who are highly symptomatic with a highly efficacious drug, we're seeing high demand from physicians in terms of patient start forms, many of the things that we track in order to give us confidence in the launch dynamic. And I would say, in general, our experience is that when you have highly symptomatic diseases with high efficacy in a very short period of time, that's a strong recipe for a very strong launch because we saw that, as you will remember, once we could actually get patients to understand the symptomatic benefit of Entresto, Entresto started flying. And I think that we have that kind of opportunity with Rhapsido.

And the other indications like CIndU, food allergy may be different. But are you seeing that same in your data, the speed of onset is and resolution?

I think in these inflammatory conditions, certainly, CIndU like CSU, we certainly see a very rapid impact. I think it'd be interesting to see with the MS data -- of course, as well, it would be nice with hidradenitis because I think, certainly, the IL-17s -- with the TNFs and the IL-17s, there's a lot of efficacy still on the table for HS. I think either our drug or the competitor drug, this is not leading to significant improvements for these HS patients. So if Rhapsido could do that, then I mean, that's another $5 billion-plus market that this medicine could address. So really exciting.

And do you think of combos with Cosentyx there in terms of Rhapsido? Do you think does that make sense?

I think as you know, in immunology, the hard part with combinations has always been stacking side effect profiles and things. So -- and I think, obviously, with Cosentyx life cycle where it is, probably it'll be difficult. I think the good news with Rhapsido is thus far, as you know, we've seen no liver -- we've seen no liver signals, very clean safety profile. So I think we're in a good spot.

Excellent. Maybe on RMS, just -- we've not seen huge data outside of the company. What gives you the confidence in RMS? We've obviously seen mixed data in the -- from the competition here.

Yes. I think we have to be humble here. I mean I think we have to say that we haven't seen any data on our own, right? So I think we're basing our confidence off of what competitors have seen with their BTK inhibitors. Clearly, top line now from one of our competitors stating that they hit their endpoints both in PPMS and RMS. Certainly, the data from another one of our competitors in non-relapsing SPMS. So all of that would indicate that BTK inhibitors are active. I think now it remains to be seen how active and what the clean -- do you have the right safety profile.

I mean I think notable to me is what was said in the recent CRL from FDA, which I think points to how carefully FDA is looking at liver signals for these medicines. And we have a BTK inhibitor that's already licensed with a label that's clean on liver. And so that gives us a huge opportunity to differentiate if we can show the efficacy benefit.

Maybe a couple of -- we have a few questions here at the front. I think this may be this gentleman here who is first.

[indiscernible] First, congratulations for continuous efforts on ESG front because malaria is an important effort for the population. My question is actually focused on oncology, in terms of diversification in terms of modality. I think kudos to you, the RLT as a modality has now become a very important pillar in oncology. But on the other modalities, it didn't seem to be there is a lot in the portfolio. I would love to see your view on that.

Yes. Thank you for the question. So when we think about our oncology pipeline, we think about trying to ensure we have depth across small molecules, bispecifics, RLT and ADCs. It doesn't always work out that we get there at the same time. But certainly, our concept is to have compelling options in each one of those therapeutic areas.

I would say right now, a lot of depth in RLTs, the history of the company is very strong in small molecule drug design. So I think when you look at our ability to have CDK2, CDK2/4, CDK4, two CDK2/4s, so we're really covering our basis on the small molecule side. I think two areas we're very interested in improving our depth are clearly bispecifics and ADCs, where we don't have a compelling position. And those are -- that's something we're certainly looking at actively.

There's a gentleman with three over there. And then...

Vas, [ Angus Liu ] from Fierce Pharma. Also on oncology, so of course, Kisqali is doing well. But if you look at Novartis' late-stage oncology pipeline, 15-plus submission-enabling readouts in some of the Phase III, Phase II programs, beyond a lot of excitement coming out of the oncology pipeline, granted this is from -- after [ NATALEE ] and PSMAfore, but it is -- and last time I check, I think you still don't have a permanent oncology R&D chief. So is there -- is this kind of you're taking a break from oncology late stage? Or is there a plan to kind of fill that gap?

Is this an upcoming article, Angus? Or -- so no, there's no break from oncology. We actually just brought in an incredible clinician, Mark Rutstein, who's in now to lead our oncology portfolio, outstanding PhD clinician, scientist. So we have the right leadership team.

When I think about it, often you have in therapeutic areas, these things come in waves. I mean, we -- you have to remember, we just had Scemblix, Pluvicto and Kisqali which combined, could have $20 billion of peak sales. So now when we -- before we declare a big challenges for Novartis Oncology, the fact that we were able to generate three drugs with $20 billion of peak sales, is a reasonable outcome.

And so I think we're in a period now where we need to reload. And I think some of the key things we'll have towards the end of the decade are readouts on a lot of the RLTs, on the small molecule oncology pipeline and as I mentioned, the bispecific portfolio. So -- but I do think we need to have more strength in oncology, there's no question. I mean -- and that's going to be an active focus for us from a BD and M&A standpoint.

I'm [ Veenu Aishwarya ] with AUM LifeTech and AUM Biotech. We have an antisense platform for drug discovery. So being a small biotech in Philly, we are leveraging a lot of AI right now to advance drug discovery. I'm just curious to know your thoughts, someone like Novartis with all the resources in the world, how are you leveraging AI for drug discovery? And do you have any thoughts for smaller biotechs so that we can advance drug discovery development and partner up with you guys faster?

Yes. I think AI is something that now has become a part of the toolkit now for both target -- certainly for target identification, target optimization, I think we'll -- candidate optimization. I'd say certainly from a drug target standpoint, we'll have to see how AI pens out. The way we think about it is having deep partnerships. So we have the partnership with Isomorphic Labs for the Google DeepMind team. We have the partnerships with companies like Schrodinger and Generate:Bio. And those all just become standard toolkits for our biologists and medicinal chemists in terms of optimizing any candidates that we have.

And so I think we're open, I mean, to any partners who can come to us with good ideas on ways to enable this. Because our vision would certainly be on average now from when you have a target that you want to prosecute with a drug to when we get it into the clinic, it's about 4 years on average in this industry. So how do you get it down to 2? And how do you increase the probability of success of that effort significantly? Because as you know, now it's quite low. And then, of course, in the clinic, can we optimize trials, et cetera, is also a high interest for us as well.

Your confidence in ianalumab and the potential seems to have grown even since the data, so -- in Sjogren's. So maybe you could just talk about what's leading to that increased confidence in Sjogren's and also the potential of the asset beyond.

When you look at a disease like Sjogren's, the second most prevalent rheumatological disease without any real disease-modifying therapy available. And most of these patients, of course, are on high levels of corticosteroids, challenging quality of life. This is an opportunity, I think, to completely reshape a whole sector.

So I think when we look at the data across NEPTUNUS-1 and 2, when we look at the pool data, important domains that matter to patients, things like salivary flows, things like lymph node size, where we see important benefits, and I think that's going to be very compelling. But I think the reality is a lot of the launch is going to be physicians trialing the drug, and they are going to begin to identify which patient profiles benefit most from ianalumab. We'll learn as well then which patients to be targeting with our field force and our marketing efforts. And I'm confident there'll be a significant opportunity there, even if it's only 30%, 40% of that patient population just because of the sheer size of the patient population.

We've had a couple of questions from the web. So first one is on zigakibart. So the person is saying, it's a disease-modifying therapy. Could this become a blockbuster asset, question.

Yes. We think zigakibart has a multibillion-dollar potential. I mean I think the challenge here is going to be in a setting where there's four agents coming forward, all with compelling proteinuria reduction, unclear eGFR benefit, how do you position it. And the way we think about it is to focus very much now in eGFR. Our proteinuria reduction looked very good. We also think from a safety standpoint, the fact that we target APRIL without BAF, I think it could be ultimately a safety differentiator. But a lot of this will come down to the eGFR data and how robust that eGFR data is and then your ability to use this in combination.

I think the future of IgA nephropathy therapy is going to be combining in the appropriate way for the appropriate patient, a vascular agent, a complement agent and an IgA-targeting agent. And figuring that out is now the ball game. And the good news for us is we have all three and hopefully, we'll get all three approved, and that will enable us to generate the data to help physicians navigate that.

And on Fabhalta and Vanrafia, how are you seeing the uptake in IgAN?

So I think as you saw already in quarter 3, very solid uptake. I mean I think these will be steady growers. Certainly, with Fabhalta, we see that in PNH, C3G, now with IgAN, Vanrafia as well. I think what will be important as well for those two assets is the eGFR data. And I think we are -- we will be disclosing the eGFR data for Fabhalta soon. We should get Vanrafia data in the coming year. And I think that will give physicians even more confidence to ultimately prescribe these medicines. But so far, so good on the renal portfolio.

Makes sense. We've got another one from the web, which is on business development. And so they're just asking, in today's competitive biotech landscape, how do you position yourself within deals in your overall portfolio strategy in terms of risk diversification and value creation?

Yes. I think, we, of course, are always looking for opportunities that fit in our core therapeutic areas or fit with these technology platforms. I think what differ differentiates us, I'm sure every company thinks this is you have to have deep scientific expertise that allows you to have a differentiated view on an asset. I mean we have, I think, outstanding people, expertise within neuromuscular disease, which allows us to build conviction to do a deal like Avidity, to do deals like Kate, DTx. If you actually look at the history, we've done now four deals across neuromuscular, treating diseases with poor standard of care in neuromuscular disease. And that's based on real deep expertise.

Similarly, in cardiovascular risk reduction, we've been at this a long time. We, of course, with the CANTOS study, understood that biology, so then doing an IL-6 deal, doing deals like Anthos make a lot of sense. So I mean that's the recipe. There's nothing else to it. I think we tend not to be the company that wins the very aggressive auctions. But I think when we have a differentiated view, we'll go after it.

And you mentioned, again, considering share buybacks, and you obviously have significant R&D spend as well. Maybe you could talk about the free cash flow and the capital that allows you to do that. So that you can -- not have to prioritize necessarily one thing over the other?

Yes. I think for us, obviously, with the free cash flow where it is, approaching $20 billion, we're in a position, a very luxury position that we're not capital constraint in terms of the deal sizes that we can look at. I think it's much more strategic fit, scientific fit. That's what has to really play out.

Certainly, we also look at R&D expense. I mean, I think, of course, our R&D budget growing now $11 billion, $12 billion over the coming period, significant R&D spend. And so of course, you have to absorb the R&D spend, but certainly not capital constrained. It's really finding assets that make sense, which is why we've moved away from even providing target ranges in terms of the size of deals. We want to do deals that make sense, and we have the capital to be able to do that.

And you mentioned upfront the 100 to 200 basis points of margin contraction around Avidity and around -- into what -- this year. What's encompassed in that beyond? That -- we've had a lot of sort of health care reform, there's IRA, all sorts of things going on.

Yes. All of our guidance already takes into account the recent agreement we signed with the administration on Most Favored Nation. And that's primarily driven by the Medicaid component and then, of course, the impact on ex U.S. launches. But that's certainly all factored in. We also factor in the fact that we assume IRA inclusion of Cosentyx and Kisqali in 2028.

Now importantly, for that, interestingly, given that both Cosentyx and Kisqali certainly in the eBC setting, is not a very Medicare-oriented population, but the spillover affected to Medicaid and 340B is where you see the effects. And I think it's always important for investors to look at spillover on best price whenever you're looking at IRA pricing. But that's all factored into the guidance. And so that gives us, I think, a high degree of confidence now looking ahead.

Makes sense. Makes sense. Maybe a last question, just to return to one of the growth drivers. Pluvicto has been -- you've got a new indication. We'll then see a new indication in the Addition study maybe this year as well. How do we think about the cadence of adding those new indications to boosting sales?

Yes. As you saw with VISION that we had PSMAfore, now we're on a strong trajectory, and we upped our guidance there on Pluvicto, very confident in that $5 billion-plus outlook for that medicine. And I think with PSMAddition now, we'll see that next opportunity. And probably after that, getting into the earlier stages of all -- metastatic prostate cancer will take a bit longer. But in the meantime, we're going into pivotal studies as well or already started the pivotal studies with the actinium PSMA.

I think more important even than the Pluvicto performance is we believe now we've established RLT in the community setting in the United States, which was an incredibly important unlock. It was a 2- to 3-year effort. I give tremendous thanks to our U.S. team and working so hard at that. But now we have over 700 centers that are able to prescribe RLT and growing. We have figured out those patient pathways. And what that opens up is for the whole future pipeline of RLTs at Novartis, we have the ability to launch these medicines at scale. And that took time with Pluvicto, it shouldn't take as long for the next wave of positive readouts.

Perfect. I think we're out of time, unfortunately. Thanks very much, Vas.

Thank you very much, Richard.

Good morning and good afternoon. Welcome to our 12th Annual Social Impact and Sustainability Event. Before we start, I would like to quickly read our safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that, respectively, were filed with and furnished to the U.S. Securities and Exchange Commission.

Now to officially open our event and set the stage, I'm pleased to hand over to Steffen.

Thank you, Mavic. Welcome, and thanks to everyone online for joining us. My name is Steffen Lang, and I'm the President of Operations. We have prepared a full agenda for the next hour. First, we have Lutz Hegemann, who is our President of Global Health. He will cover our progress on our global health pipeline, including recent milestones in the fight against malaria. Then we'll share a fireside chat, which recently took place between Sujata Vaidyanathan, our development Head for Global Health; and Martin Fitchet, the CEO of Medicines for Malaria Venture, a key partner of ours.

After that, we will have Korab Zuka, our Global Head of Social Impact and Chief Sustainability Officer who will cover some of the innovative work we are doing to expand access to innovative medicines to medically underserved populations in high-income countries. Finally, I will cover environmental sustainability and then proceed to Q&A.

As we get started, I think it's important to anchor in our company strategy. Novartis has evolved from a diversified health care conglomerate into a pure-play innovative medicines company. We remain fully committed to executing our focused strategy and our strategy remains unchanged. We have defined 4 core therapeutic areas, each with strong science, clear unmet need and significant opportunity for growth. And we continue to invest in 5 technology platforms, particularly advanced platforms like radioligand therapies RNA and gene and cell therapies, which we believe will shape the future of medicine through 2030 and beyond. And finally, we remain committed to being a truly global leader serving all major markets worldwide while maintaining focus on 4 key geographies: U.S., China, Germany, Japan.

Our priorities are clear. We aim to accelerate growth and deliver returns by bringing high-value medicines to patients with launch excellence. At the same time, we are focused on strengthening our foundation, unleashing the power of our people scaling data science and technology and building trust with society by driving social impact and sustainability. We have stayed the course on our commitment to social impact and sustainability, and we will continue to do so regardless of external factors.

Also, execution remains central. We are delivering through operational excellence driving efficiency and agile resource allocation and continuously improving R&D productivity to ensure sustainable growth and impact. On the next slide, please. Our social impact and sustainability efforts directly support our strategy and long-term value creation. We focus on 3 strategic pillars: Global health innovation. We are committed to finding breakthroughs for diseases often neglected by science and ensuring innovative medicines reach communities in low and middle-income countries. This is about expanding access where it's truly needed most.

Second, inclusion and access. We embed access principles across the entire research, development and commercialization continuum, actively working to close equity gaps by reaching underserved populations. Third, environmental sustainability. Protecting human health also means protecting planetary health. We have strong environmental commitments to reduce our footprint and preserve resources for future generations.

Underpinning these pillars are 2 foundational topics. First, ethics, risk and compliance. We maintain the highest standards of ethical behavior and regulatory compliance across the value chain. Second, culture and people experience. We are building a workplace where everyone belongs and thrives while preparing our talent for the future and offering fair competitive rewards.

In short, these initiatives are not separate from our business. They're integral to how we deliver sustainable growth and long-term impact for patients, society and our shareholders. To dive deeper into our first strategic priority, global health and innovation, I am pleased to invite Lutz to share more about our global health pipeline.

Thank you very much, Steffen. Hello, everyone. I'd like to say a few words about our global health innovation, if we can move to the first slide, please. Then I would like to highlight that at Novartis here, we use the entire continuum that we have from drug discovery, development, delivery and of course, also operations in order to support the global health pipeline as much as we would use that continuum for any other disease area.

And let me highlight that in California, we have a dedicated drug discovery team under the leadership of Thierry Diagana, who specifically focus on infectious diseases, sickle cell disease and other neglected tropical diseases.

The development unit under Sujata Vaidyanathan, who will be in a fireside chat later in this program. Then of course, the operations team that essentially produces millions of tablets, particularly for malaria. And then our delivery team, including our dedicated team that we have in Sub-Saharan Africa serving the disease endemic countries. And those teams have access during discovery and development to the whole array of different technologies that we would use for any other disease area as well.

On the next slide, we see how we are looking at the diseases that we are focusing on in global health. And the WHO, the World Health Organization has a list of diseases that do not have adequate therapies available. We see that about 2 billion people struggle to have even access to basic medicines and more than 1.5 billion people suffer from neglected tropical diseases. And we have seen recently, particularly as a consequence of climate change further spread in those diseases and an increase in the disease epidemiology.

And those diseases typically affect underserved patients, patients who are living in countries which are characterized by fragile health systems and where the triple burden of disease is felt particularly hard. With that, I mean that we have an unfinished agenda in infectious diseases. We have a rise in noncommunicable or chronic diseases. And then we often also see epidemics who put an additional burden on those health care systems.

We decide when there is an unmet need that is acknowledged also externally, for instance, by WHO. And we have the scientific capabilities to address those diseases. That, for us, is a call to action and a disease area that we would then target. And we see that the unmet medical need in those disease areas is quite pronounced. We see either in diseases, emerging of resistance that is particularly the case for malaria or we see that toxic or poorly effective treatments are available as we see for other parasitic diseases like [ Chagas ] disease and leishmaniasis often medicines that were developed 50 or 60 years ago and that do not meet the current standards of quality, efficacy or tolerability or we even have diseases where treatments have never been developed like dengue fever or some other emerging viral diseases. Typically, those would be the viral diseases where we also see a rise in the epidemiology of those diseases.

On the next slide, you see the pipeline that I'm always very proud to talk about because when I started in development more than 12 years ago, there was -- this pipeline was essentially empty. And now through the great work that our colleagues in drug discovery and development have made you see that we have quite a number of different disease areas that we tackle and drug candidates that we are advancing through the different phases of development.

We are currently running 11 clinical trials, which involve 14 low- and middle-income countries. And we believe that once we advance this pipeline, we have a very good portfolio of new drug candidates that address those diseases that I spoke about just earlier.

The next slide, please. Let me now take a deeper look into malaria, which, as you know, has been a focus area for us for many years. Currently, artemisinin combination therapy still cures malaria and we shouldn't forget about that because it is still a life-saving medicine, but we see those early signs that make us worry because those signs have over the years always led later to a full flash resistance which then has dire consequences as we see some estimations here that we will see millions more malaria cases, more hospitalizations and about 80,000 additional malaria deaths annually. And that is what we need to avoid and this has been our focus for the last 10 years to develop a non-artemisinin combination therapy that addresses the need in malaria even when resistance is on the rise.

And then we see also now the effect of climate change, which will essentially lead to a wider spread of malaria into areas, for instance, like Southern Europe, which have long eliminated malaria. And of course, that will only exacerbate the burden of the disease, together with the resistance that we are facing.

On the next slide, we see the different needs that's been highlighted for new antimalarials. And I just mentioned the need to address the threat of resistance. But of course, we always strive to also simplify dosing current antimalarial therapy is a 3-day treatment course with twice daily dosing. Now for the new antimalarials we'll have a daily dosing, but we are trying to further reduce also the treatment duration. And then one important element is the transmission blocking whereby we aspire to not only treat the patient, but also make sure that the patient cannot transmit the malaria then through the vector to another person, which currently requires a different medicine to be taken on top of the treatment.

And the idea here would be to find antimalarials that have the ability to also block transmission. And we have 2 candidates who demonstrate that at least in vivo and now most recently for ganaplacide. Then we also need to look beyond falciparum malaria and look at vivax, which is particularly prevalent in countries that have almost eliminated Malaria, where we are developing single-dose exposure radical cure approaches.

Now on the next slide, let me go a little deeper into KLU156, which is our most advanced new antimalarial. We've just published and presented the data of the confirmatory Phase III trial at the American Society for Tropical Medicine and Hygiene meeting in Toronto. And we see in this large trial that the medicines works, and it works remarkably well with a cure rate of close to 100%. And this drug candidate is effective in killing the parasites, even parasites with mutations, but also addresses the gametocytes, which are those stages of the parasite that would then transmit the infection to other patients.

So we have essentially 2 benefits here that are being conveyed by this one drug candidate. It should be noted that this wasn't easy to get to that stage because we screened 2.3 million molecules in our library to find ganaplacide. And we also reformulated lumefantrine, which is currently the combination partner in our current artemisinin combination therapy so that it can be administered only once daily.

Next slide, please. So in closing, you see the malaria commitment that dates back more than 25 years ago. And in 1999, we launched the first fixed-dose artemisinin-based combination therapy. We have now surpassed 1 billion of these treatments globally. We introduced a pediatric formulation, but we continued. We only this year have a Coartem Baby formulation that was introduced, there was no treatment for newborns and babies up until now. And now we are coming with the next generation of chemical entities of new antimalarials to address resistance and some of the other needs that I had highlighted earlier with future introductions. So we'll continue to stay our course in malaria.

That brings me to the end of my quick overview, and I would now like to invite Sujata Vaidyanathan, our Development Unit Head for Global Health; and Martin Fitchet, who is the CEO of MMV, the Medicines for Malaria Venture and the long-standing collaboration partner to hold the fireside chat. Thank you.

I'm here with Dr. Martin Fitchet, CEO of Medicine for Malaria Venture, a product development partner in the antimalarial R&D space. Martin has been in the pharmaceutical industry for quite some time and he's worked here at Novartis. He's covered multiple therapeutic areas with a focus on global health and public health at J&J, where he covered end-to-end focus on R&D and access. Martin, it's really a pleasure to have you here with us.

Thank you very much. It's great to be back in Basel.

Indeed, you were here at Novartis many years ago.

I just walked past my old office.

Excellent. Excellent. So we saw you recently in Ghana for the Coartem Baby launch, quite exciting for us. We had Vas join us as well for the launch. Would just love to hear your thoughts on just the Coartem Baby formulation, the development, our partnership. And the launch as well.

So what an incredible event, thank you very much for the invitation. It was an honor to be there. This was an extraordinary program. And I think -- it really illustrates the concept of partnership in global health in getting a very, very difficult job done. So there was one evidence gap in malaria, and that was the efficacy and safety of antimalarials in children under 5 kilos. It hadn't been studied and with enormous credit to Novartis you decided to create the new formulation for this very young and vulnerable age group and study it to prove that it works. Many thought this study in such tiny vulnerable children under 5 kilos couldn't be done. But with the partnership with global partners around the world, including doctors, health workers and families in malaria-impacted regions, we got it done. And it was an incredible feeling. And I will never forget the day I think it was in July when the product was approved. And the announcement came out that this was approved.

It took the world by storm. It surprised us all how incredibly welcome this news was I think in a very difficult world right now, I think people saw this as a really important story of a company, nonprofits, government, doctors, families, nurses getting together to solve a very difficult problem because the most vulnerable children needed that data, and we needed to understand how to treat them with this new product, and it was successful. And I'd just like to say thank you to Novartis and congratulations for leading that.

It's really a humbling experience to be part of that, to be able to bring that medicine to the most vulnerable patients and couldn't have been done without the collaborations and partnerships that you mentioned. So thank you so much.

We're so proud to partner with Novartis, and we look forward to many, many more innovations in the future.

With over 25 years of experience in R&D and global health, what do you see as the most persistent or complex challenge in advancing global health outcomes?

So a challenge, where to start. Perhaps we can talk about malaria as a good example. So if we think about malaria. In any 1 year, 0.25 billion people are infected. 600,000 people will die in that year and around 75% of those are children under 5. It's a massive public health challenge, catastrophic to families, catastrophic to communities. So what to do? Innovation is really the long term and the only answer to getting ahead of malaria. And the reason for this is because it's caused by a parasite that parasite is very widely and highly adaptable to current treatments, meaning it adapts to become resistant to those treatments. So we have to continually think ahead of the parasite, -- we have to beat it with urgency with new medicines that have a high barrier of resistance and new mechanisms of action that can be used to treat the malaria parasite even as it adapts. And then we have to think about eliminating the disease. So many challenges. So the only way to do this is innovation. And the core of that innovation is innovation of pharmaceuticals, medicinal R&D. Now you and I know, I'm ex Novartis. We both worked in this area for many years. R&D for medicines is extraordinarily complicated, has to be executed to an extremely high quality. The science is extremely important to get right and to be at the highest level of thinking. And add to this, the need for these new medicines to also be accessible and affordable, that's a real challenge. But I'm really happy to say that I think we can get there. So allow me to give some history as to how we came into being and how we came to be partners with Novartis and how we came to rise, I believe, to this challenge that we're facing.

So MMV was formed about 26 years ago. We came out of what was called the chloroquine crisis when the only real effective drug for malaria, chloroquine, became pretty much useless as the parasite adapted to become resistant to it. So through the '90s, mortality climbed until you got to about 1.2 million deaths per year because the treatments just weren't working anymore. Governments, pharmaceutical industry, WHO got together and created our organization medicines from malaria to drive and forge partnerships, global partnerships to drive innovation to develop new medicines. Now about the same time, Novartis was coming forward with the new generation, a revolutionary new medicine for malaria, the next generation after chloroquine and it was called Coartem and it contained a revolutionary new agent called artemisinin. And this has been the mainstay of treatment for malaria for the last 25 years. We've been fellow travelers with Novartis for a quarter of a century, and we've been close partners now for 20 years. It's been an incredible partnership, delivering new medicines, new formulations and I think we'll talk a little bit later about a really exciting new dawn in innovation as well.

But this innovation is, as I said, it's extremely expensive and complicated and has to be driven through true partnership. And at the core of it, has to be a company with vision, with scale and scientific expertise to lead the development, and I'm really delighted that Novartis is so committed to this fight.

And I'm glad we're able to contribute and collaborate Martin. So maybe we talk about something that we saw recently where we saw encouraging clinical trial data from the ganaplacide lumefantrine combination, part of our innovation pipeline for antimalarials. In your perspective, what makes this innovation significant in terms of our fight against malaria. So would love to hear your thoughts.

It really is a fantastic data. I think it's been released a little bit. So I think I can talk about it slightly. So we saw very, very good efficacy at least as good as current standard of care. But we also saw indicators that this new mechanism of action is going to have a high barrier to resistance. As I said, the big fight is staying ahead of the parasite ability to adapt and become resistant. So this is a huge advance. And it looks like it has transmission blocking properties. This is game-changing. So think about what I talked about with the failure of chloroquine and then Novartis coming in with Coartem and the next generation 25 years ago of the artemisinin containing drugs.

We're seeing partial resistance already developing to this class of drugs, the artemisinin drugs. We're seeing our delayed cures. We're seeing some franc failures. And history and biology tells us, eventually, we'll be in the same situation with the current class of drugs as we were chloroquine. So having ganaplacide lumefantrine as a brand-new product with a brand-new mechanism of action designed to stay ahead of the parasite ability to adapt and become resistant is going to be an incredible advance.

No, we're excited about the data as well. How do you see the future of malaria innovation? And what do you think we can achieve together with these partnerships?

So at the beginning, I talked about this huge massive burden of disease goliath of a disease, the impact it has on communities, 0.25 billion infections. 600,000 deaths per year, most of them very young children. Even in that context, I think we can be cautiously optimistic and allow me to tell you why. So I think we're entering a golden new age of innovation for malaria, not just to treat malaria, but also to prevent malaria and eventually to eliminate malaria. The reason we treat malaria and prevent malaria is to save children's lives, but we must always think about how do we use toolbox to eradicate this disease from the face of the earth.

I'm excited because we have ganaplacide lumefantrine, we just talked about that. And I know we're working together on a really exciting new platform, where we're combining that with a fast-acting new drug that has the potential to give what we call single-dose cure. So the ability that when the mom brings her baby to the clinic with malaria over a temperature, you can observe that baby getting that one treatment in the clinic or in the middle of the village, that baby has no more medicines they need to take, and they are cured as opposed to twice-a-day treatments for 3 days. That will be an extraordinary advance. And I think we are getting towards that realizing that vision. So that's cure. We're working with global partners where we're looking at new technologies to prevent as well as vaccines, we have long-acting injectable medicines where imagine one injection into a child's arm at the beginning of a season, one injection of a medicine prevents them for the entire season from getting malaria.

That's it, one supervised visit. Combine that with insecticide-treated net, and you can visualize a toolbox of advanced technologies that will really bend the curve of malaria and take us to this really, really incredible goal of elimination of malaria from planet Earth. Wouldn't that be incredible?

It's amazing, right? Just thinking about that future is incredible. Thank you so much for your valuable insights. We really appreciate the long-standing partnership with MMV and Novartis and look forward to continuing that journey with you. And looking forward to eliminating malaria.

Sujata, it's my pleasure, and we're so proud to be your partners.

Same. Thank you so much, Martin.

That was excellent. It's gratifying to see the strong relationships we've built with our partners who are critical to the work we do in social impact and sustainability. I'm Korab Zuka, I joined Novartis late last year as the new Global Head of Social Impact and Chief Sustainability Officer.

Today, I'll walk you through how Novartis is strengthening our social impact and sustainability strategy and in particular, our new inclusive health accelerators or as we call them [ IHAs ], will help us reach underserved populations in our priority markets. A key principle guides all of this. Disparities rarely come from a single factor. They're almost always driven by a mix of socioeconomic conditions, geography, insurance coverage and the structural capacity of the health care system.

To present how we are further evolving our strategy, I'd like to focus on our inclusion and access pillar as Lutz has already presented our global health work, and Steffen will talk about our environmental sustainability. Our access principles R&D, affordability and health system strengthening really remain the foundation for how we bring our medicines to more patients. They guide how we think about our trials, pricing approaches and how we work with health systems to improve access. We recognize that no single company can close the access gaps alone, which is why our approach is built on partnerships across the broader health care ecosystem.

As a company, we've already made strong progress through several initiatives like tiered pricing, emerging market brands and other efforts that expand access. The next step is to ensure our innovative medicines reach underserved patients in our priority markets. To do this, we've designed inclusive health accelerators, a structured model to reach underserved communities.

Over time, we will extend this approach to different markets so that Access really becomes fully embedded in how our country teams operate. Inclusive health accelerators, our strategic initiatives, they're built around the high priority therapeutic areas, really designed to identify underserved populations in specific markets and address key barriers to care along the patient journey. The idea is simple. Historically, Access was about low and middle-income countries. But we know that even in developed markets, there are underserved populations who are not getting our medicines. Entire segments of patients are falling through the cracks. So we developed a data-driven approach to identify these patients and expand our reach while creating sustainable business growth. We started by designing IHAs for the U.S. market focusing on prostate cancer, cardiovascular disease and breast cancer, and we plan to launch them using a phased approach in the first half of 2026.

Let me make this real with the example of prostate cancer. We started by looking at the patient funnel for prostate cancer. In the U.S., blAck men are nearly twice as likely to develop the disease. But when we go deeper into the patient funnel, the patterns, mirror, socioeconomic and structural factors in that men in low-income ZIP codes are less likely to have a regular provider, less likely to be screened and less likely to have access to PSMA imaging. As a matter of fact, we see a strike in disparity.

Black men are about 10% less likely to receive a PSMA scan. For context, a PSMA scan is a specialized imaging test that helps doctors better understand the type of cancer they're dealing with and actually decide if advanced treatments are appropriate. Without that scan, which has a positivity rate of almost 90% for metastatic castrate-resistant prostate cancer patients, they may never be able to identify as candidates for more advanced therapies such as [ radiopharmaceuticals. ] The gap in diagnostics is critical because it could be one of those factors contributing to the fact that black men faced twice the mortality rate from prostate cancer compared to white men. We found similar gaps in breast cancer where black women have 25% higher occurrence of elevated LP(a) levels. These gaps track closely with socioeconomic indicators, where a patient lives, the type of hospital they can visit, insurance status and availability of advanced imaging.

So we asked how can we make sure these patients are not left behind. Working together with the therapeutic area teams in the U.S., we map the barriers keeping these groups from accessing appropriate care. For prostate cancer, for example, black men are more likely to visit community hospitals than academic centers. and many community hospitals don't offer PSMA scans, plus community oncologists don't have a large referral network to forward patients to centers that could perform it. Based on the identified barriers for the 3 therapeutic areas, we designed solutions that could be clustered in 4 archetypes. The first archetype awareness and empowerment, focusing on community-based education and trusted local voices that built understanding of risk, screening and treatment, for example, faith-based campaigns that normalize screening discussions. The second archetype navigation and access, supporting patients move through the health system from screening to referral and follow-up such as community health workers, guiding patients to follow-up appointments.

The third archetype, provider readiness, providing training and tools that enable providers to deliver timely guideline-based and culturally competent care, for instance, virtual learning networks for clinicians in urban and rural areas. The fourth architype impact measurement and model expansion, leveraging both local data and shared learning that track results and scale the most effective solutions. We will work with local reputable partners to implement these initiatives and expand access to those overlooked populations. This approach not only brings together social impact and sustainable growth, but also strengthens Novartis' reputation and relationships with health care systems and communities, positioning us as a partner of choice in an era of increasing scrutiny and accountability.

As previously mentioned, we're building the inclusive growth accelerators in the U.S. first, taking a phased approach for implementation and starting with prostate cancer. We have plans to expand to other markets in the near future. For us, this isn't just about meeting social impact expectations. It's about supporting the redefinition of what sustainable growth looks like in health care, one that is measurable and deeply aligned with our purpose to improve and extend lives.

As we think about social impact and sustainability, it's also incumbent on us to think about our environmental footprint. Although pharmaceuticals are not the most carbon-intensive industry, we still have a role to play both in terms of climate risk mitigation as well as adaptation of our portfolio, building a climate-resistant pipeline that can tackle disease burdens exacerbated by climate change. I'd like to hand back to Steffen, who will share more about our environmental sustainability efforts.

Thank you, Korab. As nature becomes an increasingly important topic for our industry, we have updated our environmental sustainability framework this year. Previously, our framework focused on 3 areas: Climate, water and waste. We have now streamlined it into 2 pillars: Climate and nature. Our ongoing efforts of water and waste remain a key priority and are now included within the new nature pillar. In the following slides, we will share our progress against both our climate and major targets.

Here is a summary of our performance against our 2025 targets. These targets are part of our legacy commitments and the progress shown here reflects our performance as of third quarter this year. In the Q3 progress column, you'll notice that we have already achieved most of our 2025 targets. And for the remaining targets, we are confident to meet them by the end of this year.

Our ambition is to achieve Net Zero by 2040. And here is our transition plan. At the top, you will see our Scope 1 and 2 reduction plan and at the bottom, our Scope 3 reduction plan. For Scope 1 and 2 emissions, we have already made strong progress and continue to reduce emissions in line with our approved SBTi trajectory, aiming for a 90% reduction by 2030 and then maintaining it thereafter.

For Scope 3 emissions, we have reduced them by 13% versus 2022 baseline as of last year. Our target is a 42% reduction by 2030 and 90% reduction by 2040. Addressing Scope 3 emission is a key priority as the majority, namely more than 90% come from upstream supply activities. Therefore, we are working closely with our suppliers to drive emissions reductions across the value chain. We have listed some of the key actions we are taking with our suppliers here.

You can see our 3-step approach. First, we are onboarding suppliers in line with our targets by including environmental sustainability criteria in their supply contracts. To date, more than 90% of supplier emissions are covered by these criteria. This year, we also updated our procurement process, such as sourcing evaluation and RFP processes to ensure these criteria are applied consistently with new suppliers.

Second, we are engaging with direct suppliers to collect product-specific carbon footprint data. To facilitate this, we are using the Siemens data platform, [ SiGREEN ], which helps us track the carbon footprint associated with our products. Third, we continue to partner with our peers to define common minimum sustainability standards for suppliers and help them build their capabilities. Having said that, Scope 3 remains a complex challenge. At the bottom, you will see some of our key challenges. Suppliers have different levels of maturity when it comes to prioritizing sustainability topics and there is hesitance to invest early due to the relatively higher cost of green technologies.

Climate policies also vary by country. Most European countries aim for Net Zero by 2050; China by 2060; and India by 2070. So we do expect that policies and regulations will further streamline in the future, which will further support this transition. Now moving to another pillar nature. Here you see our 2030 targets built around water and waste, which are part of our existing targets and 2 new focus areas protecting biodiversity and sustainable sourcing, which we are currently developing.

For water, we have 2 targets: Water consumption aligned with the nature standard [ SBTN ] focusing on sites in water-stressed regions. Our 2030 scope covers both our own sites and supplier sites in these regions. And second, water quality, expanded from 2025 scope to now include labs and all API suppliers by 2030 in addition to manufacturing sites and high-risk suppliers.

For Waste, our target is to reduce waste by 30% by 2030 versus 2022 baseline. We are tracking well and have already achieved a 22% reduction to date. The 2 new focus areas, we have started working on are implementing biodiversity management plan for sites located in or near protected areas; and second, implementing a sustainable sourcing program with paper as a pilot commodity. We aim to define specific targets for these areas once assessments and pilot initiatives are complete.

To summarize, based on Article 964 of the Swiss Code of Obligations, and our previous nonfinancial reporting, we believe we are well positioned to comply with the CSRD, the EU taxonomy, MCS DDD once the EU Omnibus legislation is finalized. We are working to continuously strengthen our nonfinancial reporting systems and processes striving to bring them to the same level of robustness as financial reporting over time. This includes obtaining limited assurance from our auditors and refining our processes to meet any future requirements for reasonable assurance.

Generally, we feel confident and on track to fulfill these obligations. For the reporting of full year 2025, we will adjust our disclosure strategy to focus on a more targeted report on nonfinancial matters to meet regulatory requirements. This change does not reflect a shift in our ESG strategy or commitments. Rather, it aims to ensure our readiness for future requirements and to maintain consistency across regulatory filings. We will continue to share relevant information that may not be included in the report through other channels such as our usual ESG data summary to communicate effectively with certain investors and stakeholders.

This slide indicates that we are on track to achieve our 2025 ESG targets and meet our commitments related to sustainability-linked bonds, which are maturing at the end of this year. As you can see, even at the 9 months mark, we have already met our targets for a number of patients reached with strategic innovative therapies in low middle-income countries global health R&D as well as for water and waste management. As previously mentioned, we are making excellent progress in these areas and remain on course to meet our 2025 ESG targets.

On the next slide, we have a snapshot of our prioritized ESG ratings. While our initiatives are not driven by these ratings, we are proud of our achievements and welcome the external and independent validation of our efforts. Notably, we have been part of the leader scope in the Access to Medicines Index for the past 10 years. And this year, we have reached the #1 position. This is particularly gratifying considering our transformation journey.

As you know, just a couple of years ago, we spun off Sandoz, our generics arms. While this may result in overall decrease in patient reach achieving the top spot reinforces our commitment to expanding Access, particularly to innovative medicines. So it's really nice to see that progress. Additionally, we have received an upgrade to AAA from MSCI, the highest possible rating. Our controversy score also improved from yellow to green. Additionally, we are in the leaders group for ISS ESG #1 amongst peers in Sustainalytics and maintain a AA list status with the CDP for both climate change and water security.

As we close, let me highlight 6 key messages: First, we remain fully committed to our social impact and sustainability strategy even as the external environment continues to evolve; second, we are launching inclusive health accelerators to combine social impact with sustainable business growth; third, Novartis continues to lead the global health innovation with 8 new chemical entities in clinical development; fourth, our malaria portfolio; reflects more than 25 years of unwavering commitment to global health; fifth, we have strengthened our sustainability framework with a sharper focus on climate and nature; and finally, we continue to make strong progress on our social impact and sustainability targets earning recognition as an industry leader. These actions underscore our dedication to creating long-term value for patients, society and our shareholders.

With that, I invite our panelists to join me for the Q&A session.

Thank you, Steffen, Lutz and Korab, for your presentations. So now as we open the Q&A, I would actually like to focus on the top social impact and sustainability questions that we've been receiving from our investors. Let me start off with a recurring question this year, and it relates to the financial rationale behind our social impact and sustainability initiatives. Maybe starting off with you Lutz. Could you elaborate on the business case for the global health program? Some investors have actually asked would climate change accelerating the spread of vector-borne diseases, do you see the Novartis global health as a potential long-term growth opportunity?

Yes. Thanks for the question, Mavic. I think we need to remind ourselves that the main motive why we are doing the global health programs, both in the infectious diseases, but also the community health work is to create the desired impact on those communities. And particularly the diseases in tropical medicines are often characterized as market failure. While that may change, it also implies that the business rationale comes later and the impact rationale needs to be the first to consider. As you know, the way we have set this up is that our programs are self-sustainable. They are financially sustainable. So they are not dependent on constant investment. And in some parts of the world and some of our programs are accretive to the business. So they not only deliver the societal impact that we aspire, but also financial impact.

Thank you, Lutz. Let me turn to you, Korab. So you actually mentioned that inclusive health accelerators are strategically aligned with our core therapeutic areas. So could you just walk us through how this alignment translates into tangible value creation for Novartis, both from a business and impact perspective?

Yes. So thank you for the question. The inclusive health accelerators are really -- these are in our core therapeutic areas where we, as an organization, have actually a leadership position in. So in CVD, in oncology and they're really meant to translate into value the following ways. The first one, it is really around making sure that we're building trust with communities, patient groups. And these are communities in a way that have really very frequently not been seen by the health care systems. And we believe by building this trust, we'll be able to improve the diagnosis, but also we'll be able to improve treatment initiation and also adherence. The other piece that's really unique to the inclusive health accelerators is that we are working to address the specific barriers that patients face in a way that allows for these very targeted interventions that enable us to really look at the fragmentation of the health care system so that we can drive that intervention and the solution to those patients. If we're able to really narrow these inequities, we will be able to both increase our social impact but also from a business perspective in terms of the value we'll be able to deliver.

And Steffen, from an operational resilience perspective, of course, we have to ask that question. Have you observed measurable financial benefits from our environmental sustainability efforts. So we know that these initiatives likely drive efficiencies, but we also know that they also require upfront capital investments. So how do you actually do the trade-off and assess the return of these investments?

Thanks a lot for the question. Yes, we see tangible financial benefits out of those efforts. And it starts with our direct cost. When you look at our energy efficiency programs, we see, for example, reduced energy consumption, which translates directly in reducing our spend, but it goes beyond electricity. Our efforts on the waste reduction and increasing recycling also results in financial benefits as you use less material as you recycle material. And last but not least, part of our water activities is as well to reduce water consumption. And as a result, of course, this has also a financial benefit. When you look at overall, our investment, we started several years ago in technical operations when we look at capital investment to embed environmental sustainability as a key theme into each investment proposal. And what is very interesting to observe is that most of our CapEx project proposals have a positive financial benefit. For example, through upgrading of utilities or replacing and upgrading cooling and heating systems. So all in all, we have, over the past years, invested more than EUR 200 million into those efforts. And as I said, most of them with a very positive payback financially. And that's -- I would say that's the direct measurable financial benefit. But of course, it goes beyond that there's also an indirect, not so much measurable benefit as, of course, we fulfill with our efforts, regulatory requirements. And we also have an increase in trust of our stakeholders. So all in all, it's not only the right thing to do, but also it has tangible financial benefits for us.

Thank you, Steffen. That was reassuring. Now shifting gears to something very topical this year. I think it would go amiss if we don't talk about the current external environment. So back to you, Steffen, on supply chain resilience. It remains a top priority, particularly in today's volatile global environment. And how is actually Novartis managing risks relating to supply chain resilience? We know that recently, we had announcement on new manufacturing facilities in the U.S. So does this represent a strategic move to bolster supply chain resilience?

Yes. Look, first of all, of course, it's our key objective to ensure uninterrupted supply of all of our medications to patients worldwide. And I think I'm very proud to report that we are doing very well on this. Our customer service levels are close to 100% over the past few years. And this is basically a track record, which we are really proud of. And for sure, it's all built on a fit-for-purpose manufacturing network. We have more than 30 sites in our network. We partner also with external suppliers to complement where required. And these investments to maintain our network up to a state-of-the-art is very important. But moreover, I think the way we then deliver the demand worldwide is centered around appropriate inventory policy. So we always have a certain stock level in the country, but also at the different stages of manufacturing. Another important aspect is for most of our products, more than 80%, we have set up 2 parallel supply chains, which is very important to overcome local geopolitical challenges or challenges with regard to transport. And this results then truly in the very high customer service levels. And you mentioned our investment. We recently announced a large investment, a [ $23 billion ] investment in the U.S., one of our key markets. It's really a strategic investment in the market where we see also an enormous growth, and this investment into 6 new facilities, not only in manufacturing also, there's and inherent increase in R&D investment related to that. But [indiscernible] investment will, of course, ensure that we also can continue to ensure access of these medicines to make them available. And over the next few years, we will make sure that all key products will be produced locally and the U.S. So we believe it will further strengthen our ability to supply products to the U.S. locally, but also globally through other areas where they also have growth. And this is thanks to the strength of our supply chain setup.

Thank you. Lutz, turning over to you with increasing constraints on public funding for Global Health, how have your programs been impacted? So what strategies are in place to ensure continuity and scalability in this current external environment?

Yes. We have certainly seen the consequences of the very sudden and very significant reduction in official development assistance being spent, especially on the African continent. And health systems that were weak to begin with, are even weaker now and had very limited time to prepare themselves for that new scenario. And areas like disease surveillance, which is so important for infectious diseases is suffering as much as individual patients. However, our direct programs are not impacted because we have never received direct assistance from any government. But that was the reason why we have set up our global health approach in a self-sustainable way that the little money that we essentially make, we reinvest into drug discovery, drug development or health system strengthening on the ground, and that has sort of insulated us from the overall spending levels that we see at the governments. I see a potential here, of course, that we are now also pivoting into a new era of global health, where private capital and private sector engagement could even be strengthened, for instance, through public-private partnerships. And while the transition period will potentially be difficult and painful to manage I think that we could emerge even stronger out of this situation in a way where countries take more ownership and global players support the priorities being set at country level rather than the other way around. But that will require a lot of dedication and still hard work in order to arrive at that desired outcome.

Korab, I think I need to ask a question on the most favored nation pricing as this is also top of mind for a lot of our sustainability and stewardship analysts listening in the call. So what impact do you expect the MFN policy in the U.S. to have on Novartis inclusion and access initiatives? So for example, how does Novartis price medicines in lower middle-income countries? And do you see any impacts at all from the MFN policy?

Sure. So maybe I can just start initially with framing the philosophy where we do look at a value-based approach in terms of how we price our medicines and that value is really looked at across 3 dimensions. The first dimension is the value to the patient. For example, this is exhibited in the form of potentially increased efficacy. The second value lens we look at, it is really the value to the health care system. And this exhibited, for example, is could it be reduced hospitalizations in terms of what we're providing. And the third value lens that we look at it is really the value to society. And that means in terms of productivity and the return to the workforce for either the patient or the caregiver. And we believe this is really fundamental in terms of how we approach our pricing philosophy. We don't believe MFN is going to have an impact in terms of access and LMICs. And we, as an organization, continue to be committed to piloting different approaches, different models to make sure that we're able to do our part to reach more patients around the world.

So I'm just conscious of time because we have a few minutes left for one more question. So maybe this is for you, Korab because I think Steffen highlighted earlier that 2 of our 3 social targets are set to sunset by year-end. So Korab, can you share how Novartis is approaching this next chapter on target setting? Are there plans to renew or redefine our social impact targets?

Yes. So let me actually start initially with the good news in that we are actually on track to meet our targets that are associated with the sustainability-linked bond. We have also been working on the next-generation targets, and we will be able to announce that in the early 2026. So stay tuned for that. What you'll see in the new targets, it is a combination of, of course, our continued commitment around Access and making sure our medicines make it to patients around the world. Of course, we are continuing with all of our climate-related commitments our commitment to global health, and you'll see some new areas in terms of the work that we're doing as part of the evolved social impact and sustainability strategy. So I'd just say stay tuned for that.

I'm sure the investors tuning in are eagerly waiting for those new social impact targets. I just want to say thank you to our speakers and the investors tuning in. Thank you for your time and engagement. If there are any questions that we did not address in this webcast, please feel free to reach out to me or any member of the Investor Relations team. Thank you.

Okay. Good morning, everyone, and welcome to the immunology breakout session. My name is Victor Bulto, I'm the Novartis U.S. President, and I'll be on host today. I'm here with the team with Ingrid Zhang, who is our Chief Commercial Officer, for the international regions. Thank you, Ingrid. Also, Angelika Jahreis, she's our Development Head for Immunology. Thank you, Angelika as well. And with Richard Siegel. Richard is our Head of Immunology Research. So here, you have the entire R-D-C continuum ready to answer your questions. Before we do that, I just wanted to stress that this has been a phenomenal year for the immunology team here at Novartis across a number of dimensions. The first one with the continued solid performance of Cosentyx, which reinforces our commitment to that $8 billion peak sales guidance. As you all know, we had positive Phase III results in PMR, right, both across primary endpoint and all the secondary endpoints. It's an area of high unmet need, and we're very eager to be submitting registration early next year.

Then we had the fantastic news of the FDA approval for Rhapsido, about remibrutinib in chronic spontaneous urticaria. This is the first BTK inhibitor approved in immunology, and we are very, very encouraged by the early signs in the market. The feedback from both patients and physicians is very strong on the basis of a broad clean label, very fast onset of action and sustained response. So we're very excited with the launch and it's progressing to plan as we speak. And it's very important for us because that launch is the foundation for a number of other indications that Angelika's team is working on right across other indications like CINDU, which is already in Phase III with a readout next year. And Hidradenitis Suppurativa, where based on the Phase II data, we saw a biological like potential in terms of efficacy. And in food allergy, where we top line Phase II results and Angelika's team is now finalizing the Phase III design. Of course, that's only in immunology space. Vas mentioned earlier today in multiple sclerosis also expecting 2 Phase III readouts next year as well.

So as you can we have a lot of runway -- potential runway with Rhapsido and very excited about that molecule. The other piece of great news we had this year with NEPTUNUS-1 and 2, the 2 Phase III trials in Sjögren's disease with Ianalumab, readout positive. You saw the results. Angelika went through them recently in one of our calls, but we are very excited to be the first potential approval in Sjögren's disease, an area with tremendous unmet need for patients, where we will be able to bring a molecule that showed placebo-like safety and that was the first ever molecule to actually demonstrate efficacy in SjD and significant trends across a number of secondary end points. We're also equally excited on the -- like Rhapsido, where we see a pipeline and appeal with Ianalumab. As you can see, we went very fast with a number of subsequent indications as well with Phase III trials ongoing in lupus and lupus nephritis with readouts in '27 and also a Phase II ongoing and systemic sclerosis as well with the '27 readout, right?

And again, these are the immunology indications, also working on some hematological indications across ITP and wAIHA all, by the way, both in Rhapsido and Ianalumab in areas we know well. We know how to develop the drugs. We have commercial presence as we speak and therefore, substantial future commercial synergies as well. And last but not least, Richard's team is working with Angelika on our CAR-T YTB, CD19 in autoimmune reset. And there, we saw very encouraging data in our lupus trials. And now that gives us the confidence to start 4 parallel Phase II potentially registrational trials in lupus systemic sclerosis, myositis and ANCA vasculitis, right, with the potential there of an immune reset across a number of different immunological indications. So very excited about that as well. So all in all, we are expecting about 13 pivotal readouts before 2030 and 3 Phase II readouts, which gives us tremendous confidence as we continue to build this portfolio in immunology. And with that, we'll be very happy to take your questions, yes, please.

Yes, let me start with Ianalumab. So the involvement of B cells in the indications...

Sorry. Can you start again so that I can...

Sorry, my bad. It's Michael Leuchten from Jefferies. Starting with Ianalumab, the sort of the B cell involvement in the different settings, if we sort of go from toughest to most obvious, where does Sjögren's sit and then how does that read into lupus and then SSc. So like, I guess what I'm asking is like how derisked are the other indications?

Yes. Let me get started on that with respect to the clinical data maybe, and then I'll pass it on to Richard maybe to augment on the scientific data. Sjögren's disease, we've been trying to find therapies. And when I say we, then I mean the larger -- the pharmaceutical companies, biotech as well as academia for over 20 years. And I really want to stress that these are the first pivotal trials that have readout positive, and they replicate pivotal trials adequate into well controlleds that have met the primary end point and therefore, proven effectiveness of Ianalumab in children's disease. Children's disease has certainly has been proven to be a difficult-to-treat disease and what we have seen is that it is a very prototypical B cell-driven disease similar to lupus. Lupus Nephritis where we see infiltration of B cells in the tissue. And what is particularly interesting is that we have been doing a mechanistic study, and Richard, I invite you to talk about that a little bit better, but we've seen that we target these B cells specifically.

Now that has led not only to statistical significant differences in the primary endpoint in Sjögren's but also to a very consistent response across patient as well as physician-reported outcomes in both of these trials that have shown clinically meaningfulness of that response and have allowed us to really -- and I've shown these data in our investor call, right, to have also an increase in salivary flow in those patients who we believe still have a reserve for salivary flow. Now looking at lupus and lupus nephritis where other B cell therapeutics have already been successful, but also only if you deplete tissue standing B cells. We have seen in our Phase II study in lupus an SRI4 difference of about 35% to 40% rate. And that is at week 24, whereas most lupus studies readout at week 52 or later, and that is a really impressive result. We have also been able to reduce the flare in this patient population and the flares that patients typically see.

So I think our -- in summary, our Sjogren's data really do give us an increased confidence for lupus, lupus nephritis. As well, there are interesting data and important data of B cell involvement in systemic sclerosis. For example, pre-taxane is approved in Japan. It's the only country it's approved, but that gives you some indication that also in systemic sclerosis B cell pathology is important. So I certainly see it has increased. And I would be in particularly very excited about the prospect in lupus because we have tissue-dependent B cell depletion there. And in addition, we inhibit through the mechanism of action also BAF as the growth cytokine for B cells. So we have a dual mechanism of action, you could think of right overlaying to some extent, several mechanisms here that have already shown efficacy, and we expect much larger efficacy thereby in lupus, lupus nephritis. Maybe, Richard, do you want to add?

Sure. No, thanks. I think you summarized it really well. In some ways we're the pioneer in Sjogren's and that we didn't have as much prior evidence from approved drugs in B cell mechanisms in Sjogren's than we do in lupus. But I do want to draw everybody's attention to along with the Phase III results these 2 mechanisms studies that were reported at ACR, the ultrasound study that demonstrated differences in salivary gland pathology. And I think even more significantly, the biopsy study, where we showed 85% depletion of B cells in the target tissue in the salivary gland. And those 15% of B cells that were left, we demonstrated transmissional reduction of BAF-dependent signaling.

So that really brings to life the second MOA a reason for it to be there is that we're not depleting 100% of tissue B cells the way that CAR T therapy does. But we think that's an important reason to believe that Ianalumab will be differentiated from a standard B-cell depleter, CD20 based. There's also a difference between CD20 and BAF receptor expression, BAF receptor is expressed further along B-cell differentiation with the plasmablast lineage closer to CD19. So important reasons to believe and the strong Phase II results that actually lupus and lupus nephritis will be positively differentiated.

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So maybe just a first question on remibrutinib development program. So you started the SPMS study. Can you tell us a little bit about how you're thinking about the potential primary progressive study confirming that you are focusing on disability progression? And so any sort of trial consideration that you can tell us about, based on your learnings from competitors without? And just a second one on food allergy. You already have the Phase II, so we are waiting for the data, but we know we have positive data in food -- in peanut allergy. Can you just talk about the probability of success when moving to Phase III in food allergy because conceptually, it looks quite high if you already deliver data in peanut.

So Thibault, on the multiple sclerosis indication, I will invite you to ask the question to the neuroscience team. But what I can tell you is that what the team is right now doing is trying to consider what is it that we could include or how could we shape that secondary progressive MS trial to also reinforce evidence on primary progressive progression. But the team will have a better answer for you on the neuroscience section. And then Angelika, do you want to take the question on food allergy?

Absolutely. Thank you. So remibrutinib, we are developing it across CSU inducible forms of urticaria. We also have very interesting data that we've presented in hidradenitis suppurativa. And then food allergy, we are entering a Phase III study. We will be soon sharing the data at quadruple AI, the Phase II study that we have conducted. What I do think is very interesting for food allergy is the fast onset of action that many patients with food allergy will want. You will not only see that this remibrutinib has -- is showing a fast onset of action, but also very good efficacy. So it has biologic like efficacy. We also have fast onset of action there.

Victor, you already talked about the really clean label that we have seen for remibrutinib now in the U.S., which is, I think, also really important for patients with food allergy who are looking for a safe product to take as a first-line therapy for food allergy to mitigate the potential risk of accidental exposure to a food allergen. So we agree with you that the likelihood of success also based on the biology and similar pathways being involved in and food allergy being triggered through same histamine release in mast cells is high. And maybe, Richard, if you want to add something on that aspect.

Yes. So we will be presenting the data, but you can see that we're very excited about it and that we're initiating a Phase III study in food allergy. And if you want a preview of what it's likely to look like, you can look at the acalabrutinib academic repurposing study that was presented, very small number of patients, but very strong effect size, I think, 78%, 80% had significant protection from induced food-induced symptoms and rapid onset of action. And we know just mechanistically that even from Phase I studies, remibrutinib within a day of starting the drug, you can see total blockade of basophil activation, which is the blood-based equivalent of mast cells. So I think something to really look forward to at the Quad AI. And like I said, a lot of excitement to share with group.

Florent?

Florent Cespedes from Bernstein. Two quick ones. First, to come back on Rhapsido. Maybe could you share with us a bit of the opportunities of the different indications, the size of the markets populations because, of course, food allergy is a huge unmet medical need. HS is more competitive with the drugs already approved. So some color on that would be great. And my second question is on Cosentyx. Could you maybe remind us what do you have in mind kind of to some life cycle management to, let's say, protect the franchise beyond IRA and potentially biosimilars as well?

Well, thank you very much. Look, on the Rhapsido side, right, we've quantified the population in CSU that can benefit from this therapy in about 415,000 patients in the alone of course, we would add there the international patients. Just to give you a sense, there's about 1.1 million patients with CSU in the U.S., right? It's a very large indication about half the size of psoriasis. And out of this 415,000 patients, what we know -- sorry, out of the 400,000 are not well controlled with current antihistamine treatment. And that's despite very high doses of antihistamines, right? So the idea here having a clean broad label and oral therapy that actually acts very fast would be to take that step right when patients need to escalate before -- after antihistamine. And there's only about 20% of them who have escalated to biologic for a number of reasons, right? So we clearly aim at having that position after antihistamines. And based on what we are hearing initially, that is a very realistic goal right now, right?

So that's the idea with clearly 2 biologics in the space that take substantially more time to start having an effect. So that's for CSU. In CINDU, there's currently no biologic approved right? So one of the biologic was never studied the other one failed a Phase III trial, right? So right now in CINDU, we have a wide open space, and the overall population is as well around 400,000 patients in the U.S., so a similar market there when it comes to CSU. I think the HS market, I know there's a debate on the size of the market. We continue to see that market at about $3 billion to $5 billion market. And it would be very interesting to bring an oral therapy into the space, now provided we see a replication of the Phase II data where we did see biologic-like efficacy, right? So it is a more competitive space. But we do know in all of these areas. There's 2 benefits to it.

One is the overall component of it, which some patients prefer. And the second one is in highly symptomatic diseases. We know faster, rapid onset of action is also a benefit. And then when it comes to food allergy, look, on the surface, this is a massive market. If you think about food allergists, particularly with the potential that BTKis have, to actually be allergen agnostic given how downstream they operate. We know there's more than 3 million patients with severe food allergy across the main G6 countries, right? Then we'll have to start understanding and we have to start the work there, what are the patients that would benefit the most and when.

But we already know, for example, Xolair is off to a phenomenal start with food allergy. So we're very excited about that potential. And when it comes to Cosentyx, so the main life cycle management right now, of course, will continue to grow . We see HS will continue to be a key growth driver. It's a market that is growing double digit, right? That will continue to grow double digit because today, we only have about 20% of the patients properly diagnosed and treated. So it's a market that in the U.S. in international markets will continue to grow. And we believe as well Cosentyx in PMR, right, will be another strong life cycle management for Cosentyx there before we see IRA in '28 and LoE in '29, right? Sorry, do you want to...

Yes, maybe I can just build on because Rhapsido is already approved in the U.S., and we're looking at China approval any time, and followed by Europe and Japan in early '26. So that's all coming. I'm personally super excited about CSU, right? Because it's a huge market, right? That number -- equivalent number diagnosed and not controlled by antihistamine is about 4 million. And those are biologics less than 10%. And Xolair, CSU alone internationally is almost 1 billion already opportunity. So we're really looking at international to contribute strongly to the multibillion estimate forecast, right? But certainly, HS, right, because the health care system is very constrained from a capacity perspective in Europe. So having oral medicine with rapid onset, great efficacy and clean safety is going to be super valuable. I will just stop here. And then on the Cosentyx part, right, like, the -- I mean I think we're confident to get to $8 billion by the 2029 time frame. But in Europe, actually, the compound patent is a bit later. So we're also looking forward to that.

Yes. Okay. Thank you. Matthew?

It's Matthew Weston from UBS. Two, please. The first on Rhapsido, it's obviously an important driver based on Vas' comments this morning for 2026, return to growth in the second half of the year and then going into 2027. So if you could -- I'd just love to understand if you can help us on launch cadence in terms of particularly that look through 2026, when should we expect free drug to go to paid drug? What are the key drivers of that, that we can look for. We will promise that with Sotyktu. I realize that's not you, by another competitor in the space and it never materialized.

Why do you think you're going to have an access advantage to really drive the revenue growth for Rhapsido? And then a second question, if I can, just on YTB. A lot of focus on using CAR-T and immunology from lots of players. But as a regulator, you're clearly having a massive impact on someone's immune system. So clearly, at the very end of the therapeutic spectrum, I get it. But if we're going to bring it more mainstream, is there any way that we can look at more modest immunoablation in immunology or is that just totally counteracts the mode of action of what we're trying to achieve?

Great. So I'll take Rhapsido and then Richard will take the YTB question. So Matthew, a couple of differences here, right? One, we are extremely confident on the clinical profile of the drug, right? If you want to make sure that you're going to get access and pull it through the first condition is that you have a strong appetite from both patients and physicians to utilize the drug. And that's what we're seeing in the first weeks of this launch. And that's important. And what we're doing is 2 things. We're not only utilizing free drug, we're utilizing samples as well, but because when you have a highly symptomatic disease where patients are exceptionally miserable with these antihistamines, right?

There's a tremendous appetite for these patients for a rapid response. The main determinant of their urgency is lack of sleep due to the itch, right? So it's a very pressing disease. And so what we're seeing right now is a strong appetite from physicians to use the samples and get patients started right away. What Richard noted in terms of the speed of action, it's actually the anecdotal reports we get right now is that some patients call back day 1, actually already referring substantial symptom relief, right? I don't want to generalize that, but these are some of the reports we are hearing.

And then, Matthew, the -- our free drug program requires a prior authorization denial, right? So that means the physician will have to send a prior authorization, if they're denied, then these patients will get them free drug, right? And that's important for 2 reasons. And our Head of Market Access for the U.S. is sitting here in the room, Rob Rowinsky, right? The more pressure payers will see the more utilization and prior authorization they will see coming their way, the more urgency they'll be to negotiate and get access for this medicine. So right now, we are confident that through the first half of next year, right, we will have a cadence of payers, right, coming down with access.

And at that point in time, first priority will be to make sure that those patients on those free drug programs which we have identified will be pulled through into paid fields and that, of course, will pull through that access in the normal demand because our free drug program only kicks in if there's a prior authorization denial, right? And that is what gives us confidence, Matthew, that as we start getting that access, we will be able to pull it through. And of course, we don't want to rush it either because we're very mindful about the level of discounting that, that will take, right? So -- but we will keep you updated on that cadence as we go, but I'll reinforce that the demand, the underlying demand that we're seeing is there and that the satisfaction is there from patients. So that gives us the confidence that the Rob and the team will get the access and we will pull it through.

Maybe I can add one sentence before we go to Richard is that I think the comparison with psoriasis is also not quite adequate in my view here because psoriasis many, many therapeutic options are available to patients, whereas where we are with CSU right now is in a patient population that have very few treatment options. So I do think the unmet medical need is much, much higher in CSU than it was at the time of TYK2 entry into a very saturated psoriasis market.

Absolutely.

Yes.

Yes. So thanks for your question on YTB and B cell immune reset. So although you can argue that the immune set concept is a dramatic reset of the immune system. The idea is to have new generation of B cells from precursors and really change the immune repertoire. In terms of area under the curve of immunosuppression and immuno safety, you could argue that this type of therapy is actually safer than staying on chronic immunosuppression, which is the standard of care. So what we're seeing then the -- really the reason this is kind of a revolution in immunology therapeutic paradigm, patients recover B-cells 60 to 90 days, which is totally different. So please do not think about the original Kymriah and all the original CAR T and ALL, which is almost chronic B-cell aplasia. That doesn't happen even in DLBCL. And in autoimmunity, all of us, and there's some nice data from ACR, we're essentially all seeing the same thing as the original reports from air long and in others of the 60- to 90-day repopulation, which we think is important.

If you hear about 2 weeks of B-cell aplasia, we don't think that may be sufficient. But that level of aplasia, that short term is it's the depth that we think differentiates from even our own Ianalumab, which we know is not 100%. So we think from an immuno safety point of view, that it's actually a reasonable proposition for a severe refractory patient, the conditioning that's used fludarabine and cytoxan is an issue, but it's very transient. And just to remind everybody, that before 2010, cytoxan given in higher dose for a much longer period of time was the standard of care for lupus nephritis. Every rheumatologist knows how to give cytoxan, and so I think that is not going to be a barrier to rheumatologists adopting this therapy as their own if it gets to the market.

Simon Baker from Rothschild & Co Redburn. I've also got a question on YTB, but from a slightly different angle. As Vas said, and as we can see from the slide, this is potentially a pipeline in a product. But it's a slightly harder product to manufacture and scale than most. So where do you see the potential scalability of this? And how is manufacturing moving on going forward, both in terms of the logistical ability to scale out, but also from a cost of goods perspective? And then another slightly broader question, how sensitive is your growth outlook in immunology to the current structure of the U.S. market, particularly the PBMs. We talk -- we hear a lot about and we talk a lot about the imports of rebate walls when you got multiple indications for the same products. Are we overstating that? Or is the current structure critical growth? And do you envisage any change to the PBM model in the U.S. over the coming years?

Great. Thank you. You want to take on YTB manufacturing, Angelika, the trends in the process and why that makes a difference as well. And then we will touch on the logistical standpoint?

I think there are a few very important considerations. Our manufacturing time for YTB is only 2 days, and we aim for a 14-day window from the vein to door time as we manufacture the process. I think also when you look at autoimmune diseases, that are typically chronic diseases, the shorter time line, it is not quite as critical as it is in oncology. But I can tell you that we have deep experience at what sets us support at Novartis. We have deep expertise and experience in manufacturing. And we have to date been able to obviously -- for the clinical trials, but we'll also be ready for the launch to then produce YTB on a scalable level. We have that. We have shown that with KYMRIAH, I think we have -- and Ingrid you can talk about the numbers of patients we have treated with KYMRIAH, and we will take all learnings.

Now let me go also from the question about manufacturing, maybe to the clinical trials, they are progressing very well. And we have, as Vas has said, started our 4 pivotal trials that we have discussed with health authorities and aligned with them on how to bring this very novel and transformative therapy to patients with -- for right now, lupus, lupus nephritis, systemic sclerosis where I'd like to highlight physicians are very comfortable with that modality because they use stem cell therapy for patients who are refractory as well as vasculitis and myositis. And then Richard and his team is also looking currently at the earlier indications with srSLE and Sjogren's disease. But maybe you want to add a few words Ingrid around KYMRIAH and our ability on the CMC side?

Yes. So international of course, there's a U.S. number. But internationally, we actually serve KYMRIAH in over 400 centers across 30 countries, 30-plus countries, right? Cumulatively, we're talking about probably tens of thousands of patients. That's the number we're looking at. And I would also add, Novartis being a very global company, right? We have a really great strength of being able to manufacturing complex modalities with speed, quality and scale. I think an extreme, you talk about oncology is RLT. Vas mentioned 99.9% on-site on-time delivery at a very narrow window. In fact, right now, internationally, we place the order guarantee delivery within 2 weeks, and we're trying to further set time in a very -- in some ways much more difficult given the time frame. But certainly with Zolgensma, you think about, again, a very complex and we're serving internationally in well over 40 markets.

Yes, Richard?

So -- and on the PBM landscape. So obviously, there's a number of initiatives right now that are forcing -- well, or putting pressure on the system as it exists, right? Starting with more transparency on the gross-to-net barriers that are constructed. So I don't think that's going to change in the short term. But all these pressures will put some pressure on the system to evolve over time. And of course, that will change again, over time, and I don't know if it's 2 years from now or 5 years from now, where we've all said the PBM system will change much sooner than it did in the past. So -- but what that means that if you look at our strategy in immunology, already about 3 years ago, we decided we were going to go into the areas where there's substantial unmet need and where the areas are not that crowded. .

So if you look into Sjogren's disease, CSU, CINDU, if you look into lupus, systemic sclerosis, that's precisely why we wanted to go to areas where clinical differentiation and being one of -- the first to market and one of the first 2 market was going to make a difference. I think that positions us well to also be successful where that changed were that change -- were to change. In the meanwhile, of course, the benefit for us to have volume in the immunology space as we negotiate these new indications, but we are ready to if that changes substantially in the coming years on the basis of this portfolio. And actually, CAR-T is another great example of that, where it will be a medicine, right, that will be quite agnostic to what happens with the PBM space as well.

I wanted to point out as well on the CAR T space as we try to size this opportunity, well, there's 3 factors that we're considering, right? One is in how many in indications does this work? As you know, as you see, we've been very broad in our approach where we believe this space can work. Of course, the more indications we have, the volume we have, the more synergies and with the lower the manufacturing costs, so that's an important consideration. The other one you did ask is lymphodepletion and conditioning, the more comfortable the space is going to get, the more comfortable rheumatologists will get. I know -- we know in China, rheumatologists are conditioning themselves, right? And they don't have a problem with that.

Well, that be widespread as we get approvals for these medicines. And one is what other alternative mechanisms actually emerge. If T cell engagers work in these later patients or not, right? The more this is a differentiated approach and the more we're comfortable with the lymphodepletion, the more this will go into like earlier patients given the promise of an immune reset, which is really something very attractive for these patients, right? So these are the factors that we will be considering, and we'll be fully from a manufacturing and from a logistics standpoint for that.

Yes. And maybe I'll just add one quick one there back to maybe Matthew's question also we -- we're in a very, I think, excellent position. We have CAR-T in multiple indications. You can see also on our pipeline, we have PIT565 a CD19 T-cell engager, with some interesting properties that might increase efficacy in lupus and RA in early trials, and we have Ianalumab. So -- and remibrutinib, so if you go all the way from B-cell modulation to immune reset, we have the entire landscape in our pipeline. We want to bring the best therapy to patients and hit the sweet spot between complexity and efficacy, and we're in a position to kind of do that in almost mechanistic agnostic way. So it's a -- I think we have a good position to define the best therapy. And we're in research looking, of course, for CAR T in a pill, but we'll let you know when we get there.

Looking forward to that.

It's Naresh Chouhan from Intrinsic Health. Two questions. One on Cosentyx. Clearly, given the growth you've seen in HS you've had strong volume and price. How do we think about price mix going forward as kind of HS slows as part of the growth? And then for Rhapsido and CSU, given the rapid onset of action, do you expect patients to cycle on and off? How are you thinking about this data?

Yes. So on the -- you want to take the Rhapsido cycle, yes, and the nature of the disease and the progression?

Yes. So I can start out with that. For -- we have -- in our clinical trials, we have looked at the disease and the patients that we enrolled in our Phase III trials, for example, they all have long-standing disease, right? Sometimes you think about CSU as being only a short-term intermittent disease. But for many patients, this is truly a chronic disease that spans over many, many years. And we have seen many patients in our clinical trials who had more than 5 years of disease duration. And this means daily hives, right? The patients we enrolled in our trials, they had 50 hives. And now imagine, right, you have 1 bee sting or 1 mosquito bite how the but these patients have 50 per day. And that has a huge impact, as Victor has said, on the ability to sleep, the quality of life, ability to keep a job, right, the ability to even parent with the disease like this. Why am I highlighting this?

I just want to ensure that you understand that CSU is in some patients of waxing and waning disease in many patients, it's a very chronic disease. When we have -- after our Phase IIb, we've stopped the treatment and looked at the relapse rate and then we started treatment. There are 2 things I wanted to highlight. One is that when you stop treatment within 4 weeks, 1/3 of the patients had relapses of the disease, and were really happily going back onto treatment. And when we retreated, we had the same efficacy again because it's an oral drug, there is not a risk for neutralizing antibodies. So patients recovered their response based upon retreatment. But certainly, right, there may be patients who want to after a year or 2 stop treatment and see if they still have the disease or if they relapsed, it's easy for them to go back on and there's a huge motivation in patients based on the burden of the disease to go back on to therapy.

Right. And on Cosentyx HS, look, what we continue to see is the market growing at about 14%, 15%. And I do presume that that's what's going to see -- that's going to happen in the coming years, right? Given the amount of patients that are currently not treated or not even diagnosed, we have efforts to continue to grow that market, but the patients are quite stigmatized. Many of them don't even show up to the doctors. So that it's going to take time for us to activate these patients. And we do expect that as new competitors come, they will hopefully invest as well into that development, and we'll see the market continue to grow.

But in the meanwhile, right now in a market that is growing at that pace, we have a 50% NBRx share. That means 1 in 2 patients are either start or switched to Cosentyx. So we do believe that, that will give us a good growth profile for Cosentyx in HS. And from a pricing perspective, right, we have very broad access now with Cosentyx and HS, predominantly in earlier lines, which is where the majority of these patients come when you get longer durations of therapy, and we don't expect that to change in the short term as well. So that's why we're confident on HS continue to be a growth driver for Cosentyx.

Good Matthew. And then Steve, after that?

Okay. It's Matthew Weston from UBS again. Two please, if I can. Just one quick follow-up on Cosentyx HS. The efficacy for all of the HS drugs probably isn't as good as everybody would like based on some of the other immunology agents, which probably means that there's a lot of patients who are satisfied and then cycled off. You've put all that effort in, you've already said it's difficult to find the patients. You put all the effort in to get them. Is there anything you can do with Cosentyx to keep them on? Can you raise the dose? Can you talk to physicians about that means that you'll make Cosentyx patient sticky? And then the second question is back to YTB. I think Vas mentioned in his opening comments, potentially registrational Phase II, can you tell us, are you aligned with regulators on what you need to see from the Phase II studies in order to file?

Great. So I'll take the Cosentyx question, and then we'll ask Angelika and Richard to comment on the CAR-T. Right now, we have approved for Cosentyx and HS, at least in the U.S. by the FDA, 2 different dosing regimens. So every 4 weeks or every 2 weeks, right? And so the majority of patients who start with in every 4 weeks treatment. And if they don't respond, they have the option to go to every 2 weeks. And I'll ask Angelika to mention what we saw in the clinical trials. Right now, initially, that rate of patients that would escalate before discontinuing was 15%.

We've been putting efforts to make sure physicians understand that, that's an option for their patients before they switch out to another drug, and that number is up to 25% now, Matthew, and we will continue to make sure that everyone understands that, that's an option that they have before they have to switch out because you're right, the high adenitis suppurativa clinical response scores are about 50 versus psoriasis being 90. So naturally, you'll see a little bit more turnover of these patients. And actually, we have some data from the clinical trials as well. Maybe you can comment.

Yes. Yes, so certainly, I mean, the data that you've cited are the primary outcomes of 50% high score data. If we look longer term on patients, how are they performing. And we have presented our data out to 4 years. And the efficacy actually increases over time. And what is particularly important for patients with HS is the pain and the flares that they experience. And many of these young women who come to the physician with hidradenitis suppurativa and their flares, they are in parallel to their menses. So we have seen about a 65% reduction in the pain score of those patients who came and entered our trials with moderate to severe pain and then they experienced mild or no pain at week 52.

In addition, the flares, and I think that is particularly important 70% reduction in flare rates over 1 year, and we see that persistence over time. But I agree with you, we are not there where we are with psoriasis yet. That is why we have a very active research and development efforts ongoing in HS, we are excited. We talked before about the remibrutinib data. Remibrutinib as an oral therapy, fast onset, very safe for these patients with hidradenitis suppurativa who often are young women overweight smokers for these a pill -- twice-a-day pill will be a really good treatment option if we can replicate the biologic-like efficacy in the next study. Maybe I start...

Briefly, I want to make sure we get Steve's question.

Yes. I'll be brief. With respect to YTB, yes, we have had discussions for all the pivotal trials with the respective health authorities, and we have aligned with FDA on the readouts and the data that is necessary for us that we need to provide for submission if the data are transformative, which we expect that they will be and the current studies are well aligned with that. And we expect the first data that we could submit by 2027.

Thank you, Steve? We'll take the last question.

Stephen Scala from TD Cowen. Two questions. And on the first one, I could be wrong. But my recollection is that Novartis had a Cosentyx orally delivered formulation in development many years ago. Is that correct? And if so, why was it dropped? I assume bioavailability and you continue to pursue that. Also, do you have late-listed patents that you plan to unearth similar to the brilliant strategy you had on Gilenya many years ago? And then on Ianalumab, I think an unanswered question is the subgroups. Now it's been weeks since the presentation. So I assume Novartis has visibility on the subgroups. What can you share with us at this time?

Do you want to take the oral...?

So I think oral equivalents of biologics have been a goal across the field. There were programs in the past. You've seen how difficult it is across the industry to develop a truly low-molecular IL-17 inhibitor. I'm sure you've been following that very, very challenging pharmacologically. Now that we've seen with IL-23 cyclic peptide inhibitors success that I think that's going to probably be highly successful. It's very difficult now to sort of think about Internet space way behind that. But I think the cyclic peptide approach, just from a drug discovery development point of view looks really exciting. And if we started a program today, we'd probably be going with that rather than a standard low molecular weight approach.

I can close by -- or I can answer the question about Ianalumab, yes, we do have the data in-house, and we are obviously looking at these data with great detail. We plan to submit to the house authorities in the first and second quarter next year. So early first quarter, we expect to submit data. And we have seen consistent trends over most of these domains.

Great. So with that, we'll conclude the immunology session. Thank you very much, everyone, for your attention, and have a great rest of the day.

[Break]

Here in the room and as well on the webcast. Welcome to the cardio, renal and metabolic session. My name is Patrick Horber, and I'm the President for International. I'm here with 3 colleagues. Starting on the left side with Ruchira Glaser, who is our business unit -- Development Unit Head for CRM. Then Dianne Auclair, who is our U.S. Therapeutic Area Head for CRM; and then finally, Shaun Coughlin, who is our Global Head for Biomedical Research as well for CRM.

1 year later, after our meeting last year, I think we made significant progress across our 3 strategic pillars. ASCVD, atrial fibrillation, arrhythmia and as well on renal. If we look into ASCVD, we're developing a number of assets, which are targeting different risk factors like Lp(a), LDL-C and as well inflammation.

In Lp(a), we're progressing with pelacarsen, and we're expecting a data readout of our Phase III outcome trial in 2026. In LDL-C, we have Leqvio , which is now a blockbuster. And we are continuing to build evidence with Leqvio to support the use in different settings, including as well 2 outcome trials ORION-4 and VICTORION to prevent, which will have the data readout in 2027.

And then finally, inflammation where we acquired Tourmaline in this year with an IL-6 inhibitor, where we'll see more data of our Phase II trial by end of this year. Then going to atrial fibrillation. We have abelacimab, which is our lead compound, which is targeting stroke prevention, and it provides a benefit risk profile, which serves patients which are currently undertreated because of a high risk of bleeding with current available medicines.

At the same time, we're looking as well broadly there into antiarrhythmic molecules with different MOAs, which all of them are in very, very early development. And then finally, in renal, we have Fabhalta, which is our anchor drug, which has approvals now in C3G and as well in IgAN and we're developing Fabhalta in 4 additional renal indications.

If we talk specifically about IgAN, we have a product portfolio there with 3 assets, Fabhalta and Vanrafia, which are approved in the United States and as well in China. And the third one is zigakibart, which is currently in Phase III development, and we'll have the data readout in 2026.

And then finally, the acquisition of Regulus Therapeutics, where we got into our pipeline for fomivirsen, which is an oligonucleotide for the treatment of polycystic kidney disease. It's an autosomal dominant disease, where we see here the potential for a better treatment than the current standard of care.

Overall, if we look back these 12 months, I think we have made significant progress and strengthened our pipeline through collaborations and as well acquisitions. And if I look from here to 2030, we have 7 Phase III data readouts, which will definitely be catalyzers in CRM.

And with that, I would propose that we go into the Q&A. I just have here in the first row.

It's Matthew Weston from UBS. Two questions, if I can. The first on pelacarsen. And it's about trying to -- I'm old enough that I remember the Diovan launch, the Leqvio launch, the Entresto launch, took 5 years to get to $1 billion, but then was $1 billion a year additionally every year.

So if I look at pelacarsen, you have kind of 2 options, you go high Lp(a), normal cardiometabolic price. It probably takes you 5 years to break even, but a very big area under the curve, or you take it to kind of ultra-high Lp(a) on the cutoff with a much higher specialty cardiology price, maybe the same NPV, but you break even much quicker. I'd just love to understand, is that a reasonable assumption? Or you're just going to go for everyone and see what the data brings?

I will start with the U.S., maybe Dianne, you can start, and then I will add on, on the international side.

I'm old enough to remember all of those launches, too. And the good thing is, when we're old enough to remember them, we can learn from them.

So I think the reality is cardiovascular launches do have a slower ramp. So that is something that we should accept. But what I think will be different with pelacarsen is that we do have the ability to leverage the learnings that we have from most recently Leqvio in ASCVD. And one of the key learnings is that as we shifted our focus with Leqvio to a post-event patient where the motivation of the patient and the provider were higher, we started to see more momentum pick up.

And so our intent with pelacarsen is to launch in the early year or years to a focused patient where we believe the motivation is going to be the greatest. So that will be consistent with the HORIZON trial, looking at patients with early events and family history.

I think there's a couple of other things, too, that will bode differently than what we've seen in LDL-C. There is no standard of care for Lp(a). So we wouldn't expect the same level of friction in the system where physicians have to step through a generic -- a lower-cost generic. And I think the other key thing for us to think about with Lp(a) is the genetic component of it should be a motivator. The family history is an emotional motivator for people to take action.

Yes. Maybe building on that. I think we made significant experiences over the last decade with our launches. And I think as Dianne said, Lp(a) is different than everything else what we had. There is no treatment available today. That's a fact. We have 20% of people who have Lp(a). There is a family history.

We will focus clearly on a smaller patient population when we start, and I think that will give us a higher probability as well of success. And then I think we know as well our customers much better even after the launch of Leqvio. So I see that definitely as a significant tailwind, which will give us the opportunity to really make a significant footprint from the beginning, which I think will be critical.

Perfect. Can I jump in with the second question, which was abelacimab, why don't I pass the mic on.

That would be nice. Thank you.

Just sticking with pelacarsen, please. If the -- if there's kind of a slow like we've seen in the LDL field, how does the readout of HORIZON not lower the bar for fast followers? So how do you think about the competitive landscape? And how would you then think to defend that?

So I think there's a couple of things. One of the piece, as Dianne was saying, is that HORIZON, our experience in the trial was that people -- whilst the level of entry was 70 milligrams, people with much higher Lp(a) were signing up for the trial. And our median Lp(a) levels [ 108 ] and 80% were over 90%. And I think it just signifies that there is an awareness of this genetic risk factor and people are waiting for that first therapy. So I think that the uptake early will be quite different.

And what we've seen to date are an acceptable safety profile in terms of no changes to our protocol from the IDMC. So I think there's another opportunity there in terms of people getting on to drug early and staying on drug because they're satisfied. And then from a development perspective, the last thing that I would mention is that we do have in our pipeline additional drugs that are ready to go for our early portfolio in terms of long acting.

And I think that's -- I think the important thing here is that we do believe that we have a comfortable lead. And in a market that will be crowded with cardiovascular companies, that lead is going to be important for our ability to establish the standard of care early, but also to start to establish the payer leverage. And to the point that Ruchira made, we do have follow-on assets in the pipeline. And so anything that we're doing to build the market benefits that to.

Next question, it's going to the fourth row. I think it was the next question. The gentleman on the left side. Sorry, let's go on the fourth row, the gentleman on the left side, I think he raised his hand first, sorry.

Steve Scala from TD Cowen. I have 3 questions, but they're pretty brief.

So regarding the recently launched IL-6, Vas said on the Q3 call that Novartis seeks to differentiate via study design. So where can you improve on what Nova is doing? What are they not doing right?

Secondly, pelacarsen event accumulation. Can you tell us whether it's leading to an H1 or H2 readout? I assume H1 because the original readout was 2026. So it seems if it slipped to 2027, there are real issues.

And then second, lastly, ORION-4, somewhere along the line, it slipped from '26 to '27 readout, was that also due to event accumulation?

Thanks, Steve. Maybe Ruchira?

Yes. So your first question was on IL-6. Could you repeat that one?

The differentiation.

Differentiation in the -- yes. So I think you said, is there something that Novo is not doing right? It's not about Novo not designing their program correctly. They have obviously a broad Phase III program underway, atherosclerosis and chronic kidney disease, heart failure and very acute myocardial infarction patients in the first 72 hours.

We think that there's an opportunity here to pick a more differentiated patient population, one which combines high inflammatory burden with clinical adoption and practical use. We're looking at that design actively now with our academic collaborators. We're going to engage next year with health authorities globally after the completion of the Phase II trial, which we'll complete in December. And once we do those things, we'll be able to share more details about IL-6.

And I know you asked about ORION-4, so I just to cover that off, that third one, which is that, no, there is no -- the event rate is as expected for ORION-4. This is a collaboration with Oxford University. So they are managing the trial dynamics, and they have indicated to us that they need more operational time to do data clean out and things like that.

And the readout in 2027 doesn't affect our plan, which was to submit both ORION-4 and V2P, our sponsored secondary prevention trial at the same time. Between the 2 trials, we've got over 30,000 patients. And so I think this gives us really robust power, particularly for cardiovascular death endpoints. So we would wait for both of those trials to read out and which will come much more similar time frame at this point.

And could you remind me the second question? I didn't grab that.

Pelacarsen readout in H1 or H2? And if it's H2, it would seem like there's an issue because it was already to have reported.

Yes. I mean this is an event-driven trial. So we're continuing to monitor the event rates carefully. We still believe it could come in first half of 2026. I think regardless of when it comes in, our intent is to submit the file in 2026.

Florent?

Yes. Florent Cespedes from Bernstein. Two quick ones, please. First, on Leqvio, could you remind us the profile of the patients on primary prevention because sometimes if there are a little less sick, there is less events and sometimes a risk to, let's say, to try to target a broad population and potentially miss the endpoints. So some color on that would be great.

And my second question is on abelacimab. Could you maybe remind us the positioning of this drug, we understand it's for the more severe sufferers and the ones that do not respond to the existing treatments. So size of the population, the potential -- sorry, it's early days, but the price or the cost of this treatment, given it's not first line, but as for the most severe sufferers. So any color on this one would be great.

Okay. Let's start maybe Ruchira with the primary prevention.

Yes, for our V1P trial, which is our primary prevention trial for Leqvio, we are targeting a much broader population in this trial. So what that means is patients who have all of the traditional atherosclerotic risk factors rather than singularly diabetes are included in the trial. When we look at the baseline characteristics of what that means, 70% of those patients do not have established atherosclerotic cardiovascular disease.

So this will be a very broad population, which I think I'm very excited about because I think it will be very clinically meaningful to show that LDL reduction really translates to longer lives and free of heart attack and stroke.

Maybe I can take the abelacimab question. So we see that about 40% to 50% of patients today are either undertreated or untreated by the current DOACs and that's because of drug interactions, bleed risk, and contraindications. And so it is a sizable population that we are going to go after. And in the U.S., we see about 9 million patients and growing. And we think the growth rate in this space is high because not only of the aging population, but we also see the wearables playing a role in the growth rate over time.

Just one on farabursen, when Regulus was in charge of the assets in the development programs that were planning to start a Phase III in the second half of '25, and they were talking about getting an accelerated approval on the base of kidney volume endpoint at 12 months. So as you're starting to plan the trial a little bit later, do you see the same similar strategy? Are you still looking for accelerated approval? Are you changing the Phase III plan compared to Regulus initial plans?

And then just a follow-up on abelacimab. Can you frame the market opportunity depending on infection data in AFib? Because obviously, if it works, I think the landscape is different versus there is no Factor XI on the market for [indiscernible].

Maybe Ruchira?

Yes, I can start with farabursen. Yes. Well, first of all, I would say that I'm very excited about the Regulus acquisition for farabursen. This is our anti-miR-17 oligo. And what we've seen here is more broadly, a great fit for Novartis. I mean it's the research -- on the research side, it's -- it fits with our platform strategy at xRNA.

On the development side, as you point out, the accelerated approval pathway offers us a great opportunity to bring in the Phase III trial with the readout potentially in 2029. So -- and on the commercial side, it fits in very well with our rare renal commercial footprint, which Dianne can speak more about.

In terms of the company's original Phase III plan, we looked at this thoroughly and talked extensively with them during the diligence process and obviously, since the acquisition. And at this point, we are in -- we are talking with health care authorities and regulators.

But as you pointed out, the height adjusted total kidney volume and imaging end point has been an accepted surrogate by FDA. And so we would anticipate and this is something that we saw great data on in the Phase Ib study, where we saw that compared to placebo in the lowest dose there was almost a complete stopping of growth with -- as measured by height-adjusted total kidney volume. So I think that, that's something that we would certainly pursue.

And then I think -- was there a question about abelacimab and if milvexian fails. So we did model that scenario in our deal case. We modeled multiple scenarios. And regardless of the outcome, we see a multibillion-dollar opportunity.

Maybe just to add on this. This is across the globe. So we see significant opportunities as well in the vaccine markets. But I think as Dianne was saying, even if milvexian comes, we still have a market of 40% to 50% of patients, which are today undertreated or even not treated, which with abelacimab, you would get in there, and I think that's what we want to do.

And then you, Matthew. I think you were waiting now for some time. Sorry.

Simon Baker from Rothschild & Co Redburn. Two for me, please. Going back to pelacarsen, could you give us an idea in the HORIZON study, the split between the different entry criteria in terms of previous MI stroke and PAD. The reason I ask that is a few KOLs we've spoken to have suggested that the observational epidemiology for the link between Lp(a) and stroke is mixed. MI, it's nailed on, but with stroke is mix. I just want to get an idea of the proportion of those patients in the study.

And then a slightly broader question on obesity when you're thinking about development opportunities. We've seen a dramatic change in the price dynamic within that space in the last few weeks. The expectation is that will lead to an equally dramatic volume shift, but the whole price volume thing is alien to pharma even if it's common in every other consumer category in the world.

So I just wanted to know how this has affected your appetite for the category and what you would be looking to develop? Is this now one where niche indications within this huge market are more favored or less favored? Any thoughts would be really useful.

Okay. Thanks for the question. Maybe let's start with the pelacarsen patient population.

Yes. So I think taking a step back for the reason for your question, the data show in general for stroke across different risk factors that it's just a more heterogeneous endpoint. So sometimes you don't see the translation as crisply in epidemiologic studies. But I think the randomized trials where you do the intervention, if you're hitting the right biology, you should actually see an improvement in stroke. And our primary endpoint is a composite that includes stroke.

So for us to show a benefit in the composite, we want to also enrich for patients who have stroke. So I think that the 2 go hand in hand. And it's still always -- it's always going to be a little bit of a minority of the endpoint and the patient population that's brought in. By the way, the stroke history is predictive not just for stroke, but for cardiovascular events in general. So I wouldn't limit that translation only to stroke.

And I think the other thing to point out is that, that is very different to the approach that's been taken for Amgen, where they're looking at a more coronary heart disease endpoint. Our key secondary endpoint is the same as theirs, and our trial is 90% powered to show an 80% reduction in our primary composite endpoint.

Maybe let's start more from a development perspective on obesity, and then I can add something on the commercial.

Yes, sure. So big picture for obesity, we still see tremendous opportunity and unmet need. The contribution to atherosclerotic cardiovascular disease and heart failure and Afib and other core areas for us is very apparent. And so managing obesity is central to managing cardiovascular patients now.

The GLP-1s have obviously established a huge market, been transformative. But the discontinuation rates, I think, are pretty telling. The type 2 diabetics have discontinuation rates around 30% at 3 years, despite the drug being covered. So that I think the tolerability opportunity is really large. So we think the field will evolve. We'd like to evolve with it. There's, I think, an opportunity for differentiated and more tolerable medicines, orthogonal mechanisms, et cetera. So we have quite a number of early programs, very exploratory, but novel to try to contribute in a differentiated way.

Maybe just adding on, I think you see that we're really looking to obesity, but we're in very early stages. And if we want to get something forward, then it has to be highly differentiated because I think there is a need for highly differentiated and better products. But even with your statement as well that the market is probably becoming bigger because prices are changing, we will not change our overall strategy. So we'll stick to that what we already have communicated in the past.

First, Michael and then...

So it's Matthew at UBS again. Two quick ones, please. One area where the Street seems to be very different from Novartis by 2030 is Leqvio. But one thing that I think we've all been surprised with is the ex U.S. growth. So could you split out, if you had to guess, the percentage of ex U.S. revenue that you think will contribute to that peak sales number in 2030 to give us an idea of how important the U.S. is in your mind versus probably in our mind?

And then the second question, just on abelacimab. In the past, with DOACs and other modulators in the area, physicians have been very focused on having an antidote in case the patient needs some kind of surgical intervention, and you want to prevent bleeding. What's the plan for abelacimab?

Okay. I take the first one as it's mainly international. Yes, you're right. I think we're doing extremely well as well in international with Leqvio, mainly driven as well by the Asian markets, China. I think Vas as well mentioned this morning that we were expecting to get public reimbursement, and that would be great. And that would open up, of course, the Chinese market with many, many patients there.

So China will be a significant driver and a contributor to the overall top line of Leqvio, which will be as well the case with Japan, where we're doing as well extremely well. But we're doing well as well in Europe. I would say Germany is currently the smallest market because we have a more restricted patient population where we will add some additional data over the next 2 years to extend that. And then with the 2 outcome trials, we see the opportunity to further drive the international market.

Now what is the split between the U.S. and international? I would say probably here, we have like a chance to see something like a 50-50 or 60-40 split. So 60% in the U.S., 40% us. I think it depends as well on how strong we can penetrate the Chinese and the Japanese market. I think this will be 2 markets, which would drive very strongly the top line from an international perspective.

And you to handle the...

The abelacimab.

Reversal agent. So yes, I mean, first thing I would just point out before answering the question is that the Factor XI genetically deficient patients, they don't bleed. They don't bleed through surgery and things like that. And that we've actually seen through the development of abelacimab growing comfort from investigators about adalastimab.

And what we saw in our Phase II trial, not only did we have a 60% reduction in bleeding compared to rivaroxaban, but our open-label extension study, patients who are still on adalastimab have had procedures, have had surgery, and there has not been an excess in bleeding still.

That being said, we understand that as people get comfortable, they still may want to have a reversal agent on the shelf. Clinicians -- myself included when I was an interventional cardiologist, were very worried about bleeding and procedures. And so our plan -- we would have a reversal agent ready in that circumstance.

And maybe I could add on that the commercial research that we've already done shows that there is already a segment of the physicians who don't believe that it's needed. And I think the rest can come through education as well. But to Ruchira's point, we will have plan.

And maybe just building a little bit on that, just recall that LILAC is actually sit against placebo. So there's a nice opportunity to see if there is indeed a bleeding signal up and above that in the placebo.

Two questions, please. It's Michael from Jefferies. Patrick, with Giovanni coming in, just wondering, given your long history at Novartis, whether you could talk to whether things have changed and how they may have changed with the new Chairman coming in?

And then back to the research side of things. We get the zigakibart data next year. For me, maybe I'm getting this wrong, Biologically, there's a bit of a conflict between the complement side and the [indiscernible]. So how do you think about positioning zigakibart versus the C5?

Okay. I'll start with the first one. Thanks for the question.

From a strategic perspective, I think as you see as well and as you've seen on the presentation this morning, nothing is really changing. Clearly, when there is a change from a person, there are different maybe questions which are coming up and different discussions, great direct interactions.

I have to say, I think Giovanni got in the beginning of the year. We're working very closely with him. He's supporting us. He's fully aligned with the strategy, which we have communicated as well this morning. So I don't see any major change strategically. Clearly, from a collaboration perspective, I think we see a strong collaboration with the ECN, with all the members, but of course, as well with Vas, who is our CEO.

And then on the second question, I would hand it over first to you and...

Yes. So I mean, just a reminder, IgA nephropathy, it is a heterogeneous disease, and we know that different patients require potentially different individualized treatment options. In that regard, I think we have a great advantage having 3 of the key mechanisms for IgA nephropathy. You didn't mention the foundational therapy and Vanrafia, but that's our endothelin receptor antagonist, and it can be seamlessly added on without any adjustment to ACEi and ARBs and with additional benefits shown in SGLT2 patients. So I think foundational, most likely regardless.

And consistent with the recent update to the KDIGO guidelines, the -- the strategy that's being encouraged is to have one therapy like a foundational therapy that helps with the downstream damage and the previous damage to protect the kidney function and the second therapy to get at the source of the damage. And this is a place where the anti-APRILs have great promise, including zigakibart.

So zigakibart is an anti-APRIL. It does not have the BAFF component, and it prevents the pathogenic IgA from being formed and creating the complexes that create disease. So I think we have a great opportunity with the anti-APRIL class and with zigakibart.

Zigakibart specifically from a data perspective, has the longest data in terms of proteinuria reduction with 2-year data showing over 60% proteinuria reduction and stabilization of the eGFR. And that Phase III trial is on track.

And if you think about that versus the BAFF combination, there is a theoretical benefit to having the combination potentially, but we have not seen that translate so far in the clinical studies. It's hard to do cross-trial comparisons always. But that being said, the proteinuria rates at similar time points have not been different, if anything, numerically slightly worse for the dual.

There is on top of that, the safety considerations for having a BAFF component in terms of infection. And we saw with the Vertex drug at the highest dose, which has been not continued increase in infections in hypogammaglobulinemia. So I think that will remain to be seen what the long-term profile is.

In terms of the last piece of that, that you asked around the positioning of that versus iptacopan and other complement inhibitors. So iptacopan really gets at the inflammation that's produced as a result of the pathogenic IgA. And when we talk to nephrologists, what we're hearing is that they like to use it for patients that they feel are more inflamed. There's different markers potentially that, like such as hematuria and other signs.

That being said, we've seen really good uptake of Fabhalta in IgA nephropathy clinically. And we will be -- there is a very strong interest in studying this more effectively. Our last -- my last point is that we will be working with our academic community. We had strong interest in generating combination data for efficacy and safety to look at the combinations of these foundational therapies with either Fabhalta or zigakibart.

Maybe I could add on to this with a commercial view. What gives us confidence in the ability to position all of the drugs appropriately is that we are already seeing today with both Fabhalta and Vanrafia on the market, where we are -- we do have a specific patient type for each we are getting the patient types that we're asking for.

So Fabhalta is the patient that has rapid progression, persistent proteinuria and glomerular inflammation. Vanrafia is that seamless add-on. And so the positioning is in line with where we see the benefit to the patient, but also where we see the field going. And we do -- zigakibart is also -- if you look at our portfolio, does bring -- have the biggest value. So that positioning is in line.

Florent Cespedes from Bernstein. Two questions, please. First, on LTP and PAH. Could you maybe share with us how you anticipate how you will position this product versus the drugs which are already on the market?

And my second question is more on earlier phase pipeline. I'm very curious, arrhythmia, inflammation, multiple assets, multiple modalities. That sounds exciting, but could you share with us a little bit more color about these assets? Maybe on arrhythmia, high-risk, high reward, do we have to understand that you will maybe target the most severe sufferers, or will you try to address or to beat the existing treatment on broader populations? Some color on that would be great.

I'll take first.

I can do...

With LTP, yes, this is one that I'm actually very excited about. It's our SMURF inhibitor for pulmonary arterial hypertension. This field has had nothing for so long essentially. It was just really tough therapies that had to be given critical care units. And now with Merck's sotatercept, I think we've had a real revolution in the care of these patients.

The SMURF inhibitor pathway aims to balance TGF-beta and BNP. And so it's a parallel pathway to that, that sotatercept acts upon. And our preclinical studies have actually been very encouraging in terms of similar, if not slightly better efficacy against positive control in those studies when you compare them to the other class.

The difference is that because it's a parallel pathway, we don't expect to and nor have we seen in Phase I, some of the safety issues that affect patients taking sotatercept. That includes bleeding from telangiectasias, includes rises in hemoglobin. And finally, LTP is an oral.

So when we talk to investigators that are super specialized in this field, they are incredibly strikingly optimistic about LTP in terms of the clinical need that it would address. And so that study is actually doing quite well. We just started Phase IIb and have already enrolled patients.

Yes. So you've heard about abelacimab in SPAF stroke prevention in AFib and the opportunity there being to treat the patients who are currently untreated or undertreated. We think about the antiarrhythmic space similarly, maybe it's even more open. If you look at how Afib patients are treated despite the fact that maintaining sinus rhythm improves outcomes, only about 20% of people receive an effort at maintaining sinus rhythm. So huge opportunity there.

The lack of treatment is due to the side effects, safety problems with the current standard of care. So there's really, I think, an opportunity to disrupt a non-treat paradigm for the whole field with safe anti-arrhythmic drugs. We -- the overall strategy is to try to develop atrial selective mechanisms and molecules, early-stage exploratory programs. We do have multiple programs in the clinic now as promised last year, exploring multiple different mechanisms. And hopefully, we'll have more to say in a couple of years.

Steve?

Steve Scala from TD Cowen. So I'd like to follow-up on the obesity question. So last year at this meeting, the company said it was looking at mechanisms for appetite control and sparing lean muscle. With all due respect, it doesn't seem that things have advanced much in the last year, not really much in the way of detail. Can you provide any mechanisms you're exploring? And could there be a candidate in development in '26? Maybe Phase I? Just maybe provide a few more details.

Shaun?

Yes. Thank you. So these programs are really early and exploratory. So I'm afraid we don't have a lot of information yet. Some are completely novel mechanisms. We're not pushing very hard on lean mass sparing. We are sort of thinking about what that indication might mean. It's not clear what it means clinically. And as you know, we had bimagrumab and it's been outlicensed.

We are still looking at appetite control mechanisms, energy expenditure mechanisms. Will we have a molecule in the clinic next year? Probably not next year, but hopefully, the following.

Thank you. Any other questions? Please?

Jane [indiscernible] Capital Investor Shareholder. To follow-up on Michael's question, IgAN. So thanks first for sharing the different positionings for your 3 drugs, which is great. So one of the competitor Otsuka will have their sibeprenlimab to launch market very soon for IgAN. That's also anti-APRIL. I just wonder, how will that impact your maybe sales trajectory or the outlook for the potential big cells, especially consider they will have at home auto injection.

You want to start, Dianne?

Yes, sure. So all of that is built into our forecast and what we've already assumed as our peak. So we don't see it changing anything that we've already guided. But we look forward to having another modality. It's a good thing in a disease like this that has not had any treatments in the past. And we think that this -- having more drugs helps to expand the market, and we will benefit in time with our own from any of the shaping that they do.

I mean, I can add one point to that, which is one thing that's evolved, which I alluded to previously is that clinicians and the scientific community are realizing that combinations are going to be critical in this heterogeneous disease and the recommendations have already changed in the guidelines for that.

And I think here, we do have an advantage for zigakibart because we will be able to generate evidence for efficacy and safety of combined therapies and combined approaches. And I think that will -- that's something we're really hearing clinicians asking for.

And like you said, Dianne, I think it is -- IgA nephropathy is a devastating disease and it's young adults who often are diagnosed and a very high rate of end-stage renal disease. Hence, the recommendation to go for combination therapies more aggressively now.

And maybe I can build a little bit more on to that commercially because the fact that we are the only company that has 3 different mechanisms in this space not only helps to the point that Ruchira made around the evidence generation, but the other commercial factors, it helps with our payer coverage. It helps -- if these patients are going to require multiple medications through their journey, they also have an opportunity to stay with one company in terms of the patient support that will be needed for these products. And so that gives them a consistent experience, and we can build loyalty over time. So there's a number of benefits to having the portfolio.

Thank you. Last question, Steve.

Just curious would Novartis consider launching Leqvio and pelacarsen via the DTC program?

Maybe I can take that. So I think -- I mean, you've already seen our announcement for Cosentyx, and we continue to monitor and evaluate any innovative ways that we can get medicine estimations.

Okay. With that, I would say we close here. Thanks a lot for your attention, and thank you for your prestigious questions and have a great day with the other teams. Thank you.

[Break]

All right. Good morning. Good morning, and welcome to the oncology session. I'm Shreeram Aradhye. I'm the President for Development and the Chief Medical Officer. And it's my pleasure to introduce my colleagues, Reshema Kemps-Polanco, our Chief Commercial Officer in the U.S. with a long interest and experience in oncology herself. Dushen Chetty, who's been heading up the Oncology Development Unit for the past year; and Shiva Malek, our Head of Research in Oncology.

I'm also pleased to introduce you to, Mark, if you wouldn't mind standing up, Mark Rutstein. Mark will take on now and has started as the new Head of Oncology Development. Mark joins us from Daiichi Sankyo and before that, BMS, long experience in oncology for many years, and we're delighted to welcome Mark. He won't be speaking today, but this is his first introduction to meet Novartis management. Mark, thank you for joining us.

It's been an exciting year since we last met at M&M in London. Lots has happened in oncology, great progress on Kisqali, Pluvicto and Scemblix. Scemblix just got approval in Europe now. So as Vas pointed out this morning, an extraordinary example for us of the pace at which we have started to work, getting it approved within 3 years of having first started the trial and then all of the subsequent approvals moving at pace, the most recent one happening 3.5 months earlier than we had expected. And in my mind, a clear reflection of the quality of the work that is happening across the company. Our overall strategy, prostate cancer and breast cancer remain tumors of focus. Radioligand therapeutics become the platform where we believe we are making the consistent investments across all competencies to create what we believe is a unique expertise in bringing precision radiation as we have called it, to more patients. Core strategy there, as illustrated with Pluvicto, moving into earlier lines of therapy and bringing that benefit to a larger population. A whole concept of how we can combine radioligand therapeutics with other agents as well as evaluations of beyond RLT molecules like the CDK2 inhibitor that now enters clinics for breast cancer. So all in all, super excited with the progress that we're making, and I'll open this up and look forward to your questions. Mike?

It's Mike Leuchten from Jefferies. I can't let you get away without commenting more on Kisqali versus the Roche data that came out the other day. Just from your perspective, how do you think about the segmentation of the patient pool, Stage II, Stage III, medium risk, high risk? Where do you see the white space where maybe a next-generation oral SERD might be an option as monotherapy? Where is monotherapy definitely not going to play? And I guess, how does that feed into your development program for the combo trial that you're going to kick off next year?

An important question. I'm going to start, and then I'm going to let each of my colleagues actually comment on their perspective from each of their own areas of expertise. I think -- all in all, I think, first, we wait to see the data at San Antonio Breast. We believe that hormone receptor -- hormonal therapy, which this may represent the next advance is complementary to cyclin inhibition. We believe that Kisqali has demonstrated its role in living up to the promise that inducing sustained cell cycle arrest and reducing the skin disease is an important benefit, and we have seen that consistent benefit across the entire population in early breast cancer.

So all in all, wait and see. We see these as complementary mechanisms. We believe the direct impact on Kisqali is, if anything, it's possible that something else becomes the standard hormone therapy pillar. But for now, there's a lot of work to be done. But in general, maybe Sheila, why don't we start with the mechanistic thing.

Yes. So I would start first by saying that endocrine therapy like the next-gen oral SERDs, their mechanism of action actually converges and plays -- synergizes nicely with CDK4/6 inhibitors. As you know, estrogen receptor actually regulates Cyclin D1 expression and Cyclin D1 is upregulated in breast cancers, including early-stage breast cancers. So the question of the combination, I think combining with next-gen oral SERDs would certainly be something that we're interested in doing. And of course, we have combination studies ongoing with external partners, including with Olema. I think it's not surprising that they're seeing this level of activity in the early setting. This is where ESR1 is still wild-type. And there's a greater dependency on ER in that setting relative to the later-stage metastatic setting where we know there's -- the biology is actually fundamentally different. Maybe Dushen can comment on the study designs and patient population.

Yes. I think -- well, as Shiva mentioned, we'll wait to see the data. What is important to highlight is where we are with NATALEE and what are some of the learnings we've had from NATALEE that may be relevant here. When we did the 5-year analysis of the NATALEE study, there were a few things that stood out for us in terms of the long-term benefit that patients are deriving. While we might see an initial interim analysis now for the SERD, what we really need to see is longer-term data to understand its potential in preventing recurrence, right?

So the whole purpose of administering drugs in the adjuvant setting is to prevent recurrence in about 1/3 of breast cancer patients will recur. What we saw from the NATALEE 5-year data was that even though patients had 3 years of Kisqali and then 2 years without therapy, that benefit is sustained. And what that tells us is that the hypothesis we had around CDK4/6 inhibition resulting in irreversible senescence is borne out. And in fact, further, we also looked at distance disease-free survival -- disease recurrence-free survival at the 5-year mark. And on both of those measures, we saw about a 30% risk reduction. And so what that tells us is that we're preventing the formation of metastases. So I think that's really important where they have an initial effect on disease-free survival. What we need to see to understand whether this is going to have potential in monotherapy or in combination is what is the potential in terms of preventing metastases and preventing disease recurrence. So that's what we'll be looking for as we move forward.

Yes. And just to add to that commercially, I think the question is less about what is the impact on the CDK4/6 class and more about can this truly displace traditional hormone therapy as a new backbone -- as an optimized backbone. And I think what we've seen, right, is that Kisqali has become the CDK4/6 of choice, whether you're looking at early disease or in the metastatic space and regardless of combination partner. And so this question around will an optimized monotherapy displace an innovative combination. I'm not sure that's the right question, but it's more about what will it take to displace traditional therapy. And one of the things we will be looking for in the data is what is that risk-benefit profile, particularly what is the safety profile in this early disease space because the patients tend to be younger, a lot more active and fitting this into their lifestyle with a favorable side effect profile is very, very important.

So I think we just have to wait and see, but I remain confident on the CDK4/6 class and in particular, Kisqali. We have now seen penetration of about 55% class share, which is now well established, right, standard of care. And with that share now has broken towards Kisqali across the broad population. And we believe we have more headroom. If you compare to the metastatic setting where it's over 80% penetration of class share, we believe there's a lot more room there.

It's Matthew Weston from UBS. Two quick follow-ons, please, both on Kisqali and SERD. Vas, I think in his opening comments suggested that he saw the future potentially as SERD plus CDK4/6. And if I look at that commercially, I think the best way of winning there is to own both elements of the combo, particularly if I think that you've got Kisqali LOE and Kisqali IRA coming, then it would be a great way to protect against both and have a much more longevity in your franchise. I think I'm right in saying as a consequence of the Olema, Kisqali supply deal, you ended up with a 20% stake in the company. Can you confirm that?

And how do you feel about [indiscernible] that owning both parts, at least commercially would be a really successful option? And then the second quick question, particularly because you suggested you understood why the efficacy was best in the earliest setting because that's where estrogen plays the strongest role. If we were to see SERDs work in adjuvant, but not work in frontline metastatic, do you think that changes your perspective on patient's sequencing and a clinician view because you could keep the CDK for a first-line metastatic patient, but you wouldn't be able to -- you probably wouldn't do that and have the combo in adjuvant.

Maybe you start with -- start with your answer Shiva.

Right, right. So okay. So if I'm understanding, you're asking about the role that the oral SERDs will play in the early adjuvant setting versus the metastatic setting, and...

I'm asking if it doesn't work -- if SERDs don't work in frontline metastatic, does that change your view that a doctor won't be influenced about sequencing?

Yes. Maybe that's something Shreeram, do you want to take on...

I'll take that. I think we learned from moving Kisqali into earlier lines of therapy that what we're trying to accomplish is to give the person with early breast cancer the best shot. And every time I went to ASCO over the last 3 years, and I met with people and patients and they're treating physicians and certainly the patients, which is when you see a woman who says that I want to make sure that I've done everything I can to prevent my risk of recurrence because I want to be around for my child to graduate or for my grandchild to be born, whatever it is that was important to them, the idea that they would therefore -- they would probably want to go for the best option available at the time of their diagnosis at an early setting.

And we believe that knowing that we have this complementary mechanism of cyclin inhibition, CDK4/6 inhibition in combination with hormone therapy for which we wait to see whether a different standard has emerged. So I don't think that people will say, I'll get you a little bit of something now and then wait for it to use something once you have recurred and had metastases. I think going back to your first question, the idea that with these data, we have always thought about the fact that we need to have a plan for how Kisqali can be combined -- how these 2 mechanisms of action can be combined. Conceptually, having 2 agents that are your own, of course, makes -- would make sense. Our partnership with Olema is around the clinical trial and -- but I'm not in a place to be able to give you clarity on the content of ownership structures because I actually don't know.

Florent Cespedes from Bernstein. In fact, a broad question on radioligand therapies. This morning, Vas during his remarks, introduction, highlighted that there is a potential of almost $30 billion sales market potential for this class. Could you maybe elaborate a bit on where you see most of the opportunities beyond prostate cancer, breast, lung, other diseases? And if when you use these treatments in earlier phase, what is the risk to have some side effects that would prevent the use in earlier setting or in refractory patients is enough to achieve this kind of almost $30 billion market potential?

Thank you, Florent. Maybe I'll frame this as how do we see the path to the $30 billion market. And I'll ask on each of my colleagues to actually share with you how we think about it. We have said that having invested a lot of energy in RLTs and their development and building upon what we have learned from Lutathera and moving Pluvicto starting in the metastatic setting to earlier lines, we know that it takes a lot of effort to build the competencies all the way from the discovery stage to manufacturing to be able to successfully identify, build, develop and deliver radioligand therapeutics.

Each of those pillars has its own the need for its our own expertise. We believe that we have built that expertise. We live in a stage where I believe that many people outside of the company don't know what they don't know as people are trying to get into the space. Everybody sees the potential and many of our competitors are coming into the space, which we welcome. But I think maybe, Shiva, why don't we start with you with how we think about it in the research as Vas started his study and then we go to Dushen and to Reshema.

So I'm happy to answer that question. So as Vas mentioned, we have over 20 programs right now in research in the radioligand therapy space. And we're taking perhaps maybe 3 approaches. The first, I would say, really excited about targets that have more broader pan-tumor potential. And that would be a target like FAP, which we have both the 2286 molecule that Dushen can tell you more about as well as our second-gen molecule from research. And that program targets a protein that's specifically expressed on cancer-associated fibroblasts that are present in a variety of different solid tumors, including pancreatic cancer, lung cancer, breast cancer, so broad tumor potential.

The second kind of approach is more of a targeted approach getting at targets that are more clinically validated. For example, DLL3 RLT, which is currently in Phase I. This is a molecule that we acquired through our acquisition of Mariana Oncology last year. And the interesting feature of this is, of course, this is a clinically validated target given there is a T cell engager approved in this space. But it's a low-expressing target exquisitely expressed in small cell lung cancers and the Mariana technology was able to really achieve getting nice efficacy with actinium in this space. And then the third is really thinking about indications that are still radiosensitive unmet need and how we might be able to provide better patient benefit through RLT. And for example, the HER2 RLT program is one in that setting, where we think with the radioligand therapy profile that appears to be safer and potentially opens up different combinations, that may be an area that we could really make a difference.

Why don't you talk about how we are approaching that early evaluation in the clinic and dosimetry and the efforts that we're making and perhaps end with a few programs that you are specifically excited about.

Sure. So I'm sure everybody here recognizes one of the unique features about an RLT program is that you see what you treat and you treat what you see. I think that's what Shreeram is referring to. So it gives us a unique ability when we have a radioligand that's labeled with an imaging isotope like gallium or even a SPECT isotope like Indium that you can actually see where the tumor is and then you can see the progression of the tumor or how you're able to treat the tumor. And I think that's a unique proposition for RLT.

In terms of some of the programs where we've applied that, for example, Shiva mentioned the FAP-2286. And because of our ability to see the tumor and to see uptake into tumor, we've studied FAP-2286 across a number of different tumor types, and we've seen uptake in 28 different tumor types with FAP-2286. So while we're starting with PDAC and non-small cell lung cancer, the potential to expand across other indications is vast. And so I think that's the potential that we see with the FAP molecule.

And I think what everybody is waiting for is that what is the data that we're going to present that excites you beyond everything we've done with Pluvicto and Lutathera. And I think to set expectations, Dushen would we say that the early readouts that we expect to get there are in the '27 time frame?

Even in '26 for FAP in PDAC. We also expect that with NeoB, there's 2 breast cancer studies, one in combination with ribociclib and one in combination with Capecitabine, and we should have early readouts for those in '26.

And I think that we approach this with the humility that we have taken on the idea of evaluating these possibilities in early stages, and these are early-stage programs with -- we'll see what the data reveals. But Reshema, do you want close out with the...

What we're seeing commercially, really proud of the work that the teams have done in the U.S. to expand the infrastructure to support RLT. And we did this not just for Pluvicto, Lutathera is because we imagine the future that is to come with the -- what we believe will be a proliferation of RLTs, not just from Novartis, although we are leading and want to continue that sustained leadership, but we also see that other companies now see the promise of RLTs and are now having their own development programs. And what we would imagine for the future is that this really becomes a mainstay of cancer treatment, just like we see with chemotherapies, targeted therapies and other modalities.

Today, we have 700 -- over 700 treating sites, 580 of them continuously ordering. What I'm really pleased to report since being here last year is the scaling that we've seen in the community setting. Last year, when I was here, I talked about what are the things that need to be true in order to see a rapid uptake for PSMA4, and we've indeed seen what we predicted. We see considerable growth coming out of the community setting ahead and faster than the academic setting. And we expect this to continue as we get into 2026. And then hopefully, with the approval of PSMA addition, we'll even see that expansion into the urology setting. And we also see now urologists, large clinical practices in urology starting to set up infrastructure to be able to administer RLT. So very, very promising field.

And I think I'll close by saying that the principle -- underlying principle remains the same, which is we must demonstrate that an RLT delivers a therapeutic index that is meaningfully different from what a standard of care is otherwise offering. And to that end, for example, there's also the entire idea set of activities that are looking at how can we combine RLTs with, for example, DNA damage repair inhibitors, where the ability of potentially further enhancing delivering more efficacy, potentially altering the regimens and radiation delivered, evaluating what are the tumors that will lend themselves better to an alpha emitter versus beta emitter like lutetium. So a lot going on. We see this as continuing to build our competencies in an area where it's not going to be as easy for competitors to catch up with us.

Simon Baker from Rothschild & Co Redburn. Just continuing on that theme. You've got a number of assets targeting prostate and PSMA, different ligands, different isotopes. Can you just give us perspectives on the characteristics and the tolerability there. Is this about more about the isotope and the emission? Or is this more about clearance rates in terms of toxicity? Some thoughts there and just associated with that, given you're now in actinium, what's your perception of actinium supply -- from what we hear, it's not perfect, but it's a lot better than it was. So any thoughts on that would be helpful. And then a slightly random question, I guess, asked a lot around the sector. What's your current perspective on PDX VEGF bispecifics as a modality?

Okay. Shiva, do you want to start with the with the first question on how do we think about the PSMA targeting and Dushen about...

Yes. So maybe I'll start -- so we spend a lot of time thinking about the choice of radioisotope we use. So lutetium is a beta emitter, has a good linear energy transfer, but -- and then we can also get this crossfire effects that we want to see in neighboring cells, whereas actinium is much higher energy, linear energy transfer but travel shorter distances. So you could envision with an actinium agent, you could get it micrometastatic lesions. You could -- you might also want a higher energy agent when you're targeting a low-expressing tumor antigen, for example.

So we really think about the biology and the tumor type as well as expression of the antigen we're targeting. The safety profile between lutetium and actinium, as you might imagine, would look different. So it's really about a risk-benefit analysis of understanding how -- the degree by which we're generating efficacy for patients and what the safety looks like. Dushen can tell you more about the clinical studies.

Yes. So we have now 2 Phase IIIs with actinium. The first of those we call PSMA action is in a post-Pluvicto setting, so in a post- vision population. And we think there, the rationale for doing that study is very compelling because there are no approved therapies in that setting. So patients have a median overall survival of about 7 months. So offering an alternative with actinium there is very important.

The second study we have is in newly diagnosed mCRPC. And we also see a potential for advancing therapy in that setting. And I think ultimately, our goal there is to have optionality where we believe that Pluvicto can be more forgiving in terms of the toxicity. With actinium, as long as you select the right patients, it can be very effective with higher linear energy transfer that Shiva mentioned, we expect higher efficacy. The other aspect of that study that's important is that we're combining with an ARPI, and we've seen from evidence that Louise Emmett generated in ENZA-p study where you have upregulation of PSMA with an ARPI. So we expect that not only the combination with an ARPI in that first-line mCRPC setting is going to be helpful, but having PSMA upregulation is going to contribute to the efficacy of actinium in that setting.

You want to share our current view on PD-1 VEGF?

Yes. So we're monitoring the space. We've seen compelling data in solid tumors, and we understand how the biology in the tumor microenvironment is changing with the PD-1 VEGF. But I think our view here is that we're not going to do a me-too. If we go into the bispecific space, we will do something that is differentiated and allow us to add value rather than just following where others have already been.

Steve?

Three questions. The first may not be appropriate for this panel. But can you clarify on Olema, do you have a right to first refusal on the asset? There seems to be some confusion. Secondly, does the new Kisqali guidance assume it is selected for IRA in 2028 or not? And then lastly, the next-gen CD4, what makes it next-gen other than the fact that it doesn't have CD6 -- CDK6?

I think I'll just take the first question, Stephen, that I don't have the answer for you. So maybe we'll save it for one of our other colleagues if they're able to answer it when [Ronny] is here or -- but yes, I don't actually have the answer to it. So Reshema, do you want to talk about the Kisqali?

Short answer is yes. It is assumed it's baked in to the guidance that we've given.

And for the CDK4, what makes it next gen, Shiva?

Yes. So you definitely spot on that the idea here is really to hit CDK4 as potently and as selectively as possible and really spare CDK6 inhibition, which we know drives a lot of the heme toxicities that has been observed with the dual CDK4/6 inhibitors. And we're hoping -- the hope there is, right, you can get continuous target coverage and drive greater efficacy and then open opportunities for combinations, both doublet combinations with endocrine therapy, but also triplets and other combinations. So that's what we're hoping to achieve with our next step.

You want -- maybe I want to take this as an opportunity to have you elaborate a little bit more on how we are approaching in oncology and our early work, our prior experience in this space as well as...

Yes. So we've learned a lot, of course, as you know, Kisqali was a homegrown molecule. We call it ribociclib in research. It was developed by the chemists in-house in biomedical research. And so it was really learnings from that molecule and the structure-based drug design that happened that enabled us to first design a next-gen CDK4 selective molecule. We then, of course, have ECI, our CDK2 selective molecule. That was really grounded on learnings from the Kisqali clinical studies where we understood that Cyclin E upregulation can drive progression and resistance.

So really targeting CDK2 that forms a complex with Cyclin E1 became important. So we've developed that molecule. And then thinking about how we can put everything into different flavors of CDK2/4 inhibitors is kind of the next generation that's moving forward. Again, all geared from our insights from the original Kisqali work.

It's Michael Leuchten, again from Jefferies. Questions on -- or question on Pluvicto. If you take into consideration sort of changes in regulation for the amount of radiation that can go into a patient, where does that fit in terms of the revenue potential? Are patients still not getting the full number of cycles because physicians are worried that they're not going to be able to retreat? And then a question on -- just going back to breast cancer, KAT6 is that something that fits into your thinking from a portfolio perspective?

Maybe Reshema, do want to answer the Pluvicto question and then Shiva?

Sure. So on Pluvicto, in this earlier setting for PSMA4, we expect the duration of therapy to be longer and closer to the clinic -- what we saw in the clinical trial versus what we saw in the VISION population. And just a reminder, the VISION population, that really was almost -- you would think of it as salvage therapy, right? And so unfortunately, there was a case where maybe the patient progressed or they were too sick or maybe the patient passed away and so we didn't -- we weren't able to finish those doses. We're not seeing that dynamic in this earlier stage. But it's still early as it takes a while for those cohorts to move through to get the 6 doses. But so far, we are -- there are no red flags in terms of what we're seeing in terms of the number of doses, and we'll have a better view on that as this initial cohort gets through in 2026.

Dushen, do you want to add to?

I just want to add one bullet there. In PSMA addition, 85% of patients completed 6 cycles of therapy. So that was very encouraging for us.

And then maybe with KAT6, yes, so we are monitoring what's going on with KAT6. Of course, Pfizer has published some interesting data around that target. I think what's unclear is the patient population. KAT6 is amplified in subsets of breast cancer patients. They didn't select for that population. So we'll need to understand what role that plays. And then, of course, there were toxicities observed. So of course, thinking about combinations and the future of that is something that we'll have to monitor.

I'll go to the back...

[indiscernible], JPMorgan. First question, just to build on the PSMA addition conversation in terms of the data you saw quite a strong benefit on RPFS and then OS is still early, but positive trends. So just how you're thinking about approvability of that data. The ESMO discussion was maybe a little bit more lukewarm in terms of the efficacy there. So just your perspectives on that would be helpful. And then the second question would be on Kisqali and room for growth in metastatic. So TRx share has been growing, but your NBRx share has been stable. So how should we think about headroom for growth in the metastatic setting?

Dushen, do you want to take the PSMA addition?

Yes. Thank you for the question. So I'd like to start by saying we respect the discussions' views, and we think it's important to raise the scientific questions and have a discussion on them. And we look at his views with the context of the full data set for PSMA addition and our previous studies with Pluvicto. What he highlighted were 3 areas that he had questions or concerns around. One was a belief that patients with higher uptake will have better efficacy. And when we look at all of the different subgroups for PFS and OS, what we've seen is a consistent benefit over the ADT, ARPI comparator arm for all of the different subgroups.

So some subgroups do slightly better than other subgroups, as you would expect, but all of the subgroups did better than the ARPI, ADT arm. So that was the first of his observations. The second was on the safety profile. And what we have seen in terms of safety is that there were no new safety findings for the combination. It is an add-on study design. So you have Pluvicto plus the backbone therapy, ADT plus ARPI. So you would expect a safety profile that reflects the add-on therapy. And then as you -- the third point was around overall survival. He was concerned that we would not show a benefit in overall survival. But what we did show at the second interim analysis at the ESMO presentation was at the time with about 47% of information fraction, we showed a hazard ratio of 0.84 despite the fact that there was 16% of patients from the ITT population who crossed over about 60% of patients who are eligible for crossover -- had crossed over.

But despite that, we saw this trend in overall survival as the data continue to mature. We expect that at the third interim analysis, the confidence intervals will tighten. And what we've learned from PSMA4 was that we saw a growing benefit in terms of overall survival as we looked at subsequent interim analysis. But ultimately, it's the data that will speak, and we'll do that analysis. We expect it's event-driven in 2026, the first half of 2026.

Yes. Maybe I'll go on the Kisqali question. I appreciate the question. It's a really good one. So in the metastatic space, I think it's important to understand the dynamics that are happening there first, second and then line 2 plus. What we see is consistent growth in the metastatic first-line share, and that's exactly where we want Kisqali to be used. But what we also see is as emerging data comes in around patient -- different patient types and patient groups in the back end of the disease, you start to see some erosion there on second line plus. And that is okay, honestly, from a strategy perspective because we do want Kisqali used earlier.

And also if that data is emerging, if it shows that a subgroup of patients are better treated in second and third line on something else, then that makes complete sense. So in the first-line setting, we do believe there's more headroom there. As a reminder, in the metastatic space, the way I view it from a strategic standpoint, that's a share capture strategy, whereas in the early breast cancer, that's a share -- that's an expansion strategy, right? So in the share capture strategy in metastatic, we believe there's more headroom there because we still see patients who are started on [indiscernible], right? And so the question there is how much more of that share can we capture in terms of those new starts, and we believe there's still room there. But we are getting up there. I will say we're getting up there, but there's still headroom to go in this time period that we've given guidance for Kisqali overall.

Florent Cespedes from Bernstein. Two follow-up questions on radioligand therapies. First, what is the difference on your slide here between the first-generation alpha-emitting product and the second-generation alpha-emitting product? Is there -- is it a question about easier to handle, longer shelf life? Any color on this one would be great. And then more broader question on radioligand. Long term, how do you believe it is possible to combine these products with existing treatments given the fact you have a risk of having more side effects?

Dushen, do you want to take both?

The first question. So the 2 -- have 2 different ligands. In the first generation, we have actinium PSMA-617. So the ligand there is exactly the same ligand that you have in Pluvicto. The second is a ligand called PSMA-R2. And what's different between them is we've seen a difference in uptake to salivary gland. And so what we're hoping is that we would have a broader therapeutic index with PSMA-R2. So we continue to look at data there, and it depends on how the data pans out. But these were based on dosimetry experiments for a study we did with lutetium on PSMA-R2. But if it pans out that there's a broader therapeutic index, it gives us the potential to take it into different settings. And so that would be how we would apply the 2 molecules in 2 different settings.

And then do you want to comment on the potential for combining RLTs with other agents?

Absolutely. So we've got actually a number of combinations. In fact, PSMA addition is one example where we've shown combination with backbone therapy in prostate cancer. But also in with Lutathera, we have a study ongoing in extensive stage small cell lung cancer, where we're combining with chemo immunotherapy. We also have in prostate now an ongoing study with an AR degrader. And I think that holds great promise because we not only degrade the androgen receptor, but through degradation of the androgen receptor, you upregulate PSMA, so more target for Pluvicto to bind to.

And then we also, Shiva mentioned DNA damage response inhibitor. So we're about to start a study where we're looking at a combination of Pluvicto in the first instance with the DNA damage response inhibitor. But if that pans out as we expect through this mechanism of radio sensitization, it will have broad applicability as a combination across all of our RRT portfolio.

Reshema, anything to add? Did you want to say?

Yes. No. So I think that there's a variety of different ways we're thinking about combinations with radioligand therapies. I would first say that there -- RLTs are actually pretty well tolerated. That's one of the reasons we're so excited about them. But we're thinking about both radio sensitization strategies that Dushen described, but also mechanism-dependent combinations like the combination with the AR antagonist. So thinking about how you might in an orthogonal way potentiate the efficacy of the RLT.

But the overriding principle for all remains the same, which is that the commitment to make sure that we are designing the trials that evaluate how the combination delivers disproportionately greater efficacy without adding to the toxicities. The therapeutic index has to be the fundamental driving principle of what we're doing.

It's Matthew Weston again at UBS. Just following up on the Kisqali question about different lines of therapy. I'm just intrigued, are we seeing treatment through multiple lines yet? It may well be too early. But if you have a patient who's using it in early breast cancer, what's the physician doing when they progress? Are they keeping Kisqali? Are they keeping CDK4/6 but changing to a different agent? Or are they having to move beyond CDK4/6?

So to really your question, so in terms of Kisqali, we actually haven't seen in -- right, it's still really soon, right, to see those patients. And hopefully, we won't see a lot of that. That's the whole goal, right? But maybe we can speak to the data around what happens in sequencing and how we're thinking about that as these patients progress.

So I think it will need to be studied systematically. I think we know that it is being used across different lines, but we need to have a systematic study that evaluates the efficacy if it's used in early and in late lines, and we haven't done that yet.

Maybe I'll just go to the back. Steve, just behind you.

Big picture, I was wondering, do you feel you've missed out by not really having any much ADC over the year now that you've sort of been a couple of years down the line? And second, I was interested in what do you think is your most contrarian take or undervalued oncology asset that you're looking at. It might be the contrarian take as not being in ADCs, but I'd be interested in those 2.

Well, maybe rather than contrarian, I'll say that we had a pioneering position on doubling down on RLPs as the place where we were going to get focused on delivering precision radiation rather than precision chemo, which is how I might think of an ADC. Having said that, we've also had an interest in recognizing that there is a role for ADCs. We have our own efforts both within and continue to track things happening outside on what is going to be a meaningful ADC that we could bring into the tumors that we choose to focus on.

[ Sheeba ] do you want to maybe comment a little bit on -- build on the ADC part? And then I'll go to your last question.

Yes, yes. So first, I would agree with you, Shreeram, this was very intentional to build our radioligand therapy platform, thinking that, right, it's an opportunity to deliver radiation selectively to tumors, and we have a chance to learn. We're the leaders in this space. We have the opportunity to learn from the clinical studies and iterate back on that in research. So that's been very intentional.

At the same time, we're thinking about how we can take the ADC technology, which is really a targeted delivery of payloads, right, small molecule payloads, and has classically been pan-cytotoxics that have worked quite well in the solid tumor setting, although they do have some safety challenges.

And so the approach we're taking is our strength internally is really in the chemistry that we've done, and we have a long history of really innovation in the small molecule drug discovery space. And so we're taking -- developing what we call biology matched payloads and delivering them selectively to tumors. And that's kind of the next wave that we're bringing forward. And again, really thinking about where pan-cytotoxic ADCs may play a role and complement the work we're doing with RLTs.

So I think -- I mean, I think what we have decided is that we get focused on specific tumors. And we also are paying attention to areas where there's true unmet need, like PDAC. We aim to deploy against the modalities that we believe have the greatest potential to make a difference. We are deeply focused on RLT. But we remain open, of course, to continuing to evaluate other platforms, and this conversation will continue.

And most -- on the valuable contrarian asset that you have?

You mean that something that we see as valuable, but you don't?

Yes.

I think that the community in general is, in my view, from my perspective, appropriately waiting to see how all of this effort in RLTs is going to actually play out with the next visible meaningful therapeutic index delivered beyond Pluvicto and Lutathera. And we understand that. And we believe that that's going to come from one of the many programs that we currently have in the clinic.

Having said that, they are all, of course, still in early stage. And the key test is going to be is the data that we deliver demonstrative of a disproportionally better therapeutic index than what's currently available.

All right. I think we're at time. Steve, do you want -- one last question. Okay.

Can you speak to the data from the competitor that could challenge Scemblix? Presumably, you don't think much of it because you're rated -- you raised guidance this morning. And also, do you think CDK4 alone can beat CDK4/6?

Sure. Maybe Dushen, you take the first one on Scemblix, and then [ Sheeba ], you take the CDK4 one.

So the data we've seen in the Scemblix competitor I think is very early data, small number of patients and in a later line of therapy. And I think really where we're adding value with Scemblix right now is in the first line of therapy and it's going to take a number of years, firstly, to see whether that plays out with the competitor, if at all, if it does at all. But right now, it's mainly a small data set in later lines of therapy.

Yes. Can I just take a moment to just comment on that as what we're seeing with Scemblix? I would be remiss not to.

So I agree with what you're saying around what -- that data. I'm not thinking a lot of it at this moment, really because what we've seen with Scemblix is that it's the market leader, certainly in the third line where we first launched it, market share leader in the second line undeniably. And we're going for leadership in the first line as well. And we're seeing consistent growth in the first line. That's really where we're positioned. Earlier this year, I think we communicated we were at 10%, then we're at 16%, and now we're hovering at 22%, approaching having 1 out of every 4 patients start on Scemblix and were newly diagnosed with CML.

So we continue to see that as a lot of headroom there to grow. And anything that comes in is likely to be used in the back end of the disease. And when that happens, it typically does even drive the first line even higher because physicians feel like they have somewhere to go if the patient does progress.

And then maybe, yes, if I can address that. So first, I will say that Kisqali is the most CDK4 selective of the 4/6 dual inhibitors that's clinically approved, which we believe is one of the reasons why we've seen the overall survival outcomes in the clinical trials. But then the premise is, of course, if you can now just selectively target CDK4, which we know is the critical dependency in ER-positive breast cancer tumors, then -- and spare the -- especially the heme tox that is driven through CDK6 inhibition, we can achieve more durable and constant target coverage, and that will drive greater efficacy and greater combination potential.

So it remains to be seen. Of course, we're going to be doing that clinical experiment. But as you know, many CDK4/6 inhibitors have to do intermittent dosing, 3 weeks on, 1 week off. So the idea is, can we achieve more continuous target coverage with this selective molecule? And we'll see what happens.

Very good. On that note, Sheeba, thank you. Thanks, everyone. Thanks, Dushen. Thanks for Sheeba. Thank you all for your attention. See you next time.

[Break]

Okay. So good afternoon, everybody. I hope you had an enjoyable lunch and you've been enjoying the day so far. So welcome you to the neuroscience group discussion. And I'd like to start off by introducing you to the neuroscience team. Bob Baloh, who leads our neuroscience research; Tracey Dawson, who is representing all of commercial based in the U.S. I'm Fiona Marshall, Head of Biomedical Research, but a neuroscientist by background. And Norman Putzki, who is Head of Neuroscience Development.

So I think you can hopefully have already sensed from Vas' presentation our level of excitement about the neuroscience area. We, as a company, have been in neuroscience for a long time, and we have stayed very committed to the neuroscience field. So we have a deep disease area understanding, a deep bench of expertise.

But we've been frustrated, I think, over previous decades of really understanding some of the causal mechanisms of these diseases. And that ranges from the rarer neuromuscular diseases through to the bigger diseases like Alzheimer's, Unfortunately, we've been limited by the tools that we've had available to us, particularly to deliver modifying treatments to the CNS.

And I really feel that we're at a really key inflection point now where we have targeted delivery of oligonucleotides, both to neuromuscular tissue as well as to CNS and evolving now capabilities with gene therapy. And what we've done is to do a number of strategic partnerships or deals that have brought in new technologies or access to technologies to complement the expertise that we have in-house.

So you can see really a deep portfolio and really 2 key aspects, again, I think Vas referenced this, is maintaining our leadership in disease areas where we already have very established deep expertise. Obviously, in this case, multiple sclerosis. And also building on SMA, Zolgensma in SMA, the rarer neuromuscular diseases. And that is really one of the triggers for the acquisition of Avidity and our strong sort of belief in the opportunity in the range of muscular dystrophies.

And then going into areas where we feel there is just huge unmet need, either no treatment at all or very limited treatments. Again, this takes us into these neuromuscular diseases, but with different ways of accessing those, again, ranging from oligonucleotides. In some cases, we're the transferrin receptor to deliver to muscle, but we also have a lipid conjugate platform which came from our acquisition of DTX. And that is now in the clinic, enrolling patients for the treatment of Charcot-Marie-Tooth disease.

But same applies to the areas of neurodegeneration. So Huntington's disease, Alzheimer's disease, ALS and PD. Again, we're using the same types of approaches targeting the key genetic drivers of disease, but very much going after them with disease-modifying modalities such as antibody oligonucleotide conjugates or, ultimately, gene therapy.

Despite all of this, we still have a fantastic chemistry within Novartis, and we really believe that we can, where there are good targets for low molecular weight, then these are very good molecules, especially if they can get into the CNS. So many of the pathways that we're interested in, some of these arise actually in our immunology group, have direct relevance to neuroinflammation. And so that's really one of the reasons why we were able to move remibrutinib into CNS disorders and multiple sclerosis. And we've taken the same strategy in our early portfolio with a number of different mechanisms like complement inhibition. Again, many of these pathways have common drivers of inflammatory disease, from broad autoimmune diseases through to the CNS diseases.

So not spending too much more time. I'd very much like to open to questions and refer you to the deep experts on this panel.

It's Michael Leuchten from Jefferies. Two questions. Multiple sclerosis, as we think about YTB going into that space and also remi now going to semi-progressive, do you think there is appetite at the regulator to look at the disease differently and maybe allow more active agents more broadly? Are we stuck with the sort of segmentation of the disease as it's conventionally defined?

And then a commercial question on OAV-101. Can you talk about sort of the -- so you put a blockbuster number on it. So what's the rollout going to look like initial patient population phasing? Any color would be helpful.

So let's go to Norman on the MS and how you see the disease landscape evolving with these new types of treatments.

I think it's a great question. I've been in this field for like 20 years and we have seen the field evolve with its understanding of disease phenotypes. And I think that's -- you were alluding to how the phenotypes then are regulated in the regulatory language. I think generally, there -- the field is moving towards a more holistic understanding of the disease based on biology and not at -- as the phenotypes as they're currently described, RMS, SPMS, PPMS.

On the -- from a regulatory perspective, we have had this conversation with the FDA over more than 15 years at the end, and we have seen some changes. So when we registered [ BaFin ], for example, that triggered a whole new class label language with the FDA, which was the redefinition of what they understand RMS is, for example. So I think with the triggers in the community and triggers in clinical trials and data, the FDA will definitely -- well, I shouldn't say definitely, right? I think the FDA should feel compelled to think about that.

We have done a lot of this work also internally. In terms of big data approaches, we're working with the Oxford Institute here in the U.K. actually on large data sets, machine learning. And we just published a paper a couple of weeks ago in Nature Medicine to really understand better what drives disability progression in MS specifically. And that has actually turned out to be described differently and beyond those phenotypes that people have been using. So I would expect the field to move further into that direction.

Thanks, Norma. And Tracey, can I go to you on the OAV-101 question?

Absolutely. So first of all, we're super excited. We're under review with the agency in the U.S. and expect approval by the end of this year. I would first start with what's the unmet need that we think we can address. And we're seeking a broad label for teen -- or young kids, teens and adults over the age of 2. And that's on the basis of the STEER and the STRENGTH study.

And we believe that one of the core unmet needs that is -- we will be able to address is the frustrations with chronic treatments today. And this is a group of patients that did not have the opportunity to benefit from Zolgensma when it was first launched. And so we're guiding towards this multibillion dollar opportunity. And the way we're going to get to that, not just in the U.S. but globally, is by deep community engagement to activate those young kids, teens and adults to really make sure that they are aware that they now have a, for the first time, the choice of a onetime gene replacement therapy.

So everything that we're hearing suggests that there's a very high sense of urgency. There's also a very high sense of excitement within the community. And we would expect to be able to give a better update after the first few months of launch. But we feel very confident that the things that we have in place to activate that community as well as the education that we're doing with physicians will stand us in good stead to achieve that multibillion dollar opportunity.

Florent Cespedes from Berstein. Two questions, please. On myasthenia gravis, could you maybe share with us how you will differentiate the different products? And so we know that the disease is pretty heterogeneous, but if you could give a little bit more color on this would be great. And then on earlier pipeline, could you remind us what is your strategy? What's your view on the next step on your projects in Alzheimer's disease?

Okay. Norman, do you want to cover the myasthenia gravis question, the different molecules that we have positioning there?

Thank you, Florent. So you've seen this -- the field myasthenia gravis is incredibly active. I think that reflects the heterogeneous biology and the different needs that patients have. And I think with our own pipeline, we currently have 3 active programs in the clinic, and we're actually really excited about the opportunity that we have across the spectrum.

When you look at the various programs, so we have remibrutinib in an ongoing myasthenia program, we have LNP or complement inhibitor, and we have YTB going on. I think they're all differentiated in terms of their mode of action. And depending on the data, I think they will find its place somewhere in the treatment algorithm. So I think without data, it's hard to preposition that.

Maybe I can hone in a little bit on remibrutinib because that's -- Rhapsido today with CSU, we have the ongoing MS program. So it's a really important medicine for us as a company that's evolving, and I think it can play a really important role across multiple autoimmune conditions. High efficacy, clean safety profile. If that's something that we can maintain also in the neuro indications, I think this offers a really strong value proposal across myasthenia gravis, across multiple sclerosis.

Can I add one things? Because I think -- I don't know if you mentioned it, but I think the other big opportunity is that today, if you look at myasthenia gravis, it's largely treated through IV and subcu treatments. The beauty of remibrutinib and also with iptacopan is that they are orals. So these would potentially be the first orals to come to market in myasthenia gravis too. And I think for patients, that's a really important point for them because it allows them to potentially not have to be in an infusion center or be tied to a subcu injection. So I think that's something that will definitely be very interesting to the community too.

Maybe I'll pick up the Alzheimer's one quite quickly. So for Alzheimer's disease, again, we see this as a huge unmet need. It also falls into the category where we actually understand a lot of the drivers of the disease. Some of that comes from the genetics, some of it comes from a study of the progression with better imaging capabilities.

So the 2 most advanced molecules are VHB937. This is a TREM2 agonist antibody. TREM2 is identified from genetics, both mutations that either predispose you to Alzheimer's or actually can be protective against the background of other genetics. And so that one is moving forward. We had good target engagement. We have inflammatory biomarkers that we can use as a readout. That helped us to set the dose and that is now going forward to a Phase II study in Alzheimer's.

We also think that has potential in other disease areas. And so the one that's most advanced in actually is ALS. The whole area of microglial biology is one that we are very interested in and continues to build up in terms of level of validation.

So the other main driver of Alzheimer's disease, which is best correlated with the pathology of the disease, is tau. And tau pathology occurs downstream of beta amyloid. And data coming out of the beta amyloid antibody shows that the best predictor of a response is not the reduction in amyloid, it's actually the tau reductions. And some people, interestingly, in those studies were more resistant to reducing tau. Actually, there was an interesting gender difference as well. Women were less responsive to amyloid and maybe have a more tau-driven disease.

So our next most advanced molecule is an antisense oligo to tau. And that has the advantage as well over tau antibodies that it targets intracellular model.

And then behind that, again, we also are very interested in inflammatory pathways that we think are contributing to the disease. And we have a number of different molecules that maybe come from our immunology area that have potential to move into Alzheimer's as we go forward.

It's Matthew Weston from UBS. Two please, if I can. One, a commercial question about, I guess, the intersection of rare disease and mainstream disease that neuroscience has the potential to hit. Because you've got remibrutinib price for CSU, but you also raised iptacopan as well in myasthenia gravis and taking remi into MG and MS. I know the dose is different in MS. I actually don't know, is the dose different for MG? But how do you think about pricing those molecules to try and bridge therapeutic categories when you're -- today, at least, those TAs have got very, very different price points for patients?

And then a second question, Huntington's disease. I mean it's probably one of the biggest areas of unmet need in neuroscience. It's one where Novartis has tried hard, others have tried hard. Can you remind us about HTT227, why you think it's different? And when we're going to learn more?

Okay. Thank you. So Tracey, do you want to take the pricing differences across rare and mainstream?

Yes, I can do that. So I mean, I think one of the things that's really interesting is that, yes, you do see very different price differences between what I would call like specialty mainstream medicines versus a rare disease setup.

One of the things that is really great about where we're coming from with Novartis is, because we play in both areas, we have deep expertise. And actually, if you take remibrutinib as an example, you look at how it's -- I mean, even playing in both immunology and MS, different doses, different brand strategies, these will be separate BLA, separate filing strategies, we will have separate pricing strategies for them too.

And then similarly, when we look at myasthenia gravis, when you look at how the interplay might be between remibrutinib and iptacopan given the price point differences, let's just be honest, there will be a price point difference, well, that will probably pay out more realistically and is how they're positioned in the treatment algorithm and how they're used.

But I think more importantly, we need to wait and see what the data tells us first. And so we're very optimistic not only in MS, but also in myasthenia gravis that we have some great opportunities that really address what are very heterogeneous diseases. And so I think our next milestones would be the data readouts, which are -- I'll throw that one to Norm about just the clinical plans.

I was waiting for somebody to hand me the mic, but I...

Yes. We've got them.

If I looked confused, it's because of that, not because of your question. So on the -- let me start on the -- maybe on Huntington's disease first. I think that is one of the most exciting programs, particularly at this point in time since we acquired the license from PTC. You will remember the positive Phase II trial that showed a dose-dependent reduction of HTT, broadly in the range of what would be expected to lead to disease modification in this horrible condition. But that's the experiment that we now need to do to show that we can translate HTT reduction to improve disability outcomes for patients.

We had a really productive half a year or so with many regulatory interactions that helped us now to plan and to execute the Phase III soon in 2026. We are ready to go with a Phase III program for patients with Huntington's disease. You can expect a single Phase III study with a single dose, a placebo-controlled experiment, with the duration, if we look at full study, approximately 2 to 3 years based on our understanding of the disease in and by itself.

We will make every effort along the way to see if there is -- what is the potential for accelerated approval. So patients are waiting. I think if we think about unmet need in Huntington's, it is pretty obvious to everybody. We have the Phase II data set. We have ongoing open labeling extension with 2 dosages in Stage II and Stage III patients. So we are continuously investigating those data if the support -- if they can support accelerated approval. We will also use opportunities during the Phase III to align with the regulators of an approach on earlier data readout, to also support accelerated approval, plus/minus all the emerging data that we will look at in its totality.

It's Simon Baker from Rothschild & Co Redburn. I'll stick with the question on Huntington's and then come on to Avidity. There was an interesting paper earlier this year looking at the significance of CAG repeats in HTT, where everything is fine, everything is fine, and then you tip over limit and all hell breaks loose. What would -- firstly, what's your view on that? Secondly, what implications does that have for trial design in this space?

And then secondly, moving on to Avidity and del-zota skipping in DMD. Just wondered what lessons, if any, can be learned by Sarepta's recent experiences, both from a clinical point of view, molecular and regulatory?

Okay. So I mean, Bob, you've been thinking about the repeats, implications, something we've talked about recently. So why don't you have a go at that?

For sure. I mean the field has been sort of changed by the observation of mutations or GWAS hits, I should say, and DNA damage repair pathway, right? So there's a whole series of those. And that then led to this sort of exploration around somatic expansion. So expansion of the CAG repeats during a person's lifetime.

It's still not clear yet the full dynamics of that because it's extremely hard to measure, right? So you would have to measure within somebody's brain exactly the length of the repeat in every single neuron. So not exactly easy. But if you try to interpret from what data is out there from the studies that you're talking about, it does expand in the brain, it could be that the onset of disease or progression of disease correlates with phase of rapid expansion.

And so what does that mean? One, that could be an interesting place to target. And I think us and many others are interested in the very early preclinical space of how much you do that. I think the other thing it indicates, which is probably obvious, is that in any of these diseases, you're going to want to go earlier regardless. Whether that mechanism is important or not, actually, it's probably the same answer, but it does add some emphasis to that.

So I think it really is an important area to explore. I mean we see somatic expansion actually in a lot of these repeat diseases, and it's been debated for a while. So this might be one of the first areas where we see where that's true. But then the second question, yes.

Overall lowering of Huntington and votoplam, that's -- maybe say something about the trial design...

Yes. I think Bob you alluded to like the biological plausibility of where you can make the biggest difference, right? So I think for us, a starting point to that, it's definitely early symptomatic patients for the upcoming Phase III trial. We haven't disclosed any details yet on the exact inclusion criteria, but that is broadly the target population that we will plan to include. I think generally, going as early as you can, I think that is something that we are certainly planning for also for consecutive considerations in Huntington's disease.

Okay. And then the other question was around del-zota exon skipping. Any read-across from other trials?

I mean I don't know that a read-across is the right way to look at it, at least from my perspective. I think it's more that the story of Avidity and the story of the potential success there is about delivery, right? It's about getting the drug to the target tissue at the right levels. And we've known for a very long time that naked antisense oligonucleotides, PMOs, et cetera, don't get very well into muscle. And so the degree of [ splice for rescue ] that you will get from those and then dystrophin restoration is relatively low.

In the first generation, you would often present it as a level or fold above baseline, which baseline, of course, is extremely low. So even if it's 100-fold above, it may not be a lot. It depends on how low the person was, right?

So with this new generation of targeted delivery, you're talking about actual percent of normal levels of dystrophin, which was shown by the del-zota somewhere in the 30% range, so far. I think that's bringing what we think should work, but to another level.

And I think there, one thing we were -- Vas alluded to, and we were really struck by, as part of the whole package for the data supporting, Avidity's platform, was not only the degree of dystrophin restoration but also actually the CK levels in those patients, which is normally extremely high, was essentially normalized. And in the crossover group, all of it came down. And that was really an observation that I don't think has been made in that field and suggest that, again, the delivery allowed us to hit the mechanism that we were trying to achieve. So I think it's really exciting. And then we'll probably talk again later about how that delivery mechanism goes for the other diseases.

Okay. Just get some questions from further back.

Steve Scala from TD Cowen. Three questions. So Novartis seems surprisingly excited about the BTK class overall. Tolebrutinib, we'll see if it gets approved, what label. Fenebrutinib, efficacy look promising in 1 of 3 studies, and it has liver tox. Remibrutinib is in Phase III, so the jury is out. So what do you see in this class that is interesting other than oral?

Secondly, does Novartis have a brain shuttle program? And if not, do you not believe in it? And then lastly, if GLPs, GLP-1s, prove beneficial in Alzheimer's disease, which we'll know, I guess, in 2 weeks, will Novartis just sit this one out, or is there a strategy to get involved?

Okay. Well, let me start off with BTK compounds because the range of BTK inhibitors are very different in their chemistry and mechanism of action. So these are kinase inhibitors. Kinase inhibitors, generally, especially ones to get into the brain, have been historically prone with a lot of problems that relates to either selectivity across the kinase class as a whole, because of particularly targeting the ATP binding site, they're very conserved. So trying to just hit one of the family is very difficult. And then often, the types of molecules can be prone to liver toxicity. This has nothing to do with BTK, the protein, that's not even expressed in the liver. Again, it goes back to the chemistry.

And so often when you have a target like this, it takes rounds of work of molecules and improving on those until you really can get to the ones that give you the level of kinase inhibition that is required to generate the efficacy. So often, the past failures are often related to dose limitation where you're not really blocking sufficiently on the kinase.

Now the way that remibrutinib is differentiated, first of all, it's a covalent inhibitor, which means it binds irreversibly to the target. That also reduces the circulating levels, which reduces off-target toxicity. But more importantly, the first generation of covalent inhibitor is still bound to the classic ATP binding site, so they weren't very selective.

And what our chemistry team did was to understand, using structural biology, that the inactive form of the protein actually had a different shape and they were able to design molecules that bind to the inactive kinase form that is less conservative across the class. So it took the molecule into a different chemistry space and allowed it to be more selective. So these molecules are all very different, and we do think we have the best-in-class that allows us now to have a very clean label. We have dosed, Norman, would you like to say how many now with remibrutinib?

Yes, I mean, we have had this compensation over a couple of years. So I just continue to be excited, and I can add some more data points now...

You increasingly add the number of patients. And we don't see any liver signal. So that's why we have a clean label with remi in CSU. So I think that validates the whole chemistry approach. And that is why we're so excited about it, because it's allowing us to go into different disease areas like CSU where you need a very clean profile, but also has the CNS penetration so it allows us to go into some of these other indications.

So let's move on -- yes.

Because like our MS program is progressing really well. So studies are now pretty much fully recruited. We expect to read out next year. As you know, we have taken forward 100-milligram BID into both MS studies and also in the myasthenia gravis program.

In terms of the data points that we need to get even more excited, I would say that we now have more than 1,600 patients exposed in the 2 RMS and myasthenia gravis trials beyond 6 months treatment. And we are in a great position to compare, for example, safety concerns like liver toxicity across programs. So we have run a similar program where ofatumumab was compared to teriflunomide in the past, and we know what the incidence of liver events in the blinded trial would be. And now we're running a similar program where we know exactly the liver tox that our competitor and comparator drug should actually have, and we haven't seen any quantitative differences. And of course, we also look into qualitative cases.

So I think as far as I know, our remi BTKI program is the only MS program or BTKI program in neuro that has not been put on a clinical hold. And I think data is emerging quite nicely. Also in terms of study methodology, it's an event-driven trial. We monitor that. We have an adequate event rate. We have adequate patient numbers. And the trial is designed to deliver Kesimpta-like efficacy. And next year, we will see where we're at.

Okay. Bob, do you want to comment on brain shuttles?

Sure. I'm glad you asked. I mean I think that's been an area of huge activity for us actually over the last year, and it's something that we haven't had a chance to talk about in some of the other sessions. So the first thing to point out, I suppose, is that you don't just have a brain shuttle and it works for everything and then you've solved the problem, right? I mean I think we're getting very close to understanding things that will move proteins, those biologics as well as RNA, into the brain. That technology is advancing. There are several different transporters that are being looked at.

And in the last year, because we were really focused on how could we accelerate our own internal efforts for both biologics and RNA, we did 3 deals in the space. So Sironax BioArctic, and each of those was to partner with some internal assets that we have to see if we could improve their ability to shuttle into the brain.

And the last one was Arrowhead, which is TFR-based platform, which also then shuttles in RNA, and that's to target synuclein. That lead program actually is going to be, I think, really exciting. Because when you take an approach to knock down synuclein, one has to really consider the biodistribution, and the ability to access the deep brain structures through the IV route is actually potentially going to be critical to get to the right structures in that disease.

So we have a lot of activity going on in brain shuttle. We're, in fact, super enthusiastic about it. I suppose the last thing though is, of course, Avidity is related to this. What we've learned with particularly TFR is that you can tune its properties to better to deliver to either muscle or brain or other tissues potentially. And that engineering is something that they are obviously very good at. We are very excited to see as that moves forward and how we can leverage that for some of the other efforts we're doing to bring these biologics and RNA into the brain.

So I often though will also say, it's not like we're just done with that. You do 3 deals and it's over. I think this is going to be an evolving field over the next 10, 15 years. But it's going to create a potential future where we have access at least to the technology of the blockbusters that oncology and immunologies had for a long time because we can access the tissue with things like biologics, for example.

And maybe I'll just do the GLP-1 question. So I mean, I'm hopeful that result is going to be positive. I think it would bring huge medical benefit to patients, who have a risk of Alzheimer's disease or who are already taking GLP-1s. But I think if it is positive, it's going to open up a lot of really interesting components because there are 3 possible mechanisms by which GLP-1 could be impacting neuro-degeneration. 1 is through a cardiovascular effect. And we've known for a long time that cardiovascular disease is a risk factor and a major contributor to Alzheimer's. So that we've even discussed whether we should actually be looking at some of our own cardiovascular molecules in the context of Alzheimer's. So that's a discussion we have.

The second area, GLP-1, it does reduce inflammation, particularly in people, who have obesity and that will provide further rationale for taking -- targeting neuro-inflammation as a modifying treatment in Alzheimer's. Again, we have a lot in our portfolio already coming forward, and it would increase that confidence in that approach.

The other opportunity is that there could be a direct effect of GLP-1 agonist within the CNS and that certainly GLP-1 receptors are expressed on neurons. But I think, again, that opens up a lot of other opportunities for that direct targeting maybe through different types of modalities low molecular weight molecules that could get in. So whenever we get a breakthrough in these difficult diseases, I think we all have to celebrate and think about how we can really build on that.

I'll just go maybe third back people haven't had a chance to.

[ Zane Abraham ], JPMorgan. My first question is just to build on the remi question previously in terms of -- I think you mentioned one of the issues with the previous trials was the selectivity of the BTKs and the fact that they weren't able to dose up. And it sounds like you're confident in being able to show KESIMPTA like efficacy on ARR because of being able to dose up.

But one of the other issues they had was also the lower-than-expected Aubagio annualized relapse rates where I think it was quite significantly lower than [indiscernible]. So just based on the patients you've enrolled, how are you're thinking about Aubagio ARR rates and you're confident in because it's like efficacy on ARR, but how should we think about the level of efficacy you could show maybe on disability progression would be the first question.

The second one is on disability. You started the trial in SPMS, but you haven't started one yet in PPMS for remi. Is that because of the consideration versus YTB323? Or is there something else holding that back from starting?

Yes. So we started the neuro programs with 100-milligram BID, and that's now the case for all programs we are running in the neuro indication. We could do that because we -- I think that's the only BTKi in neuro that hasn't seen dose-dependent toxicity in the respective Phase I trials.

And I think we have seen in other programs with BTKi that there are different responses depending on the dose and the molecule. So I think that just to underline the point that the chemistry makes a difference, right? So I think that's pretty clear on both, I would say, Phase II efficacy and then Phase I, II, III kind of safety profiles.

Our trial is designed to show Kesimpta efficacy, and we are looking at an event-driven design. So we will monitor it and at the point where we have sufficient power to detect it, we will read out the trial, so which is going to be somewhere in the second half of next year. So if the biology pans out, this is what we are going to look at. I don't know, if the molecule is going to work. I think it is going to work. We modeled it. We didn't have a Phase II. So we will determine the exact efficacy there.

The trial is also powered to show effect on disability progression at the same time. There's different power for 3 and 6 months confirmation. But generally, I think it's important these days to demonstrate to patients that you can -- that you can suppress the relapse focal activity, which is the mainstay of the disease for many patients still.

And then you want to hit on disability progression as early as you can, I think, in the treatment paradigm. We have seen with like anti-CD20s like Kesimpta used a lot that I think on the one hand, early high effective treatment is a determinant for better disability outcome. But the reality is that 50% of patients are still not on high-efficacy drugs. So there's still a lot to do across the entire spectrum. And I believe that remibrutinib, if the plan pans out as we have as we have defined the TPP for this molecule can play a really important role going forward. We have just announced that we would do a non-relapsing SPMS trial, which will include a population similar to other programs that you have seen in the same -- in the BTKi space. The trial is actually ready to go now.

So really super excited that we could add it. I think we have changed our mind a little bit on this in the sense that we got a better understanding of what is the biology of BTKi. We have seen evolving better data, I would say, in terms of CNS penetration. So ultimately, with everything that was done in that clinical space now, we feel pretty confident that's something we should do.

PPMS, lastly, it's just a small segment of patients. And I think if you -- running a trial in a stand-alone trial in PPMS now is going to be really challenging. It's going to take really long to do it. And given that this is only 10% of the population, I don't know how much a second or third to market BTKi could still do.

And the last thought is that maybe the regulatory framework is changing anyway. So maybe once we are through all this development with the BTKis, maybe the regulatory framework would also allow us different definitions of the population that is allowed to use the medicine, but I think that's for the future to determine.

Do we go to next, Michael?

Michael from Jefferies. Just going back to Avidity, please, the HARBOR trial in DM1. I noticed the secondary endpoint was changed about a year ago from a more general muscle strength and function endpoint to hand group strength and then also more of a quantitative composite score as opposed to a more precise one. From a regulatory perspective, can you just talk to why that doesn't matter or may matter also for the interim readout next year?

Yes. Who would like to do that one.

Trial endpoints. I mean the DM1 program is really super exciting. We have been excited about this for many years. And I mean, we got to this point after 2 years of work ultimately when we pulled the trigger on the proposed acquisition. We had the opportunity to review the data of the ongoing trial and obviously, the previously published data very carefully. So I think we have a very high level of confidence that was shown in the earlier trial can be replicated there as well.

The testing strategy, I think, should take into consideration what are the regulatory expectations in terms of showing an effect that is relevant for patients on certain functional markers and also patient-reported outcomes. So I think in that context, I would interpret the relative relevance of the functional measures that are included in the trial, like upper limb function, strength, walking, I think all of these things ultimately should show something relevant for the patients.

So you need to look into PROs to determine this kind of relationship. I think that will be key for the ongoing DM1 program and then also for the FSHD program later. I think that's going to -- that's the task at hand.

In terms of the actual clinical relevance of the endpoint, do you want to comment? I think -- I mean, muscle strength is one thing, but I think functional outcomes really matter a lot.

I mean there's a lot to say. I think going back to the first point, I mean, you're hitting the root core pathophysiology of the disease. You see a very strong signal in myotonia, which is one of the main measures and this is reflective of chloride channel dysfunction. The rest of the events, which then drive muscle degeneration over the lifetime of a person, it's going to take a longer period of time.

I think it's quite striking in a way that when you have a trial like this, where the average age of a person in the trial was around 50, and you still are seeing a difference at least in the early signals in that time period, right? So I mean, I think by knowing that we're really confident that you've hit the root cause biology that you're seeing a very clear indication of that from what is basically a clinical signal, but which is myotonia and then seeing that play out into functional outcome measures is something that we're very encouraged by. The PRO that they've used the DM1 active is very driven by motor function. And we think it's likely very meaningful to them and is something that is a useful scale.

So yes, I think that...

It actually like we were it's pretty striking that you've seen in a relatively small trial in a relatively slowly progressive disease early on a signal on a PRO that is related to some of the functional measures. I think that is a really strong signal for confidence that this is going to work out. We're really excited about that.

Matthew from UBS again. 2, please. 1, a very quick follow-up on OAV-101, which is just to clarify, the reason that this is multibillion versus normal Zolgensma today is because the prevalent population is bigger than the incident population. Is that kind of the way forward? So we have a big bolus of patients we can treat now, but over time, it will shrink back down again because there is the Zolgensma patients treating newborns and we won't reload that patient bucket. Is that -- am I thinking of it right?

Correct, yes. So when you think about the gene therapy population, you will have a high prevalent population that over time will get depleted and then effectively, you're left treating the incident population. Yes.

Brilliant. Absolutely fantastic. So then the real question on Avidity. So Harry has made clear 1 to 2 percentage point margin diminution because of the need to spend on R&D at Avidity. If we look at what Avidity analysts had in, then that's a multiple of what was assumed for the R&D spend at Avidity.

So it's just a simple question for the scientists that are going to be spending the money. Is it that basically previously, people doing our job got it wrong and Avidity was just going to spend a ton more money than we thought they were or you're going to do something differently that means you're going to spend a ton more money?

I'm glad you covered that because it sounds like we have more money than I thought to play with. It's good news actually.

Well, look, I think I'll start with more of a scientific framing. I don't know that I can speak to the financial framing of it. I mean it is -- with this excitement comes a complex novel format, right? So we're able to deliver with this antibody oligonucleotide conjugate. We have to figure out exactly how that works. We have to see what it can do and see its ultimate potential. I mean, I don't think that I can comment on how that would affect the margin. How would...

We had to pay Avidity in the first place, which they didn't have to pay themselves. So that's one difference for sure. But I mean, obviously, we want to make a success of this. And so whenever we do a deal like this -- and again, it's a bit of a tip of the iceberg. These 3 are just the top, but they actually have a lot of earlier programs and the opportunity as well to take this technology into other disease areas.

So I think that we want to invest the success and make sure we also do the type of trial we would do as Novartis and also take it globally, that's a different strategy from what a biotech company would have.

We'd be happy to spend less if...

Maybe I will add one more thing because I do think as we bring the programs in-house, we'll get a much clearer picture of exactly all the contributions. The one area where we know there will be incredible amount of synergies in commercialization. You actually think about the skills, the capabilities that we've built today with Zolgensma and SMA, all of these indications stack right on top.

It's the same treating physicians, largely the same treatment centers. So we'll be able to expand and leverage a lot of deep capabilities that we already have in rare diseases. So that is one good part of the synergization, the synergies that we can get from this deal. So...

We got one more question.

We have one more question from the web, maybe the last one.

From Joe Kim. Are there any mechanism that can be considered to accelerate potential approval time line for the Huntington's program?

Maybe we use this as the last one to close.

Yes. Yes, I think I talked to this a little earlier, right? I think we absolutely will exploit every opportunity that there is with evolving data. We work very closely with the regulators. I would say the interactions and the dialogue that we have with the FDA has been really constructive. I think we have a very good idea of what the expectations are.

And again, with the Phase II that was controlled, 2 dosages, stage 2, 3 patients with an ongoing open-label extension, accumulating data there with some more understanding of how does the Huntington reduction lead to improvements in terms of disability outcomes for patients. I think while we generate all that data, there will be opportunities for at least the exploration of accelerated approval.

I think it's pretty obvious that the regulatory agencies and Novartis, we're on the same page when it comes to the unmet need that we want to address. And I think Huntington's disease could be one of those perfect examples actually where with evolving science, you can get those medicines to patients faster than in the past.

Okay. So thank you. I'd like to thank the panel and thank all of you for your excellent questions.

[Break]

All right. Well, welcome, everybody. This is the final session for today at Novartis' meet the management. This is a corporate session. Joining me today are Ronny Gal, our Chief Strategy and Growth Officer; Harry Kirsch, our Chief Financial Officer; Steffen Lang, our President of Operations; and Mukul Mehta, our incoming Chief Financial Officer.

So for this session, we'll focus on the overall long-term strategy of the company. As you heard this morning, we believe we're well positioned to continue to build on the strong results we've delivered over the recent years with an attractive growth profile, the upgraded guidance of 5% to 6% through 2030 and a robust pipeline with 30 high-value assets advancing in a significant number of late-stage readouts over the coming year.

And so with that, we'll open it up to questions. Florent?

Florent Cespedes from Bernstein. 2 questions, please. First, on M&A, we've been pretty active over the last couple of quarters on M&A. Do you still have some, let's say, assets that you would like to add to your pipeline late stage? It seems that you have a pretty full pipeline, but early stage. Any color on which areas and which stage assets would like to add to your portfolio?

And second question, a couple of months ago with [indiscernible], you sent a letter to the European authorities or previous letter about the fact that the drugs value-added is not really recognized by the payers. Could you maybe share with us your interactions with some countries in Europe and if they have changed their mindset or if they agree, but they cannot do anything due to the budget constraints. So any color on that would be great.

Yes, absolutely. Thank you, Florent. So first on M&A, I think our strategy remains unchanged. We continue to look for high-value assets in the 4 core therapeutic areas, assets that fit within our technology platform, not limited by size, but really focused on assets that can improve the growth profile of the company over the medium and long term.

And the way we look at it is we are very confident even without additional deals beyond the normal deal inflow that we can deliver the guidance that we've set forth. We more look at it as any additional deals that can further derisk the profile and also add to the strength we like to build in individual therapeutic areas.

I actually hand it over to Ronny to provide any more color he would like on the M&A.

So first, great to see a Bernstein analyst here. Second, the partnering and M&A areas are focused on our 4 core therapeutic areas. And you mentioned the assets either late preclinical or Phase I transitions. There are generally multiple mechanisms coming through on each one of our 4 therapeutic areas on all 4. So what we are primarily aiming for when we look at those are assets that are -- provide a significant amount of novelty, so either first-in-class assets or later in class assets, but with a clear claim what they would be best-in-class. And those will be generally the focus.

We are excited about bringing more neurology assets in. There's a few additional diseases we'd like to target with either RNA or gene therapies. We are excited about new mechanism of action in cardiovascular. You kind of seen the mechanism we are focusing on. The additional risk factors are generally coming into focus.

In immunology, there are additional multiple therapeutic areas, additional multiple mechanisms that are applied to multiple diseases, who are generally coming in as people map the progress of the various diseases, there's a big effort around there.

And which therapeutic -- in oncology, that's always -- there's always additional areas coming in. We are looking either for additional targets primarily, essentially cell surface molecules not yet identified or mechanism-based efforts that are not with a particular focus on prostate and breast, but also looking for additional therapeutic areas where there might have been a fairly low standard of therapy, where patients progress within a year or so on the first-line therapy, where you can actually get a molecule that is going to extend the duration of therapy significantly. Those will be the primarily things we understand.

So and then on Europe, we are clearly in a situation now where more -- as more companies move forward with agreements, I would say for Novartis, we're engaged with the administration, no specific time line, but continue to have good conversations on a potential agreement with the administration that this will fundamentally change how the markets in focus and likely Europe more broadly has to look at new medicines.

I think it will make it challenging for companies that have medicines launching within the scope of the agreement to launch if net prices in Europe don't approach the net prices in the U.S., except in the private market, where, of course, companies would make their medicines available.

Now we've made that clear to -- and I've made that clear, but I think the industry overall has made that clear to key policymakers in Europe as well as at the European Commission. I think there's the beginnings now of understanding that the approach in Europe needs to shift and how medicines are valued as well as some of the barriers that exist to growth. So these are clawbacks and other taxes that are applied to excess growth within markets.

But I also think that we won't see rapid change. I mean I think there's an awareness. I think you'll likely see some medicines not launched in the public market. You'll see awareness growing in the public that certain cancers or other diseases are not well treated relative to the standard of care in other parts of the world. And that hopefully will start the change that we hope to see on how medicines are valued. Matthew?

Matthew Weston at UBS. 2 questions from me, please. I think one thing that's been debated a lot today has been your comments on Kesimpta and not raising the peak sales expectations, which was something I think a lot of people anticipated. Can you just clarify a little? Is it that you expect us to see growth slowing in the near future?

Or is it just that you want to make sure that if we're going to get more excited about remi and MS, we can't double count 2 new MS therapies that would have an impact to 2030?

And then one for Harry, the Avidity deal, and I guess, all the string of M&A that we've seen, share buybacks have been a critical feature of Novartis or critical. They've supplemented earnings growth at Novartis over the last few years. Should we think of the buyback slowing down in 2026, '27 in light of the Avidity deal or there's more than enough cash flow to do both?

So first on Kesimpta. And just to clarify, the brand is doing extremely well. You see that in the quarters, you see that over the years, and that growth looks very strong. But I think in the context of 2 things, we would like to see how things evolve in the next year or so before thinking about any further upgrades.

1, we will understand better the BTK inhibitor data, both from our competitor and for Novartis' own medicines. And then based on that data, be able to see what role will BTK inhibition play at the end of the decade and into the next decade for multiple sclerosis patients. And then factor that in, I think that's a prudent thing to do.

And then the second is the expansion of the B-cell class, particularly in the United States, where we need to see the class share continue to grow for the market to be large enough to hold all of the B-cell monoclonal antibodies and the orals. So those are the 2 things we'll be watching. It's not meant to be any concern about the brand. I mean the numbers speak for themselves and the momentum is really strong. But I think we just want to be prudent as we have more milestones come out over the course of the next year, and then we'll reevaluate at that point.

And then Harry, in terms of...

Yes. So cash flow, share buyback, M&A, as you know, we have significant EBITDA of $23 billion roughly at the moment. Our cash flow last year, $16 billion, this year, $16 billion after 9 months. So clearly on its way to $18 billion, $19 billion. And then over the years, 2, 3 years, clearly around the $20 billion range. So we have significant cash flow and a strong balance sheet, right? So with that, Avidity deal doesn't take away from our ability to also do share buyback and some further bolt-on M&A.

Now the share buyback we have announced in the summer is like $10 billion over 2.5 years. So not to give you a formula, but it's like a $4 billion per year roughly. And then it's what we have historically done on top of buying back employee participation shares to not dilute our shareholders anyway as a base.

And then we had a few years where we bought the Roche stake with $15 billion and like 1.5, 2 years. But I think what we have now announced is probably more what -- and Mukul and Max will discuss it with the Board, but it's more kind of normal level, which we had before the Roche stake divestment and also see now in this range, plus/minus $4 billion a year, right? So not super high, but also always part of our capital allocation. And in the end, it's also not a strict formula. It depends on how much Ronny and Vas find in terms of bolt-on M&A.

But we see it as, I think, a regular part of our capital allocation program. Simon, and then I'll go to Steve in the back.

Simon Baker from Rothschild & Co, Redburn. Two, if I may, please. We've had a huge amount of debate recently about what we pay for drugs, but the debate on how we pay for drugs has gone a bit quiet in recent years in terms of novel funding mechanisms. And the reason I ask is if your efforts in autoimmune cell therapy are successful, that could be an interesting debating point because you're going to have potentially huge economic advantage over time, but a bigger upfront cost. And what does that mean for budgetary constraints? So just where are we with the debate and appetite for looking at different ways of paying for things?

And then secondly, going back to the slide you talked about this morning, Vas, on the impact of AI. It's always refreshing to see some talk about the impact of AI on pharma who isn't trying to raise Series A funding and consequently massively overselling the opportunity. But I just wonder if you could give us some ideas of where you see the biggest bang for your buck in terms of save time, or money, or both by the application of AI?

So thanks, Simon. So first on payment models, we do have a lot of experience on these novel payment models between Kymriah and Zolgensma. We've had the opportunity to roll them out really around the world and seen the challenges that there are significant challenges for doing this, but there is often openness to do them as well, particularly for onetime therapies. So I think that with CART in immunology and the whole immune reset portfolio, and given that depending on how big that gets, I do think there's an opening now to take that up again.

I think one of the things that's clear is that you need a big enough volume of patients and a big enough cost to make the system really want to take on the complexity. I think for one-offs, it was really hard, I think, in the end because it just isn't worth tracking all the patients and figuring out how it works. But I think there is the potential for immunology. I think -- the other thing I'd say is if we do continue to see the levels of remission or significant reductions in disease activity, I would expect the cost effectiveness to look really good for these therapies. And you'll remember, Kymriah had very good Zolgensma had very good cost effectiveness. And that will mean that for most health care systems around the world, there will be a lot of interest in doing this rather than long-term chronic care or hospitalization for patients that are on the end stage. So I think the health economic case will be there. There will be the budgetary topic, but I think we can manage it.

I think on AI, and I'll hand it to Steffen also to also give some more operational examples. We see 3 parts of the AI story at Novartis. One is just generally enabling AI to be used by the associates across the world. And that's -- we're one of the largest users of Copilot. I mean we have Copilot available. We also have the coding support available for the coders within the company, which isn't a huge population, but an important population.

Second, we do a lot of investment, as I noted on the slide this morning, on R&D productivity. That's both upstream in research, so -- target identification, but more importantly, candidate optimization, supporting candidates through preclinical and then optimizing clinical trials and all of the elements to accelerate the clinical trial process as well. Again, very interesting, and I think will pay dividends in the 5 to 10 years. And then, of course, all of the support around that in terms of clinical trial enrollment. When you look at that overall, on average in our industry, it can take 3 to 4 years from identifying a target to getting into the clinic, and 8 years from getting into the clinic to getting to an approval.

Can we compress that time line by 2 years, 4 years with AI? I believe that's possible over time. And then similarly, can you get to higher quality medicines, lower POS, better medicines for production from a production standpoint, all possible as well. But I think we have to see over the next 5 to 10 years, how that plays out. Where I do think we have a significant opportunity today is the third bucket, which is more just applying AI to the core processes, not super advanced AI, machine learning or anything like that, but very established tools to optimize how we work. And that's, I think, an opportunity.

Maybe Steffen, you can talk about it for manufacturing and elsewhere.

Yes. This is for sure, one of our key enabler for productivity that we have a huge automation program across our manufacturing sites and the functions supporting manufacturing. And we augment this automation with AI where it makes sense. And there are more and more examples where already today, this generates a lot of savings for us. For example, when we look into biotechnology, drug substance manufacturing, where we use living cells. Here, we use AI technology to help us to optimize the process conditions and to always deliver the higher yield batch week after week. And across a normal facility, this is easily $10 million to $15 million savings in a given year.

Other examples are in IPC, in process controls for aseptic products where in the past, with the human eye, we have done optical control to see are there particulates in the medication or not. This is now done fully automated with camera images and applying the right mathematical models and learnings. This is now done at an accuracy better than you and I to distinguish between air bubbles and particulates. Also here, nice savings year-over-year in the facility. And this is also very good for our network, our manufacturing network, which is focusing on high-tech and automation. And as I said, this is every year a larger contribution to our productivity savings.

And then also in the operations, we see opportunities within our third-party spend, which we're now really trying to tackle because I think clearly, with AI and some of the tools our associates have, we can get after the roughly $13 billion we spend every year of addressable procurement spend. So that third bucket is where I think you could see an impact in the 5-year horizon, not have to wait for the long run. Steve?

Steve Scala from TD Cowen. I'd like to follow up on Matthew's question on Kesimpta and maybe the less clear future. And I apologize if you mentioned this first one, but visibility on a biosimilar, does Novartis know that there are biosimilars in development? And secondly, these limited duration academic studies that are looking at kind of treating and stopping, that would certainly maybe curtail [ Kesimpta's ] future. So that's the first question.

Second question is there's this view that companies pursuing deals with Trump have some side agenda like huge tariff exposure and/or they want a special voucher and/or even other things. So is -- Novartis presumably would have no special side agenda. So does that mean that it's very likely that you will not sign a deal? Companies all tell us, well, we're in discussions with Washington, but presumably, that's always been the case. So that's not new. So what's new?

Yes. So I think first on Kesimpta, we do know there are biosimilars in development, and we do also expect that they will take advantage of the more abbreviated approach to development. But we still don't change our outlook that we don't expect significant biosimilar exposure for Kesimpta in the U.S. before 2032. We think entering perhaps in 2031, but that's kind of our current outlook. So that's not a driver. And as I said to Matthew's question, we are very confident in this brand and how it's performing. And we'll see next year, again, how these various elements unfold and then we can look at the peak sales guidance from there.

And I think on the discussions with the administration, there's nothing new that we can report publicly. So to your question, there's nothing new, but we continue to have very good discussions and continue to advance those discussions. But there's no set timeline for the resolution of those discussions. We don't believe we have significant tariff exposure given all the investments that we're making, the various things Steffen and the team have done in the supply chain to get inventory levels to where they are, and our overall approach. And we also, of course, would like to ensure the company is well positioned with the other policy levers the government has, but we'll just see how these discussions unfold.

So maybe at the back, and then I'll come back over to Michael. I can't see who that is.

It's Ben Yeoh from RBC Global Asset Management. One on AI and one on the Board. So just a follow-up on the AI question. On this third pillar, like you say, $13 billion in spend, and we're beginning to see impacts now. Is that broadly envisaged within your guidance and thinking about margin? Or could there be upside if that goes quicker? And if that does happen, are you thinking we just reinvest that because then we can grow and make better decisions? Or will some of that potentially come up in margin upside in that in terms of AI?

And then just at the very high level, I'd be interested, what's the most kind of constructive challenge that you get from the Board, or in that strategic thing? What is the Board saying about the direction that the company is taking?

Yes. Thanks, Ben. So first on AI, it's not embedded in our numbers. I think we see it as more of a way to free up more resources to invest in R&D, invest in potential deals and continue to bolster the long-term profile. We feel confident we'll get to the $40 billion just with -- it's a 40% margin just with the plan we have. And this is more just a way to free up resources to be better deployed for better returns for the organization and then ultimately for our shareholders.

I think the biggest topic on the mind of our Board, rightfully so, is actually when you think 10 years from now, how do you ensure that a company is set up of the potential size of Novartis, which depending on how you run the growth rates is significantly above $80 billion in sales at that point to be successful at that scale. And I think how does that -- what does that mean for R&D? What does that mean for your commercial setup? What does that mean for a whole series of questions, which I think is a very important question. I mean, when you have a company of that size, but in this sector where you're always having to deal with genericization events, et cetera. So I think that's probably the biggest topic on the long-term agenda of our Board.

Michael?

A question for Harry, I can't let you get away. Just margin structure. If I think about products that may have a little bit more in terms of fixed costs looking forward, is Pluvicto less profitable now again as you roll it into the community setting and then maybe also the urologists? And are there any other products that will have to take a little bit of time before they become meaningfully profitable?

Yes. Pluvicto actually, I mean, Steffen does a wonderful job on his team with the higher volumes, also the cost of goods come down. Now it is a bit lower in the margin structure given there's also royalties attached to it. But we also have less marketing and sales, more service model. So overall, Pluvicto does contribute to our margin, maybe not as much as small molecule, high priced or biologics. But overall, very profitable, very value-creating business already.

Please go ahead.

Thibault from Morgan Stanley. Just ask a question on your ambition for mid-single-digit sales growth beyond 2030. How do you think about the mix between organic and what you will acquire between now and then? Consensus has sales declining from 2031. So how much of the delta is a function of pipeline and new launches contribution and that we are missing? And how much is a function of potential additional BD between now and then?

Yes. So first, I'd say it's not easy to know the difference between all of you because while the view is there's going to be a decline, none of you really model it all that carefully for me to be able to bridge it. So it's a little bit harder because you guys just have this drop-off, but not actually giving us any of the pipeline.

So what I would say is what we see is we see our in-market, we take the in-market brands that are protection in the late 2030s, and we see the potential of that. Then we take our probabilized pipeline, we have a probabilized inflow model, and we have a probabilized BD&L model based on all our historic output and productivity. And based on that, we feel very comfortable that with that, without doing any additional deals per se, we can be in this 4% to 6% mid-single-digit growth range. Additional deals that we do would just derisk that profile.

But I can't actually give you like individual brand level. I mean when you look at the peak sales, I think we're largely in line with all of you. You guys all have our peak sales on the in-market brands. You've seen that we have a lot of ambition for Rhapsido. We have ambition for ianalumab. These are both relatively -- or at least more derisked than they were given that you have the positive readouts. We've discussed, there could be more upside on Kesimpta or Pluvicto depending on how the next year rolls out in terms of the trajectory on those brands.

And then on the remaining brands on that second page of peak sales I've given, that really depends on the readouts and the early trajectories before we can give you precise numbers. But we clearly think these are all going to be significant medicines with the multibillion-dollar potential. And those are, of course, all Phase III assets on that chart generally.

Matthew?

Two quick ones, please. One brand that isn't on your table is Entresto. But I would love to know how much Entresto you think you'll sell in 2030 given the longer Japan patent, your experience of cardiovascular drugs in emerging markets. Are we getting that one wrong?

And then the second question is around Kisqali life cycle management because it's a phenomenal brand for Novartis. In the opening comments this morning, you suggested you thought that if SERD had a role, it was likely going to be a role in combo with CDK4/6. As a company that is currently dominating CDK4/6, I would imagine a fixed-dose combination could be a very attractive way forward. So I'd just love to understand how you're thinking of an oral SERD strategy? How early you think you may need to act if that's a useful thing? Or am I just wrong in terms of whether the strategy would work?

So first on Entresto, I would say we expect it still to be a multibillion-dollar medicine at the end of the decade. And we don't want to get too precise, but I think between the potential of hypertension in Japan, hypertension in China and then just in general, when we look at the stickiness of our cardiovascular portfolio in emerging markets, Diovan, the whole Valsartan portfolio only fell over -- under $1 billion relatively recently. Held [indiscernible], Diovan, Lotrel portfolio held as $1.5 billion. It's still maybe even -- it's still over $1 billion.

So you can imagine then when you look at your Entresto forecast, it's important to consider we'll have protection in 2 large markets to some extent in China. And then we -- and certainly in Japan, and then you have this long tail for such an established brand. So multibillion, we would expect that period.

And then on Kisqali, we certainly acknowledge the biology and the importance of oral SERDs, and we'll have to see again how the data plays out. And I would also say because I think there may be some confusion over the course of today, there's no lack of effort at Novartis to try to find an oral SERD that would fit in our portfolio, that makes sense from a whole variety of reasons. So it's not from a lack of effort, but certainly not or from our own internal efforts. And we will continue those efforts. So yes, we would like to, of course, have an oral SERD that's highly attractive and that makes sense for the company.

Now that said, in the meantime, what can we do given the situation we currently have where our internal programs didn't pan out and some of our early partnerships long ago had safety liabilities that we were working on is generate data with Kisqali in partnership with the available oral SERDs. That's what we try and do. So that data is available. And then we become a partner given our very strong position of the leading CDK4/6 in metastatic and in early breast cancer, we're clearly logical choice in our view with an oral SERD or an alternative hormone therapy that a physician might use.

Steve?

Following up on the SERD question. There's some confusion about what your rights are to the Olema compound. Do you have rights of first refusal on that compound? Or do you not? And secondly, Harry, since we may not get another chance, what is your biggest concern for Novartis' future? And what is your biggest concern for the industry's future?

Yes. So Steve, I can't comment on any further details on the Olema collaboration that we have other than to say our goal is to generate data with Kisqali and the Olema asset as well as other assets in Kisqali. And Harry?

One thing I would add on this one is we do not have any economics on that asset as it currently stands. I think there was some confusion about that.

Yes, please go ahead.

I mean why wouldn't you just [indiscernible]?

I think...

We'll get back to you on this one.

So your biggest concern questions, clearly a set up. Just to comment. So overall, I don't have -- I mean, the way we have set up this company, right, over years as a team, pure-play pharmaceuticals with 2, I think, very attractive spends and a good capital allocation, I think, is very good. Replacement power with our internal pipeline, as well as with the bolt-on M&A is shaping up extremely strong. The only concern is that sell side continues to underestimate our growth profile. But that's okay because we will grow into it and then later on, people will realize it.

For the industry, I would just hope that European countries or these 8 countries in the basket right of the MFN realize that it's time to wake up to basically ensure that patients have access to excellent new medicines. And think about how high the generic prices are, and how low the generic penetration is, in order to have an innovation rewarding health care system also in the future. And those would be the two things.

Michael?

On the slides this morning, Slide 10, you show the boosted R&D productivity. And the median peak sales for projects that you show are up 25% or 22% by 50%, but the expected NPV is only up 25%. So just wondering where that big gap is coming from? I would have thought revenues would drive a bigger uptick in the NPV.

Maybe I'll start with the -- technical one as you think about the strategic one. No, some of this is, of course, the peak sales come very late, right? So you have a time value of money thing, which disconnects a bit the peak sales increase from the NPV increase. So that's one of the technical explanations, if you will.

Yes. I mean I think -- and also when you -- there is time value, these are all more mathematical topics. I think for me, the point we were trying to make rather than -- is that we've made a significant shift in the company from where we used to develop a number of assets that were even sub-$1 billion asset peak sales. So now our threshold is $2 billion, and that's what we want to take forward from an asset standpoint.

Indication, we want to get at least $500 million and for an asset that we already believe has that potential. And then we've shifted that thinking all the way back into research across the entire portfolio, and that's actually bearing fruit, where we're more selective and focused on much higher value assets. The other thing going on here is, of course, we do have more outcome studies. And I think outcome studies from a cost standpoint will also suppress the NPV.

The other one is additional indications. So the way the assets becomes bigger is that you actually test in one indication, test in multiple ones, and that drives a higher cost structure.

I think Simon and then who is this...

Just two quick ones. Is it possible over time that the impact of MFN on European pricing actually has a positive impact on margin and profitability? And secondly, just going back to Olema, I know you're not going to answer it, but if I sort of ask it a different way, are the Olema SEC filings that say they have granted your right of first negotiation a fair representation of the situation?

So first on the Olema, so I think at this point, we probably shouldn't comment any further until we look carefully at all the questions you guys are asking us. What I can say is we are generating data with the asset, and that's what we're focused on at the moment.

Now I think on the question of how European pricing will evolve and how that will impact. I think it's too soon to judge. I think in theory, one could arrive at a place where private market launches where you have higher margins, of course, because you're at the closer to the U.S. price will -- even at lower volumes lead to perhaps neutral profitability. I'm not sure you'll get more profits because I think the volumes, of course, will be quite low given how these markets are structured.

I am also hopeful that in some markets where when you look at the net price and you do a GDP adjustment per the calculation for the 5 countries -- companies that have already made agreements and to what we understand of those agreements, there you can actually bridge the gap. And that some of those countries will work to bridge those gaps. I mean, certainly, when you look at large markets like Germany and Japan and for certain categories, bridging those gaps might be doable, in which case those markets will become more attractive as well from an economic investment standpoint. So all of that is going to have to work through the system.

I think it's not going to be fast. And I also think it's important to note that it will be for new launches, and then new launches in what we understand at least certain categories. And that's when we'll see step-by-step government starting to assess how they're going to manage this. And then we'll have to see from a budgetary standpoint, what they're willing to do. But I think the goal of the U.S. administration absolutely is to ensure that these 8 countries contribute and then the knock-on effects in other countries to the innovation ecosystem of this industry and that appropriately value the innovations to support future discoveries and future breakthroughs.

Matthew?

It's actually a manufacturing question, and it's all to do with re-onshoring in the U.S. and the announcement earlier this week of the significant investment in North Carolina. I'm just really -- the industry has not had a significant footprint of manufacturing in the U.S. for many years. Everyone is now building, and it seems that most people are building in North Carolina. I'm just curious as to where the people are going to come from?

I know it's a number of years away, but is this an issue where as an innovative industry, you have to bring people from around the world to bring that expertise into the U.S. or you train them up? Or are we going to have an issue that everybody is chasing the same people in a number of years' time to get these facilities up and running?

Thank you very much for the question. So we already have today a significant manufacturing presence in North Carolina, our Durham facility, which we have up and running. And we have no issue attracting talent and also retaining talent. What we need to do and need to take into consideration now with the footprint we had to build that flagship manufacturing cluster there that we will, of course, deploy highly automated technology, the one we use in our other facilities. So we will not need a workforce of 10,000 people. Our overall estimation over the next few years is that we will have around 1,000 people there to basically be able to produce all key products end-to-end in the U.S. And as such, the profile might be a bit different. Some of it is training, but we are very confident based on the legacy experience we have that we will find the talent.

[indiscernible].

Just another question on MFN. The deals that have been announced so far have had different dynamics by channel. So what do you think the fallout is in future payer negotiations that we may not be thinking about in terms of the different dynamics for cash and commercial Medicaid, et cetera? Just how do you think this changes things?

Well, I think the biggest shift from that standpoint is opening up and perhaps the broadening of the direct-to-patient channel that clearly the administration, but I would say other companies, including Novartis, have opened up on our own. We have a direct-to-patient approach. Other companies have as well, where basically netting out the typical rebates paid to PBMs is now being offered direct to the patient. And TrumpRx as a separate platform is offering "MFN level pricing" also direct.

Now how that ultimately unfolds remains to be seen. I think for certain categories of products, that might be attractive if you're in a high deductible plan and you'd prefer to just pay out of pocket. I think one open question, of course, is how does that payment apply to your deductible? Can you apply it to your deductible in Medicare or outside of Medicare open question? Probably in higher-priced specialty areas, even at that net price, it's going to be unattractive, or hard for many patients to use it. So I think there'll be relatively low volumes.

So I'm not sure at this point until we have more data on how these direct-to-patient platforms are used outside of categories like obesity, where I think there are other companies that would be better to comment than us, how big a shift it's going to lead in the payer environment. That volume, and how that volume moves is what's going to change how I think PBMs might behave.

In the back?

[indiscernible] JPMorgan. The first question will be on Scemblix, which you raised the guide for today to $4 billion plus. But just in terms of thinking about the launch in the U.S. has been really strong. Ex U.S. looks like it's off to a really strong start as well. So thinking about potential upside to the guide in terms of what the gating factors are to get to Gleevec size or Gleevec plus, particularly with the ex U.S. rollout being as strong as it looks like it has been?

And then the second question is on ianalumab, where it sounds like you've had a consistent benefit in the subgroup of the U.S. population and also the OUS population. So just if you could remind us on the timing for OUS filing and approval and how you're thinking about the launch trajectory in the 2 markets?

So first on Scemblix, the key gating factor now for how much larger it can get beyond the $4 billion is how successful we are in, let's call it, either markets, or in physician offices where there's a high loyalty to first-generation TKIs, namely generic Gleevec. And I think you have segments like that in the U.S. You also have countries and segments. And countries might just be more focused on first and second-gen generic TKIs. So our ability to move based on the data that we have that shows superiority to Gleevec in the first-line setting and at least numerically better responses in the -- again, second-gen TKIs with a strong safety profile.

I think the other thing that could help us is, over time, following the cohort of patients in the pivotal studies showing outcomes. And I think when we get -- as we get closer to showing that not only do we show better response rates, but the deep molecular response, or major molecular response, do we actually show better outcomes. And that better outcomes could sway. I think, more payers outside of the U.S. to switch to Scemblix because then there's a cost-effectiveness analysis as well. Given the pricing difference of Scemblix with historical Gleevec, also the volumes needed to surpass Gleevec are going to be lower. So that also is important to take into account.

With ianalumab, we would plan to file next year, I think, as we've already stated. I think outside of the U.S., one, it's important to note, depending on how we progress on the agreements with the administration, this would be a brand that would be subject to any agreements that we make. So then I think in the 8 target markets of the administration, the launch here would have to be thoughtfully done, let's put it that way, in terms of being able to launch the medicine, outside of the private market.

But I think more strategically, the question is in countries where there is an unwillingness to move off of systemic steroids as their pricing base case, it's going to be very difficult, of course, to launch the medicine. So we would be much more focused, I think, in countries where there is more attractive pricing environment, or of course, the China market is substantial for Sjogren's. And while there is local competition, we still think given our overall presence in immunology, there's a significant opportunity for ianalumab in China.

Michael?

Vas, you made an interesting comment this morning about how IRA might spill into the commercial channels as well. I just wondered in terms of speed and how quickly you think that might happen as prices come down in the government channels?

And just to clarify, it was less the commercial, more of the Medicaid channel. So basically, in the legislation, when a drug goes into IRA negotiation and the price for the so-called MFP price is set in Medicare, that does impact Medicaid best price. So even for patients that are not elderly, you have this rollover effect. So for drugs with low Medicaid exposure, not going to make a big difference. But for drugs with high Medicaid exposure, you now basically have to provide this lower price in that segment. And that would be relatively quickly because it's not volume weighted. And so this is going to be a relatively quick impact.

And so, again, it will vary product by product. But I think what would happen is you'd have a reset down in the first year and then we would grow back up off the base -- after the reset base, primarily driven by the commercial market where we would have not these lower prices. That's kind of the dynamics one would expect in the IRA.

So is there a question on the webcast? No? No. Okay.

Steve?

Two questions. Would you be surprised if no competitor ever came close to Novartis' success in RLT? Would that surprise you? And secondly, should Kisqali be successfully developed as a fixed-dose combination, how would IRA pricing be impacted? It was said earlier that your new guidance for Kisqali assumes IRA pricing, but can that become -- maybe not an issue if you developed a fixed-dose combination?

So -- I guess I'm trying to get the way I framed the answer was -- the question was. I would be surprised if a company in the next, I would say, 5 to 8 years approaches Novartis' scale in RLT. Did I get the question right, Steve? Because of the investments we've made since 2019 in R&D and capabilities in the manufacturing supply chain, in the ability to deliver the medicines globally. I think we're now 99.8% on time and full regardless of where we ship. And the scale and the learnings we've made in that effort, I think, are substantial, and I think that would be difficult to replicate.

I wouldn't say it's never replicatable because I think certainly, we have very capable peers who could make the investments to do it. But it takes experience in the market. And we've accumulated a lot of experience in the market, also now reaching community physicians in the U.S., but also navigating the individual complexities of each market. Each market, whether it's Germany, France, China, Japan, has different nuances to how to roll out RLT, and that's all accumulated know-how we're building with each launch.

To my -- I'm looking to my team to the best of my knowledge, a fixed-dose combination would not avoid IRA. Am I looking at my U.S. team? Is that correct?

I think if It contains the same active ingredient is, you can check the language. I think it says it contains the same active moiety, you are included.

So -- but we'll get back to you, Steve. I think it's a fair question. But to the best of my knowledge, that wouldn't change the situation for Kisqali. And I think for that -- is that what your question or for the new combination, is that your question?

[indiscernible] seems to think it would because [indiscernible]...

Combination with the -- to make it a subcu -- yes. So let's say it's an open question. Maybe we'll leave it at that, and we need to understand it better.

I think the last question, Simon? I think we're out of time.

What better way than to end on a question about tax. So if I look over the last 10 years, the Novartis tax rate has been between about sort of 14.5% and just over 16%, which is very, very stable and pretty low. A lot has changed over that. A lot is changing going forward with Pillar 2. How should we think about the tax rate in the medium term? Do you expect it to stay broadly in that range? Or is there any significant headwind or tailwind that we should be aware of going forward?

I would expect it -- at the moment, we are a core tax rate, which anyway is an interesting concept, but we do a good job of that. Core tax rate, we try to align better with cash tax rate, while the IFRS reported tax rate is interesting, but not very helpful. So it has to be correct from an accounting standpoint, but the core tax rate is more meaningful also for cash flow forecast. It's at 16.2% at the moment, and it goes up a bit to a 17% range over time. It depends more on geographic, can be between 15.5% and 17% actually. It depends on geographic mix. So maybe short -- long story short, I expect to have continued attractive tax rate.

And Mukul, what do you think?

Yes. I think that's what we -- in the medium term, Simon, we are forecasting between, as Harry said, 15.5% to 17% would be our forecast going into 2030.

All right. Well, thank you, everybody, for the full day. We really appreciate everybody's interest to listen to all the sessions. I also want to thank this room for asking all the great questions for the webcast. I'll probably leave you with just a sentiment with all of the details that we've gone through. Novartis is highly optimistic about our outlook and our future, whether it's our in-market brands, launches, our pipeline. But probably the most important thing I hope you take away is we have great people, and those people are incredibly talented and dedicated to the long-term success of the company, and that's also what gives me great optimism about our future as well.

So thank you again for a great day, and we look forward to catching up with you on quarter 4 and the full year results.

All right. Hello, everyone and welcome to our 2025 Meet Novartis Management Investor Event. Thank you, as always, for your time, interest and engagement with us. This is a special event, which we've been doing for over 10 years because it allows investors and analysts to interact with our management teams in an open Q&A format. Today we'll start with a presentation and a Q&A by Vas, followed by breakout sessions with our core therapeutic areas and corporate. The breakout sessions will be in a different room. So I'll come back after Vas's presentation to give directions and help you get where you need to be.

One other quick housekeeping note. For the Q&A after Vas's presentation, we'll have mic runners in the room. Please wait for the mic before asking your question so that we can ensure our webcast audience hears you clearly.

Before we get started, I'll just read the safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Please refer to the company's Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors.

The discussion today is not the solicitation of a proxy nor an offer of any kind with respect to the securities of Avidity Biosciences or SpinCo. The parties intend to file relevant documents with the U.S. SEC, including a proxy statement for the transactions and a registration statement for the spin-off. We urge you to read these materials that contain important information when they become available.

And with that, I'll hand it over to Vas.

Thank you, Sloan. Let me also thank everybody for joining today. It's always a pleasure to have all of you come in and be able to interact with our management team. I think one of the things that's allowed Novartis to perform so well for so long is that we believe we have the best talent in the world. And that talent will be -- is here today and you'll have the opportunity to interact with our leaders in R&D and in the commercial space to understand more about why we have such conviction for the long-term growth of the company.

So let's start with a little bit of history. And I think we've been trying to update this chart each year. But as you know, as we focused as a pure-play medicines company with the exiting of and the successful spin-outs of Alcon, Sandoz, exiting the consumer health stake, the sale of the Roche stake as well. We've been able to drive very strong performance over the year, 7% sales growth, 15% core operating income growth, 1,100 basis points of margin improvement. And I think this demonstrates that our pivot to a focused strategy, focused on 4 key therapeutic areas, focused on key geographies is paying off.

Now when you look at the -- some of the financial implications of that focus, first, looking at free cash flow, you can see that in the first 9 months of the year, the cash generation machine of Novartis is really functioning in a powerful way. You can see that $15.9 billion already comparable to the 2024 full year number. And that allows us to invest in the business, allows us to invest for growth in the long run. The other element of the story is with the focusing of the company, we continue to see improvements on return on invested capital, which now is at 17%, which is above peer median. And that's been a focus area for us to really demonstrate that in the long run, we're generating return on the capital that we deploy.

Now looking at how does that translate as well into total shareholder returns. On the 5-year period, Novartis is in the top 5 in the sector. And in the 3-year period, #2 in the sector, again, demonstrating that at all of that focus, financial performance is also translating into returns for our shareholders. And this is something, of course, we want to continue to deliver now in the period to come.

Now from a strategy standpoint, there is no change. I think one of the things that we've seen since we did transforming for growth, exiting the businesses that I mentioned, having a consistent strategy that focuses on key therapeutic areas, on technology platforms that we'll describe and talk about a bit more and that you all know well, 4 key geographies and keeping that consistent with a ruthless focus on generating growth and returns, having strong foundations, including in data science, technology and artificial intelligence, which I'll talk more about, continuing to be a leader in ESG topics, which I'll also briefly mention later on and then continuing to drive productivity, which is why we've been able to see the strong margin performance that we've seen over the recent years. And our commitment is to continue to maintain this strategy with consistency and strong execution in the years to come.

From a capital allocation standpoint, no changes but just to go over again so that we're really grounded on how we think about capital allocation. First and foremost, we need to invest in the business and we need to make sure that our capital -- CapEx and R&D infrastructure and capabilities are well invested in. We focus on value-creating bolt-ons without a size. I know there's a lot of focus on how big are the acquisitions. We really think about, is it an acquisition that can generate strong financial returns for the company? Does it fit with our key therapeutic areas and technology areas? And is it something that we think can generate growth over this 10-year period.

So some of the examples, as you know well, the proposed acquisition of Avidity, we did Tourmaline, we did Anthos. We also did -- if you look at the overall frame of the recent years, 30 deals over the last year, which was by, I think, most measures, #1 in the industry, showing that we're deploying capital to bring in technology and new medicines. We have the commitment for a consistent growing dividend in Swiss francs. And the other thing we've demonstrated is we're prepared to do share buybacks on an ongoing basis to continue to return capital that we're not deploying in the other 3 areas to shareholders. So right now, we have the $10 billion buyback ongoing. We're prepared at the next appropriate time when this share buyback is completed to continue share buybacks if we have excess capital available.

Now I wanted to turn for a moment to the portfolio. And just to give you a little bit of an overview of what we're seeing right now and the shape of the portfolio. I think a couple of interesting things to note here. One, 14 in-market blockbusters, 8 in-market brands with $3 billion-plus peak sales potential and limited binary risk, 16% of our sales comes from our largest product. Now on top of that, 6 ongoing launches and part of what gives us confidence in the growth outlook that we outlined this morning, is 15-plus submission-enabling readouts and 30 high-value pipeline assets, which you'll have the opportunity to discuss with our teams over the course of today. Now we continue to focus on key platforms. We spend a lot of time talking about the 3 newer platforms. But I would say we continue invest in capabilities in chemistry, in biotherapeutics. I mean these are areas that have to be the foundation of any company. But of course, that technology is also moving as well as we get into novel formats in those molecules.

Now we estimate that in the 3 newer areas where Novartis is building a leadership position, $36 billion market in RNA therapeutics, $28 billion market in radioligand therapies and by some estimates, a vastly growing cell and gene market up to $49 billion. Now we've also had a big focus on R&D productivity with the shift to a pure-play medicines company. You'll remember in 2022, we did a significant pruning of the portfolio to focus down and ensure we're only really looking at high-value assets that are on strategy. And what that's led to is a 50% increase in our portfolio in terms of median peak sales value per project, as well as an increase of 25% in the eNPV on our -- on a per project basis. Also, we've been working on cycle time, something where we have not been, I think, where we would like to be in the top quartile of cycle time. So big area of focus for us in the company.

We've now accelerated first patient to first site initiation visit by over 40% in 2025 versus 2024. When you look at last patient last visit to CSR, getting [indiscernible] clinical study report, again accelerated by over 15%. And concrete examples of that included with Scemblix, where in first line, we were able to get to approval in 3 years from the start of the study. And with ianalumab, we were actually to get enrollment to be completed 9 months faster. And we see examples like this across our portfolio.

Now turning to the growth outlook of the company. As you saw in our announcement this morning. First, just as a reminder, as part of the Avidity acquisition, we upgraded our guidance for '24 to '29 to 6% sales CAGR -- sales growth. In the '25 to 2030 period, we guided this morning to 5% to 6%. The 5% to 6% to indicate that we're roughly in the midpoint of that range and we'll continue to see how this will evolve over the pipeline readouts that we have upcoming. And then our expectation to continue to deliver mid-single-digit sales growth into the 2030s and beyond. Now what underpins that is derisked in-market brands, which you all know well and we'll talk about a little bit more but as well as a growing number of pipeline assets that we think can underpin the longer-term growth of the company. I would also say that many of those key assets on the top part of this chart have LoE protection well into the 2030s -- into the late 2030s. And that gives us a strong base from which we can grow in that period.

So in a little bit more detail to make it super clear, 5% to 6% constant currency growth. Now on the core margin, we did speak about with the Avidity acquisition, we do expect 1 to 2 points of core margin decline in 2026 with the Avidity acquisition and then a climb back up to the 40% plus by 2029. We, of course, will have productivity programs in place to try to get that to happen sooner but we think this is a reasonable guidance to give us the opportunity to invest in those Avidity assets, invest in the pipeline to ensure the long-term growth outlook that we're aspiring towards.

Then look at the trajectory of this over the coming period. And I think there's been a lot of focus on the Gx that we have with Entresto, Promacta and Tasigna. And that will certainly have a significant impact on us in the first half of next year. But coming out of the midpoint of next year, we would expect to enter a period where we have limited generic headwinds. And then we have a lot of tailwinds that will enable us to drive the dynamic growth that we're forecasting. That's in-market growth drivers that we'll talk about in the next few slides. And then a probabilized pipeline that we see more and more readouts with ianalumab, with some of the other medicines that we have here that will have readouts in the next 2 years will give us the opportunity to hopefully outperform the guidance that we're giving you.

Now I would want to say -- I do want to highlight that we have become very effective now at consistently launching our medicines. And if you look at the history, certainly, I've been at the company for than 20 years. We historically have had a lot of variability in launch performance. But we've had a significant focus now on trying to ensure that we execute each launch successfully, knowing how important that is to actually unlock the value for the company but also have the impact that we want on patients and the health care system. So when you look at this chart, you see out to month 8 from launch, the performance of 4 recent launches in the U.S. market. You can see with Cosentyx, HS, we were able to achieve 67% NBRx share, in Kisqali, early breast cancer, with a very strong competitor in the market, 63% NBRx share, PSMAfore, we're at 16% at 4x share in 4 months and with Scemblix as well, 56% in the second line and 23% in the first line.

So very strong launch performance. And that's something we're really going to focus on -- continue to focus on in the years to come. I would all say outside of the U.S., where we have a history of being one of the market leaders in most key markets, that same commitment to launch excellence is also being implemented. You can see with China, we're now the #2 in the market, Germany #1 and a very nicely growing business in Japan, where we see significant opportunity in the years to come, up to #4 with the aspiration to get into the top 3.

Now turning to the peak sales guidance that we outlined as well this morning. We have 8 -- as I mentioned, 8 in-market assets with $3 billion to $10 billion of peak sales potential. Based on the strong performance we're seeing in the early breast cancer setting in the U.S. but importantly, also outside of the U.S. in the early readings that we're getting, we're upgrading Kisqali to $10 billion-plus peak sales potential, which would make it really Novartis' largest brand in our history. We maintain our outlook on Cosentyx at $8 billion, underpinned as well by the recent positive readout we had in Polymyalgia Rheumatica.