Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated October 29, 2024

(Commission File No. 1-15024)

Novartis AG

(Name of Registrant)

Lichtstrasse 35

4056 Basel

Switzerland

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F: x

Form 40-F: o

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes: o

No: x

Exhibits:

99.1 Financial Report Q3 2024
99.2 Interim Financial Report

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Novartis AG


Date: October 29, 2024	By:	/s/ PAUL PENEPENT

	Name:		Paul Penepent
	Title:		Head Financial Reporting and Accounting


Ad hoc announcement pursuant to Art. 53 LR		Novartis International AG Novartis Global Communications CH-4002 Basel Switzerland https://www.novartis.com https://twitter.com/novartisnews

FINANCIAL RESULTS | FINANZERGEBNISSE

Novartis continues strong momentum in Q3 with 10% sales growth, 20% core operating income growth, and important innovation milestones; raises FY 2024 guidance

•	Q3 net sales grew +10% (cc¹, +9% USD) with core operating income up +20% (cc, +17% USD)

o	Sales growth driven by continued strong performance from Entresto (+26% cc), Cosentyx (+28% cc), Kisqali (+43% cc), Kesimpta (+28% cc), Pluvicto (+50% cc) and Leqvio (+119% cc)

o	Core operating income margin 40.1%, +340 basis points (cc), mainly driven by higher net sales

•	Q3 operating income grew +123% (cc, +106% USD); net income up +121% (cc, +111% USD)

•	Q3 core EPS grew +20% (cc, +18% USD) to USD 2.06

•	Q3 free cash flow¹ of USD 6.0 billion (+18% USD) driven by higher net cash flows from operating activities

•	Strong nine months performance with sales up +11% (cc, +9% USD) and core operating income up +20% (cc, +17% USD)

•	Q3 selected innovation milestones:

o	Kisqali FDA approval and positive CHMP opinion for HR+/HER2- stage II and III eBC

o	Fabhalta FDA accelerated approval for IgAN

o	Pluvicto FDA filing for pre-taxane mCRPC

•	Full-year 2024 guidance raised²

o	Net sales expected to grow low double-digit (from high single to low double-digit)

o	Core operating income expected to grow high teens (from mid to high teens)

Basel, October 29, 2024 – commenting on Q3 2024 results, Vas Narasimhan, CEO of Novartis, said:

“Novartis delivered another quarter of strong operational performance in Q3, with sales up 10% and core operating income up 20%. All key growth drivers contributed to the momentum. We achieved important indications expansions for Kisqali in early breast cancer and Fabhalta in IgA nephropathy, and we completed our PSMAfore filing for Pluvicto in the US. With the momentum in our business and pipeline, we were able to once again upgrade our full-year guidance and remain highly confident in our mid-term outlook.”

Key figures	Continuing operations³
	Q3 2024	Q3 2023	% change		9M 2024	9M 2023	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc
Net sales	12 823	11 782	9	10	37 164	34 017	9	11
Operating income	3 627	1 762	106	123	11 014	7 187	53	61
Net income	3 185	1 513	111	121	9 119	5 934	54	62
EPS (USD)	1.58	0.73	116	127	4.50	2.84	58	67
Free cash flow	5 965	5 043	18		12 618	11 019	15
Core operating income	5 145	4 405	17	20	14 635	12 551	17	20
Core net income	4 133	3 585	15	17	11 822	10 320	15	18
Core EPS (USD)	2.06	1.74	18	20	5.83	4.95	18	21

1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 46 of the Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 7. 3. As defined on page 35 of the Interim Financial Report, Continuing operations include the retained business activities of Novartis, comprising the innovative medicines business and the continuing corporate activities and Discontinued operations include operational results from the Sandoz business.

Strategy

Our focus

In 2023, Novartis completed its transformation into a “pure-play” innovative medicines business. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan.

Our priorities

1.	Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.

2.	Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility.

3.	Strengthening foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.

Financials

Following the September 15, 2023, shareholder approval of the spin-off of Sandoz, Novartis reported its consolidated financial statements as “continuing operations” and “discontinued operations.”

Continuing operations include the retained business activities of Novartis, comprising the innovative medicines business and the continuing corporate activities. Discontinued operations include the Sandoz Division and selected portions of corporate activities attributable to Sandoz’s business, as well as certain expenses related to the spin-off.

While the commentary below focuses on continuing operations, we also provide information on discontinued operations.

Continuing operations

Third quarter

Net sales were USD 12.8 billion (+9%, +10% cc), with volume contributing 12 percentage points to growth. Generic competition had a negative impact of 2 percentage points and pricing was flat.

Operating income was USD 3.6 billion (+106%, +123% cc), mainly driven by lower impairments and higher net sales, partly offset by higher R&D investments.

Net income was USD 3.2 billion (+111%, +121% cc), mainly driven by higher operating income. EPS was USD 1.58 (+116%, +127% cc), benefiting from the lower weighted average number of shares outstanding.

Core net income was USD 4.1 billion (+15%, +17% cc), mainly due to higher core operating income. Core EPS was USD 2.06 (+18%, +20% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow from continuing operations amounted to USD 6.0 billion (+18% USD), compared with USD 5.0 billion in the prior-year quarter, driven by higher net cash flows from operating activities from continuing operations.

Nine months

Net income was USD 9.1 billion (+54%, +62% cc), mainly driven by higher operating income. EPS was USD 4.50 (+58%, +67% cc), benefiting from the lower weighted average number of shares outstanding.

Core net income was USD 11.8 billion (+15%, +18% cc), mainly due to higher core operating income. Core EPS was USD 5.83 (+18%, +21% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow from continuing operations amounted to USD 12.6 billion (+15% USD), compared with USD 11.0 billion in the prior-year period, driven by higher net cash flows from operating activities from continuing operations.

Discontinued operations

Discontinued operations include the Sandoz generic pharmaceuticals and biosimilars division, certain corporate activities attributable to Sandoz and certain other expenses related to the spin-off of the Sandoz business.

Third quarter

As the Sandoz spin-off was completed on October 3, 2023, there were no operating results in the third quarter of 2024 related to discontinued operations. In the third quarter of 2023, discontinued operations net sales were USD 2.5 billion, operating loss amounted to USD 86 million and net income from discontinued operations was USD 250 million. For further details see Note 3 “Significant acquisition of businesses and spin-off of Sandoz business” and Note 11 “Discontinued operations” to the condensed interim consolidated financial statements.

Nine months

As the Sandoz spin-off was completed on October 3, 2023, there were no operating results in the first nine months of 2024 related to discontinued operations. In the first nine months of 2023, discontinued operations net sales were USD 7.4 billion, operating income amounted to USD 265 million and net income from discontinued operations was USD 440 million. For further details see Note 3 “Significant acquisition of businesses and spin-off of Sandoz business” and Note 11 “Discontinued operations” to the condensed interim consolidated financial statements.

Total Company

Third quarter

Total Company net income was USD 3.2 billion in 2024, compared to USD 1.8 billion in 2023 and basic EPS was USD 1.58 compared to USD 0.85 in prior year quarter. Net cash flows from operating activities for total Company amounted to USD 6.3 billion and free cash flow amounted to USD 6.0 billion.

Nine months

Total Company net income was USD 9.1 billion in 2024, compared to USD 6.4 billion in 2023 and basic EPS was USD 4.50 compared to USD 3.05 in prior year. Net cash flows from operating activities for total Company amounted to USD 13.4 billion and free cash flow amounted to USD 12.6 billion.

Q3 key growth drivers

Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q3 growth) including:

Entresto	(USD 1 865 million, +26% cc) sustained robust, demand-led growth, with increased penetration in the US and Europe following guideline-directed medical therapy in heart failure, as well as in China with increased penetration in hypertension
Cosentyx	(USD 1 693 million, +28% cc) sales grew mainly in the US, Europe and emerging growth markets, driven by recent launches (including the HS indication and the IV formulation in the US) and volume growth in core indications
Kisqali	(USD 787 million, +43% cc) sales grew strongly across all regions, based on increasing recognition of its overall survival benefit in HR+/HER2- advanced breast cancer and Category 1 NCCN guidelines recommendation
Kesimpta	(USD 838 million, +28% cc) sales grew reflecting increased demand for a high efficacy product with convenient self-administered dosing; the prior-year period benefited from a one-time revenue deduction adjustment in Europe
Pluvicto	(USD 386 million, +50% cc) sales grew in the US and Europe. Q3 sales benefited from a one-time revenue deduction adjustment in Europe. With supply now unconstrained, the focus is on increasing share in established RLT sites, while opening new sites and referral pathways, and initiating new patients
Leqvio	(USD 198 million, +119% cc) continued to show steady growth, with a focus on increasing account and patient adoption, and continuing medical education
Jakavi	(USD 500 million, +18% cc) sales grew across all regions driven by strong demand across indications
Scemblix	(USD 182 million, +72% cc) sales grew across all regions demonstrating the continued high unmet need in CML
Tafinlar + Mekinist	(USD 534 million, +12% cc) sales grew mainly in the US and emerging growth markets, driven by increased demand
Xolair	(USD 418 million, +15% cc) grew mainly in emerging growth markets and Europe
Fabhalta	(USD 44 million) launch continues in PNH with an approval in IgAN in Q3
Ilaris	(USD 372 million, +12% cc) sales grew across all regions, led by the US and Europe
Lutathera	(USD 190 million, +19% cc) sales grew across all regions due to increased demand and earlier line adoption (within indication) in the US and Japan
Emerging Growth Markets*	Grew +12% (cc) overall. China grew +18% (cc) to USD 1.0 billion, mainly driven by Entresto, Cosentyx and Leqvio

*All markets except the US, Canada, Western Europe, Japan, Australia, and New Zealand

Net sales of the top 20 brands in the third quarter and nine months

	Q3 2024	% change		9M 2024	% change
	USD m	USD	cc	USD m	USD	cc
Entresto	1 865	26	26	5 642	28	30
Cosentyx	1 693	27	28	4 545	24	25
Kesimpta - excl. PY revenue deduction adjust.	838	28 55	28 56	2 274	49 61	49 62
Kisqali	787	40	43	2 131	45	48
Promacta/Revolade	569	-1	0	1 633	-4	-3
Tafinlar + Mekinist	534	11	12	1 531	7	9
Jakavi	500	17	18	1 449	14	16
Tasigna	419	-10	-9	1 260	-10	-9
Xolair	418	13	15	1 244	15	17
Ilaris	372	11	12	1 096	12	16
Pluvicto - excl. revenue deduction adjust.	386	51 37	50 36	1 041	47 42	47 42
Sandostatin Group	305	-10	-8	973	-3	-1
Zolgensma	308	0	1	952	3	4
Lucentis	245	-33	-32	834	-29	-28
Exforge Group	174	-7	-4	544	-2	1
Lutathera	190	19	19	534	17	17
Leqvio	198	120	119	531	129	130
Scemblix	182	72	72	482	67	69
Galvus Group	159	-12	-6	458	-15	-8
Diovan Group	150	-2	2	450	-3	1
Top 20 brands total	10 292	17	18	29 604	17	19

R&D update - key developments from the third quarter

New approvals

Kisqali (ribociclib)	FDA approved Kisqali with a broad indication for HR+/HER2- stage II and III early breast cancer (eBC) at high risk of recurrence, approximately doubling the population eligible for CDK4/6 inhibitor adjuvant therapy, with the inclusion of those without nodal involvement. In addition, the CHMP issued a positive opinion for Kisqali in eBC in October.
Fabhalta (iptacopan)	FDA granted accelerated approval to Fabhalta for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk of rapid disease progression.

Regulatory updates

Pluvicto

(lutetium Lu177 vipivotide tetraxetan)

Completed FDA submission for Pluvicto pre-taxane mCRPC label expansion based on the positive Phase III PSMAfore study.

Scemblix (asciminib)	FDA granted Priority Review status to Scemblix for the treatment of newly diagnosed adult patients with Philadelphia chromosome-positive CML in chronic phase (Ph+ CML-CP). Scemblix is also under regulatory review in this indication in key international markets worldwide, including in China and Japan.
Fabhalta (iptacopan)	Submissions for the treatment of C3 glomerulopathy (C3G) completed in the EU, China and Japan.

Results from ongoing trials and other highlights

Kisqali (ribociclib)	Results from a four-year post-hoc analysis of the pivotal Phase III NATALEE trial showed the addition of Kisqali to endocrine therapy (ET) in patients with stage II and III HR+/HER2- eBC reduced the risk of recurrence by 28.5% compared to ET alone. This invasive disease-free survival benefit was consistent across all pre-specified patient subgroups, including those with node-negative disease. Results were also consistent across secondary efficacy endpoints, with a trend for improvement in overall survival. Safety and tolerability remained consistent with previously reported results. Data presented at ESMO Congress 2024.
Leqvio (inclisiran)	In the Phase III V-MONO study, Leqvio demonstrated clinically meaningful and statistically significant low-density lipoprotein cholesterol (LDL-C) lowering versus both placebo and ezetimibe in patients who were at low or moderate risk of developing atherosclerotic cardiovascular disease (ASCVD) and not receiving lipid-lowering therapy. Novartis plans to present results from this trial at an upcoming medical meeting and share with regulatory agencies including FDA.
Kesimpta (ofatumumab)	Data from the ALITHIOS open-label extension study showed first-line Kesimpta treatment for up to six years led to less disability and disease progression in recently diagnosed (≤3 years) and treatment-naïve people with relapsing multiple sclerosis (RMS), compared to those who switched from teriflunomide. In the separate US-based single-arm OLIKOS Phase IIIb study, all clinically stable RMS patients who switched from intravenous anti-CD20 therapy to Kesimpta showed no new gadolinium-enhancing (Gd+) T1 lesions at 12 months. Data from both studies were presented at the ECTRIMS 2024 Annual Meeting.
Pelabresib	Based on Novartis review of 48-week data from the Phase III MANIFEST-2 study, longer follow-up time is needed to determine, in consultation with Health Authorities, the regulatory path for pelabresib in myelofibrosis. We will continue to follow patients in MANIFEST-2 and evaluate the potential for additional studies to support registration. The 48-week data will be presented at an upcoming medical meeting.
XXB750	Novartis will not advance further development of XXB750 in resistant hypertension and heart failure, following current scientific assessment and review of available data from early investigational studies.
BD&L	Novartis, in collaboration with Versant Ventures, established Borealis Biosciences, an independent, discovery-stage biotechnology company focused on developing next-generation RNA-based medicines for kidney diseases. Under the agreement, Novartis has the option to acquire two future development-ready programs to augment its renal portfolio, a strategic area of focus for the company. Novartis entered into a collaboration agreement with Generate:Biomedicines to discover and develop protein therapeutics across multiple disease areas with generative AI. The collaboration will combine Generate’s AI platform with Novartis expertise and capabilities in target biology, biologics development, and clinical development to create novel therapeutics and to accelerate the pace of drug discovery and development.

Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority.

During the first nine months of 2024, Novartis repurchased a total of 52.7 million shares for USD 5.7 billion on the SIX Swiss Exchange second trading line. These purchases included 45.4 million shares (USD 4.8 billion) under the up-to USD 15 billion share buyback announced in July 2023 (with up to USD 7.9 billion still to be executed). In addition, 7.3 million shares (USD 0.9 billion) were repurchased to mitigate dilution related to participation plans of associates, with the remainder of repurchases for this purpose to be executed in Q4 2024. Further, 1.1 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 9.1 million shares (for an equity value of USD 0.8 billion) were delivered as a result of share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 44.7 million versus December 31, 2023. These treasury share transactions resulted in an equity decrease of USD 5.0 billion and a net cash outflow of USD 5.5 billion.

As of September 30, 2024, net debt increased to USD 16.3 billion compared to USD 10.2 billion net debt at December 31, 2023. The increase was mainly due to the free cash flow of USD 12.6 billion being more than offset by the USD 7.6 billion annual dividend payment, net cash outflow for M&A / intangible assets transactions of USD 5.5 billion, and cash outflow for treasury share transactions of USD 5.5 billion.

As of Q3 2024, the long-term credit rating for the company is Aa3 with Moody’s Ratings and AA- with S&P Global Ratings.

2024 outlook

Barring unforeseen events; growth vs prior year in cc		Previous guidance
Net sales	Expected to grow low double-digit	(from high single to low double-digit)
Core operating income	Expected to grow high teens	(from mid to high teens)

Key assumptions:

•	We assume Tasigna, Promacta and Entresto US generic entry mid-2025 for forecasting purposes

Foreign exchange impact

If late-October exchange rates prevail for the remainder of 2024, the foreign exchange impact for the year would be negative 1 percentage point on net sales and negative 3 to negative 4 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures¹

Continuing operations²	Q3 2024	Q3 2023	% change		9M 2024	9M 2023	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc
Net sales	12 823	11 782	9	10	37 164	34 017	9	11
Operating income	3 627	1 762	106	123	11 014	7 187	53	61
As a % of sales	28.3	15.0			29.6	21.1
Net income	3 185	1 513	111	121	9 119	5 934	54	62
EPS (USD)	1.58	0.73	116	127	4.50	2.84	58	67
Cash flows from operating activities	6 286	5 304	19		13 426	11 673	15
Non-IFRS measures
Free cash flow	5 965	5 043	18		12 618	11 019	15
Core operating income	5 145	4 405	17	20	14 635	12 551	17	20
As a % of sales	40.1	37.4			39.4	36.9
Core net income	4 133	3 585	15	17	11 822	10 320	15	18
Core EPS (USD)	2.06	1.74	18	20	5.83	4.95	18	21


Discontinued operations²	Q3 2024	Q3 2023	% change		9M 2024	9M 2023	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc
Net sales		2 476	nm	nm		7 428	nm	nm
Operating (loss)/income		-86	nm	nm		265	nm	nm
As a % of sales		-3.5				3.6
Net income		250	nm	nm		440	nm	nm
Non-IFRS measures
Core operating income		250	nm	nm		1 185	nm	nm
As a % of sales		10.1				16.0


Total Company	Q3 2024	Q3 2023	% change		9M 2024	9M 2023	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc
Net income	3 185	1 763	nm	nm	9 119	6 374	nm	nm
EPS (USD)	1.58	0.85	nm	nm	4.50	3.05	nm	nm
Cash flows from operating activities	6 286	5 378	nm	nm	13 426	11 911	nm	nm
Non-IFRS measures
Free cash flow	5 965	5 043	nm	nm	12 618	11 038	nm	nm
Core net income	4 133	3 784	nm	nm	11 822	11 209	nm	nm
Core EPS (USD)	2.06	1.83	nm	nm	5.83	5.37	nm	nm

nm=not meaningful

2. As defined on page 35 of the Interim Financial Report, Continuing operations include the retained business activities of Novartis, comprising the innovative medicines business and the continuing corporate activities and Discontinued operations include operational results from the Sandoz business.

Detailed financial results accompanying this press release are included in the Interim Financial Report at the link below:

https://ml-eu.globenewswire.com/resource/download/6504f5e3-a14c-43ba-8b72-44dcc5a45156/

Disclaimer

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as “may,” “can,” “will,” “continue,” “ongoing,” “grow,” “launch,” “expect,” “deliver,” “focus,” “address,” “accelerate,” “deliver,” “remain,” “scaling,” “guidance,” “outlook,” “long-term,” “priority,” “potential,” “momentum,” or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, potential product launches, or regarding potential future revenues from any such products; or regarding results of ongoing clinical trials; or regarding potential future, pending or announced transactions; regarding potential future sales or earnings; or by discussions of strategy, plans, expectations or intentions, including discussions regarding our continued investment into new R&D capabilities and manufacturing; or regarding our capital structure; or regarding the consequences of the spin-off of Sandoz and our transformation into a “pure-play” innovative medicines company. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. You should not place undue reliance on these statements. There can be no guarantee that the investigational or approved products described in this press release will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Nor can there be any guarantee that such products will be commercially successful in the future. Neither can there be any guarantee expected benefits or synergies from the transactions described in this press release will be achieved in the expected timeframe, or at all. In particular, our expectations could be affected by, among other things: uncertainties regarding the success of key products, commercial priorities and strategy; uncertainties in the research and development of new products, including clinical trial results and additional analysis of existing clinical data; uncertainties regarding the use of new and disruptive technologies, including artificial intelligence; global trends toward healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; uncertainties regarding our ability to realize the strategic benefits, operational efficiencies or opportunities expected from our external business opportunities; our ability to realize the intended benefits of our separation of Sandoz into a new publicly traded standalone company; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products; uncertainties in the development or adoption of potentially transformational digital technologies and business models; uncertainties surrounding the implementation of our new IT projects and systems; uncertainties regarding potential significant breaches of information security or disruptions of our information technology systems; uncertainties regarding actual or potential legal proceedings, including regulatory actions or delays or government regulation related to the products and pipeline products described in this press release; safety, quality, data integrity, or manufacturing issues; our performance on and ability to comply with environmental, social and governance measures and requirements; major political, macroeconomic and business developments, including impact of the war in certain parts of the world; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; and other risks and factors referred to in Novartis AG’s most recently filed Form 20-F and in subsequent reports filed with, or furnished to, the US Securities and Exchange Commission. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

All product names appearing in italics are trademarks owned by or licensed to Novartis.

About Novartis

Novartis is an innovative medicines company. Every day, we work to reimagine medicine to improve and extend people’s lives so that patients, healthcare professionals and societies are empowered in the face of serious disease. Our medicines reach more than 250 million people worldwide.

Reimagine medicine with us: Visit us at https://www.novartis.com and connect with us on LinkedIn, Facebook, X/Twitter and Instagram.

Novartis will conduct a conference call with investors to discuss this news release today at 14:00 Central European time and 9:00 Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Novartis website. A replay will be available after the live webcast by visiting https://www.novartis.com/investors/event-calendar.

Detailed financial results accompanying this press release are included in the condensed interim financial report at the link below. Additional information is provided on our business and pipeline of selected compounds in late-stage development. A copy of today's earnings call presentation can be found at https://www.novartis.com/investors/event-calendar.

Important dates

November 20-21, 2024	Meet Novartis Management 2024 (London, UK)
December 9, 2024	Impact & Sustainability annual investor event (virtual)
January 31, 2025	Fourth quarter & full year 2024 results

Novartis Third Quarter and Nine Months 2024 Condensed Interim Financial Report – Supplementary Data

INDEX

Page

COMPANY OPERATING PERFORMANCE REVIEW

Continuing operations

Discontinued operations

Total Company

COMPANY CASH FLOW AND BALANCE SHEET

INNOVATION REVIEW

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statements

Consolidated statements of comprehensive income

Consolidated balance sheets

Consolidated statements of changes in equity

Consolidated statements of cash flows

Notes to condensed interim consolidated financial statements

SUPPLEMENTARY INFORMATION

CORE RESULTS - Reconciliation from IFRS^® Accounting Standards results to non-IFRS measure core results

Total Company

Discontinued operations

FREE CASH FLOW

ADDITIONAL INFORMATION

Net debt

Share information

Effects of currency fluctuations

DISCLAIMER

Company

Key figures

Third quarter and nine months

(USD millions unless indicated otherwise)	Q3 2024 USD m	Q3 2023 USD m	% change USD	% change cc¹	9M 2024 USD m	9M 2023 USD m	% change USD	% change cc¹

Net sales from continuing operations	12 823	11 782	9	10	37 164	34 017	9	11

Other revenues	349	310	13	13	1 000	867	15	15

Cost of goods sold	-3 234	-3 117	-4	-3	-9 503	-9 450	-1	0

Gross profit from continuing operations	9 938	8 975	11	12	28 661	25 434	13	15

Selling, general and administration	-3 134	-3 091	-1	-2	-9 065	-9 073	0	-1

Research and development	-2 392	-3 925	39	40	-7 180	-8 804	18	19

Other income	355	224	58	57	877	1 322	-34	-35

Other expense	-1 140	-421	-171	-167	-2 279	-1 692	-35	-33

Operating income from continuing operations	3 627	1 762	106	123	11 014	7 187	53	61

% of net sales	28.3	15.0			29.6	21.1

Loss from associated companies	-4	-3	-33	-14	-35	-7	nm	nm

Interest expense	-264	-222	-19	-25	-731	-638	-15	-18

Other financial income and expense	26	15	73	-34	107	204	-48	-8

Income before taxes from continuing operations	3 385	1 552	118	129	10 355	6 746	53	62

Income taxes	-200	-39	nm	nm	-1 236	-812	-52	-60

Net income from continuing operations	3 185	1 513	111	121	9 119	5 934	54	62

Net income from discontinued operations		250	nm	nm		440	nm	nm

Net income	3 185	1 763	nm	nm	9 119	6 374	nm	nm

Basic earnings per share from continuing operations (USD)	1.58	0.73	116	127	4.50	2.84	58	67

Basic earnings per share from discontinued operations (USD)		0.12	nm	nm		0.21	nm	nm

Total basic earnings per share (USD)	1.58	0.85	nm	nm	4.50	3.05	nm	nm

Net cash flows from operating activities from continuing operations	6 286	5 304	19		13 426	11 673	15


Non-IFRS measures¹

Free cash flow from continuing operations	5 965	5 043	18		12 618	11 019	15

Core operating income from continuing operations	5 145	4 405	17	20	14 635	12 551	17	20

% of net sales	40.1	37.4			39.4	36.9

Core net income from continuing operations	4 133	3 585	15	17	11 822	10 320	15	18

Core basic earnings per share from continuing operations (USD)	2.06	1.74	18	20	5.83	4.95	18	21


¹ Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 46. Unless otherwise noted, all growth rates in this release refer to same period in prior-year.
nm = not meaningful

Strategy

Our focus

Our priorities

1. Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.

2. Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility.

3. Strengthening foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.

Financials

While the commentary below focuses on continuing operations, we also provide information on discontinued operations.

Continuing operations

Third quarter

Net sales

Net sales were USD 12.8 billion (+9%, +10% cc), with volume contributing 12 percentage points to growth. Generic competition had a negative impact of 2 percentage points and pricing was flat. Sales in the US were USD 5.4 billion (+16%) and in the rest of the world USD 7.4 billion (+4%, +6% cc).

Sales growth was mainly driven by continued strong performance from Entresto (USD 1.9 billion, +26%, +26% cc), Cosentyx (USD 1.7 billion, +27%, +28% cc), Kisqali (USD 787 million, +40%, +43% cc), Kesimpta (USD 838 million, +28%, +28% cc), Pluvicto (USD 386 million, +51%, +50% cc) and Leqvio (USD 198 million, +120%, +119% cc), partly offset by erosion due to generic competition, mainly for Gilenya and Lucentis.

In the US (USD 5.4 billion, +16%), sales growth was mainly driven by Cosentyx, Entresto, Kesimpta and Kisqali, partly offset by the impact of generic competition on Gilenya, and the Xiidra divestment. In Europe (USD 4.0 billion, +1%, +1% cc), sales growth was mainly driven by Entresto, Pluvicto, Cosentyx, Jakavi and Kisqali, partly offset by increased generic competition for Lucentis and Gilenya. Sales in emerging growth markets were USD 3.3 billion (+8%, +12% cc), including USD 1.0 billion sales from China (+19%, +18% cc).

Operating income

Operating income was USD 3.6 billion (+106%, +123% cc), mainly driven by higher net sales and lower impairments, partly offset by higher R&D investments. Operating income margin was 28.3% of net sales,

increasing 13.3 percentage points (+14.6 percentage points cc). Other revenue as a percentage of sales was in-line with the prior year. Cost of goods sold as a percentage of sales decreased by 1.5 percentage points (cc). R&D expenses as a percentage of net sales decreased by 15.3 percentage points (cc). SG&A expenses as a percentage of net sales decreased by 2.1 percentage points (cc). Other income and expense as a percentage of net sales decreased the margin by 4.3 percentage points (cc).

Core adjustments were USD 1.5 billion, mainly due to amortization and impairments, compared to USD 2.6 billion in the prior year. Core adjustments decreased compared to the prior year, mainly due to lower impairments.

Core operating income was USD 5.1 billion (+17%, +20% cc), mainly driven by higher net sales, partly offset by higher R&D investments. Core operating income margin was 40.1% of net sales, increasing 2.7 percentage points (+3.4 percentage points cc). Other revenue as a percentage of sales was in-line with the prior year. Core cost of goods sold as a percentage of sales decreased by 0.3 percentage points (cc). Core R&D expenses as a percentage of net sales decreased by 0.7 percentage points (cc). Core SG&A expenses as a percentage of net sales decreased by 2.1 percentage points (cc). Core other income and expense as a percentage of net sales increased the margin by 0.3 percentage points (cc).

Interest expense and other financial income/expense

Interest expense amounted to USD 264 million and other ﬁnancial income and expense amounted to an income of USD 26 million, both broadly in line with prior-year quarter.

Core other ﬁnancial income and expense amounted to an income of USD 56 million, broadly in line with prior-year quarter.

Income taxes

The tax rate in the third quarter was 5.9% compared to 2.5% in the prior year. The current year tax rate was favorably impacted by the effect of changes in uncertain tax positions, the recognition of deferred tax assets on prior years' tax credit carryforwards and the effect of adjusting the current year tax rate to the estimated full year tax rate, which was lower than previously estimated, partially offset by a non-deductible impairment of goodwill. The prior year third quarter tax rate was impacted by tax benefits from the write-down of investments in subsidiaries, net decreases in uncertain tax positions and the effect of adjusting to the estimated full year tax rate, which was lower than previously estimated. Excluding these impacts, the tax rate in the third quarter would have been 15.1% compared to 14.9% in the prior year. The increase from the prior year was mainly the result of the impact of the enactment of Pillar Two tax legislation in Switzerland, which became effective on January 1, 2024, partially offset by of a change in profit mix.

The core tax rate (core taxes as a percentage of core income before tax) was 16.2% compared to 15.2% in the prior year. The prior year third quarter core tax rate was impacted by the effect of adjusting to the estimated full year core tax rate, which was lower than previously estimated. Excluding this impact the prior year quarter core tax rate would have been 15.4%. The increase from the prior year was mainly the result of the impact of the enactment of Pillar Two tax legislation in Switzerland, which became effective on January 1, 2024, partially offset by a change in profit mix.

Net income, EPS and free cash flow

Nine months

Net sales

Net sales were USD 37.2 billion (+9%, +11% cc) with volume contributing 14 percentage points to growth. Generic competition had a negative impact of 2 percentage points and pricing had a negative impact of 1 percentage point. Sales in the US were USD 15.1 billion (+15%) and in the rest of the world USD 22.0 billion (+6%, +8% cc).

Sales growth was mainly driven by continued strong performance from Entresto (USD 5.6 billion, +28%, +30% cc), Cosentyx (USD 4.5 billion, +24%, +25% cc), Kesimpta (USD 2.3 billion, +49%, +49% cc), Kisqali (USD 2.1 billion, +45%, +48% cc), Pluvicto (USD 1.0 billion, +47%, +47% cc) and Leqvio (USD 531 million, +129%, +130% cc), partly offset by erosion due to generic competition, mainly for Lucentis and Gilenya, and the Xiidra divestment.

In the US (USD 15.1 billion, +15%), sales growth was mainly driven by Cosentyx, Entresto, Kesimpta, Kisqali, Pluvicto and Leqvio, partly offset by the Xiidra divestment and the impact of generic competition on Gilenya. In Europe (USD 11.6 billion, +3%, +4% cc), sales growth was mainly driven by Entresto, Kesimpta, Pluvicto, Cosentyx and Kisqali, partly offset by erosion due to generic competition, mainly for Lucentis and Gilenya. Sales in emerging growth markets were USD 10.0 billion (+12%, +16% cc), including USD 3.1 billion sales from China (+22%, +25% cc).

Operating income

Operating income was USD 11.0 billion (+53%, +61% cc), mainly driven by higher net sales, lower impairments and restructuring charges, partly offset by prior-year one-time income from legal matters and higher R&D investments. Operating income margin was 29.6% of net sales, increasing 8.5 percentage points (+9.5 percentage points cc). Other revenue as a percentage of sales increased by 0.1 percentage points (cc). Cost of goods sold as a percentage of sales decreased by 2.6 percentage points (cc). R&D expenses as a percentage of net sales decreased by 6.9 percentage points (cc). SG&A expenses as a percentage of net sales decreased by 2.4 percentage points (cc). Other income and expense as a percentage of net sales decreased the margin by 2.5 percentage points (cc).

Core adjustments were USD 3.6 billion, mainly due to amortization, compared to USD 5.4 billion in the prior year. Core adjustments decreased compared to the prior year, mainly due to lower impairments and restructuring charges, partly offset by prior-year one-time income from legal matters.

Core operating income was USD 14.6 billion (+17%, +20% cc), mainly driven by higher net sales, partly offset by higher R&D investments. Core operating income margin was 39.4% of net sales, increasing 2.5 percentage points (+3.2 percentage points cc). Other revenue as a percentage of sales increased by 0.1 percentage points (cc). Core cost of goods sold as a percentage of sales increased by 0.2 percentage points (cc). Core R&D expenses as a percentage of net sales decreased by 0.7 percentage points (cc). Core SG&A expenses as a percentage of net sales decreased by 2.4 percentage points (cc). Core other income and expense as a percentage of net sales increased the margin by 0.2 percentage points (cc).

Interest expense and other financial income/expense

Interest expense amounted to USD 731 million compared to USD 638 million in the prior year mainly due to an increase in financial debts. Other financial income and expense amounted to an income of USD 107 million compared with an income of USD 204 million in the prior year, mainly due to higher net losses from the impact of IAS Standards 29 “Financial Reporting in Hyperinﬂationary Economies” and lower interest income, partly offset by realized gains on sale of financial assets.

Core other ﬁnancial income and expense amounted to an income of USD 212 million compared to an income of USD 293 million in the prior year, mainly due to lower interest income.

Income taxes

The tax rate in the first nine months was 11.9% compared to 12.0% in the prior year period. The current year tax rate was favorably impacted by the effect of changes in uncertain tax positions and the recognition of deferred tax assets on prior years' tax credit carryforwards, partially offset by the effect of a non-deductible impairment of goodwill. The prior year tax rate was favorably impacted by the effect of non-taxable income recognized related to a legal matter, tax benefits from the write-down of investments in subsidiaries and net decreases in uncertain tax positions. Excluding these impacts, the tax rate in the first nine months would have been 15.1% compared to 15.3% in the prior year period. The decrease from the prior year was mainly the result of a change in profit mix, partially offset by the impact of the enactment of Pillar Two tax legislation in Switzerland, which became effective on January 1, 2024.

The core tax rate (core taxes as a percentage of core income before tax) was 16.2% in the first nine months and 15.4% in the prior year period. The increase from the prior year was mainly the result of a change in profit mix and the impact of the enactment of Pillar Two tax legislation in Switzerland, which became effective on January 1, 2024.

Net income, EPS and free cash flow

Net income was USD 9.1 billion (+54%, +62% cc), mainly driven by higher operating income. EPS was USD 4.50 (+58%, +67% cc), benefiting from the lower weighted average number of shares outstanding.

Product commentary (relating to Q3 performance)

Cardiovascular, RENAL and METABOLIC

	Q3 2024	Q3 2023	% change	% change	9M 2024	9M 2023	% change	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc

Cardiovascular, renal and metabolic
Entresto	1 865	1 485	26	26	5 642	4 400	28	30

Leqvio	198	90	120	119	531	232	129	130

Total cardiovascular, renal and metabolic	2 063	1 575	31	31	6 173	4 632	33	35

Entresto (USD 1 865 million, +26%, +26% cc) sustained robust, demand-led growth. In the US and Europe, Entresto penetration grew through the continued adoption of guideline-directed medical therapy in heart failure. In China and Japan, Entresto volume growth was fueled by heart failure as well as hypertension. In the US, Novartis is in ANDA litigation with generic manufacturers. Novartis has appealed to reverse the negative US district court decision to uphold the validity of its combination patent covering Entresto and combinations of sacubitril and valsartan, which expires in 2025 (with pediatric exclusivity). Several generics have received final approval in the US. Novartis filed a lawsuit against FDA challenging the approval of one generic ANDA, which is now on appeal. Any US commercial launch of a generic Entresto product prior to the final outcome of the combination patent appeal, or ongoing litigations involving other patents or the FDA, may be at risk of later litigation developments.

Leqvio (USD 198 million, +120%, +119% cc) launch in the US and other markets is ongoing, delivering a medicine with effective and consistent LDL-C reduction in two maintenance doses per year. Focus remains on increased account and patient adoption and continuing medical education. Leqvio is registered in more than 100 countries and commercially available in 78. Novartis obtained global rights to develop, manufacture and commercialize Leqvio under a license and collaboration agreement with Alnylam Pharmaceuticals.

Immunology

	Q3 2024	Q3 2023	% change	% change	9M 2024	9M 2023	% change	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc

Immunology
Cosentyx	1 693	1 329	27	28	4 545	3 677	24	25

Xolair¹	418	369	13	15	1 244	1 085	15	17

Ilaris	372	335	11	12	1 096	979	12	16

Other					1		nm	nm

Total immunology	2 483	2 033	22	23	6 886	5 741	20	22


¹ Net sales reflect Xolair sales for all indications.
nm = not meaningful

Cosentyx (USD 1 693 million, +27%, +28% cc) sales grew mainly in the US, Europe and emerging growth markets, driven by strong demand from recent launches (including the HS indication and the IV formulation in the US) and volume growth in core indications (PsO, PsA, AS and nr-axSpA). Since initial approval in 2015, Cosentyx has shown sustained efficacy and a robust safety profile, treating more than 1.6 million patients across 8 indications.

Xolair (USD 418 million, ex-US +13%, +15% cc) growth was driven mainly by emerging growth markets and Europe. Novartis co-promotes Xolair with Genentech in the US and shares a portion of revenue as operating income but does not record any US sales.

Ilaris (USD 372 million, +11%, +12% cc) sales grew across all regions, led by the US and Europe. Contributors to growth include strong performance in the Periodic Fever Syndromes and Still’s disease indications.

Neuroscience

	Q3 2024	Q3 2023	% change	% change	9M 2024	9M 2023	% change	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc

Neuroscience
Kesimpta	838	657	28	28	2 274	1 530	49	49
excl. PY revenue deduction adjust.¹			55	56			61	62

Zolgensma	308	308	0	1	952	928	3	4

Aimovig	79	69	14	16	232	197	18	18

Other					1		nm	nm

Total neuroscience	1 225	1 034	18	19	3 459	2 655	30	31


¹ Sales growth benefiting from a one-time revenue deduction adjustment in Europe in the prior period
nm = not meaningful

Kesimpta (USD 838 million, +28%, +28% cc) sales grew reflecting increased demand and strong access. The prior period benefitted from a one-time revenue deduction adjustment (USD 118 million) in Europe. Kesimpta is a high efficacy B-cell therapy, with a favorable safety and tolerability profile and an at-home self-administration for a broad population of RMS patients. Kesimpta is now approved in 90 countries with more than 100,000 patients treated.

Zolgensma (USD 308 million, 0%, +1% cc) continues to treat mainly incident patients in established markets, translating into stable sales this quarter. Zolgensma is now approved in 55 countries with more than 4,000 patients treated globally through clinical trials, early access programs and in the commercial setting.

Aimovig (USD 79 million, ex-US, ex-Japan +14%, +16% cc) sales grew mainly in Europe driven by increased demand for migraine prevention. Novartis commercializes Aimovig ex-US and ex-Japan, while Amgen retains all rights in the US and in Japan.

ONCOLOGY

	Q3 2024	Q3 2023	% change	% change	9M 2024	9M 2023	% change	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc

Oncology
Kisqali	787	562	40	43	2 131	1 470	45	48

Promacta/Revolade	569	576	-1	0	1 633	1 706	-4	-3

Tafinlar + Mekinist¹	534	482	11	12	1 531	1 436	7	9

Jakavi	500	427	17	18	1 449	1 276	14	16

Tasigna	419	464	-10	-9	1 260	1 402	-10	-9

Pluvicto	386	256	51	50	1 041	707	47	47
excl. revenue deduction adjust.²			37	36			42	42

Lutathera	190	159	19	19	534	458	17	17

Scemblix	182	106	72	72	482	288	67	69

Piqray/Vijoice	111	128	-13	-13	340	374	-9	-9

Kymriah	102	124	-18	-17	335	388	-14	-12

Fabhalta	44		nm	nm	72		nm	nm

Other						1	nm	nm

Total oncology	3 824	3 284	16	18	10 808	9 506	14	15


¹ Majority of sales for Mekinist and Tafinlar are combination, but both can be used as monotherapy.
² Sales growth benefiting from a one-time revenue deduction adjustment in Europe
nm = not meaningful

Kisqali (USD 787 million, +40%, +43% cc) sales grew strongly across all regions, based on increasing recognition of its consistently reported overall survival in HR+/HER2- advanced breast cancer, Category 1 NCCN

guidelines recommendation, and highest ESMO-Magnitude of Clinical Benefit Scale scores in the CDK4/6 inhibitor class. Novartis is in US ANDA litigation with a generic manufacturer.

Promacta/Revolade (USD 569 million, -1%, 0% cc) sales were broadly in line following discontinued proactive promotion in most markets.

Tafinlar + Mekinist (USD 534 million, +11%, +12% cc) sales grew mainly in the US and emerging growth markets, driven by demand in BRAF+ adjuvant melanoma, NSCLC, pediatric low-grade glioma, and tumor agnostic indications, while maintaining demand in the highly competitive BRAF+ metastatic melanoma market.

Jakavi (USD 500 million, +17% USD, +18% cc) sales grew across all regions driven by strong demand in all indications. Incyte retains all rights to ruxolitinib (Jakafi®) in the US.

Tasigna (USD 419 million, -10%, -9% cc) sales declined across most regions due to lower demand and increasing competition.

Pluvicto (USD 386 million, +51%, +50% cc) sales grew in the US and Europe. Pluvicto is the only radioligand therapy approved by the FDA for the treatment of adult patients with progressive, PSMA-positive metastatic castration-resistant prostate cancer, who have already been treated with other anti-cancer treatments (ARPI and taxane-based chemotherapy). Pluvicto is now on the market in several EU countries. Current period sales benefited from a one-time revenue deduction adjustment (USD 36 million) in Europe. Novartis is in litigation with a manufacturer developing a radiopharmaceutical to treat PSMA-positive prostate cancer.

Lutathera (USD 190 million, +19%, +19% cc) sales grew across all regions due to increased demand and earlier line adoption (within indication) in the US and Japan. Novartis is in ANDA litigation with a generic manufacturer.

Scemblix (USD 182 million, +72% USD, +72% cc) sales grew across all regions, demonstrating continued high unmet need for effective and tolerable treatment options for adult CML patients treated with two or more tyrosine kinase inhibitors.

Piqray/Vijoice (USD 111 million, -13%, -13% cc) sales declined in the US due to increased competition.

Kymriah (USD 102 million, -18% USD, -17% cc) declined both in the US and ex-US, partly offset by strong performance in pediatric and young adult patients up to 25 years of age with B-cell acute lymphoblastic leukemia (pALL) in the US, and follicular lymphoma indication uptake ex-US.

Fabhalta (USD 44 million, nm) launch continues in PNH with an approval in IgAN in August 2024.

Established BRANDS

	Q3 2024	Q3 2023	% change	% change	9M 2024	9M 2023	% change	% change
	USD m	USD m	USD	cc	USD m	USD m	USD	cc

Established brands
Sandostatin Group	305	338	-10	-8	973	998	-3	-1

Lucentis	245	363	-33	-32	834	1 174	-29	-28

Exforge Group	174	187	-7	-4	544	557	-2	1

Galvus Group	159	181	-12	-6	458	539	-15	-8

Diovan Group	150	153	-2	2	450	466	-3	1

Gilenya	130	270	-52	-51	443	771	-43	-41

Contract manufacturing	279	471	-41	-41	829	1 174	-29	-29

Other	1 786	1 893	-6	-5	5 307	5 804	-9	-8

Total established brands	3 228	3 856	-16	-15	9 838	11 483	-14	-13

Sandostatin Group (USD 305 million, -10%, -8% cc) sales declined mainly in the US ahead of the entry of the first generic product in the US in October 2024.

Lucentis (USD 245 million, ex-US -33%, -32% cc) sales declined in Europe, emerging growth markets, and Japan, mainly due to competition.

Exforge Group (USD 174 million, -7%, -4% cc) sales declined mainly in China.

Galvus Group (USD 159 million, -12%, -6% cc) sales declined mainly in Japan and Europe, primarily due to generic competition.

Diovan Group (USD 150 million, -2%, +2% cc) sales grew (cc) mainly in emerging growth markets and Europe, partly offset by a decline in the US.

Gilenya (USD 130 million, +52%, -51% cc) sales declined (cc) due to generic competition, mainly in the US and Europe.

Discontinued operations

Third quarter

Nine months

Total Company

Third quarter

Nine months

Company Cash Flow and Balance Sheet

Cash flow

Third quarter

Net cash flows from operating activities from continuing operations amounted to USD 6.3 billion, compared with USD 5.3 billion in the prior-year quarter. This increase was mainly driven by higher net income from continuing operations, adjusted for non-cash items and other adjustments, including divestment gains.

In the prior-year quarter, net cash flows from operating activities from discontinued operations amounted to USD 0.1 billion (Q3 2024: nil).

Net cash outflows used in investing activities from continuing operations amounted to USD 0.4 billion, compared with USD 2.0 billion in the prior-year quarter.

In the current-year quarter, net cash outflows used in investing activities from continuing operations were mainly driven by USD 0.5 billion for purchases of intangible assets and USD 0.3 billion for purchases of property, plant and equipment. These were partly offset by cash inflows of USD 0.2 billion from the sale of financial assets; and by net proceeds of USD 0.3 billion from the sale of marketable securities, commodities and time deposits.

In the prior-year quarter, net cash outflows used in investing activities from continuing operations of USD 2.0 billion were mainly driven by cash outflows of USD 3.4 billion for acquisitions and divestments of businesses, net (including the acquisition of Chinook Therapeutics, Inc. for USD 3.1 billion, net of cash acquired USD 0.1 billion, and the acquisition of DTx Pharma Inc. for USD 0.5 billion, net of cash acquired USD 0.1 billion); USD 0.4 billion for purchases of intangible assets; and USD 0.3 billion for purchases of property, plant and equipment. These cash outflows were partly offset by the proceeds from the sale of intangible assets of USD 1.8 billion (including USD 1.75 billion proceeds from the divestment of the ‘front of eye’ ophthalmology assets to Bausch + Lomb); and USD 0.1 billion from the sale of financial assets and property, plant and equipment. Net proceeds from the sale of marketable securities, commodities and time deposits amounted to USD 0.2 billion.

In the prior-year quarter, net cash outflows used in investing activities from discontinued operations amounted to USD 0.2 billion (Q3 2024: nil).

Net cash outflows used in financing activities from continuing operations amounted to USD 0.4 billion, compared with USD 4.3 billion in the prior-year quarter.

In the current-year quarter, the cash outflows used in financing activities from continuing operations of USD 4.1 billion were mainly driven by USD 2.8 billion for net treasury share transactions, the change in current financial debts of USD 0.8 billion, and the repayments of other current financial debts of USD 0.3 billion. These cash outflows were partly offset by cash inflows of USD 3.7 billion from the issuance of US dollar denominated bonds with a notional amount of USD 3.7 billion.

In the prior-year quarter, net cash outflows used in financing activities from continuing operations of USD 4.3 billion were mainly driven by USD 2.2 billion for the repayment of two bonds denominated in euro (notional amounts of EUR 1.25 billion and of EUR 0.75 billion) at maturity; USD 1.6 billion payments for net treasury share transactions; and USD 0.4 billion from the net decrease in current financial debts.

In the prior-year quarter, net cash inflows from financing activities from discontinued operations amounted to USD 3.5 billion (Q3 2024: nil).

For the total Company, net cash flows from operating activities amounted to USD 6.3 billion, compared with USD 5.4 billion in the prior-year quarter, and free cash flow amounted to USD 6.0 billion, compared with USD 5.0 billion in the prior-year quarter.

Nine months

Net cash flows from operating activities from continuing operations amounted to USD 13.4 billion, compared with USD 11.7 billion in the prior-year period. This increase was mainly driven by higher net income from continuing

operations, adjusted for non-cash items and other adjustments, including divestment gains and lower payments out of provisions, partly offset by unfavorable changes in working capital.

In the prior-year period, net cash flows from operating activities from discontinued operations amounted to USD 0.2 billion (9M 2024: nil).

Net cash outflows used in investing activities from continuing operations amounted to USD 4.5 billion, compared with USD 7.7 billion net cash inflows in the prior-year period.

In the current year period, net cash outflows used in investing activities from continuing operations were mainly driven by USD 3.6 billion for acquisitions and divestments of businesses, including the acquisition of Mariana Oncology for USD 1.0 billion (USD 1.1 billion, net of cash acquired of USD 0.1 billion) and the acquisition of MorphoSys AG for USD 2.3 billion (USD 2.5 billion, net of cash acquired of USD 0.2 billion). Cash outflows for purchases of intangible assets amounted to USD 1.9 billion; purchases of property, plant and equipment amounted to USD 0.8 billion; and purchases of financial assets amounted to USD 0.1 billion. These were partly offset by cash inflows of USD 0.9 billion from the sale of financial assets (including USD 0.7 billion proceeds from the sale of Sandoz Group AG shares by consolidated foundations); and by net proceeds of USD 1.0 billion from the sale of marketable securities, commodities and time deposits.

In the prior-year period, net cash inflows from investing activities from continuing operations of USD 7.7 billion were driven by the net proceeds of USD 11.1 billion from the sale of marketable securities, commodities and time deposits; USD 2.0 billion from the sale of intangible assets (including USD 1.75 billion cash proceeds from the divestment of the ‘front of eye’ ophthalmology assets to Bausch + Lomb); and USD 0.3 billion from the sale of financial assets and property, plant and equipment. These cash inflows were partly offset by cash outflows of USD 3.6 billion for acquisitions and divestments of businesses, net (including the acquisition of Chinook Therapeutics, Inc. for USD 3.1 billion, net of cash acquired of USD 0.1 billion, and the acquisition of DTx Pharma Inc. for USD 0.5 billion, net of cash acquired of USD 0.1 billion); USD 1.3 billion for purchases of intangible assets; USD 0.7 billion for purchases of property, plant and equipment; and USD 0.1 billion for purchases of financial assets.

In the prior-year period, net cash outflows used in investing activities from discontinued operations amounted to USD 0.4 billion (9M 2024: nil).

Net cash outflows used in financing activities from continuing operations amounted to USD 8.7 billion, compared with USD 17.1 billion in the prior-year period.

In the current-year period, net cash outflows used in financing activities from continuing operations were mainly driven by USD 7.6 billion for the dividend payment; USD 5.5 billion for net treasury share transactions; the USD 2.15 billion repayment of a US dollar bond at maturity, and the USD 0.3 billion repayments of other current financial debts. These cash outflows were partly offset by cash inflows from the issuance of bonds totaling USD 6.1 billion (denominated in US dollars with a notional amount of USD 3.7 billion and in Swiss francs with a notional amount of CHF 2.2 billion, equivalent to USD 2.5 billion). The change in current financial debts resulted in net cash inflows of USD 1.0 billion.

In the prior-year period, net cash outflows used in financing activities from continuing operations of USD 17.1 billion were mainly driven by USD 7.3 billion for the dividend payment; USD 7.3 billion for net treasury share transactions; USD 2.2 billion for the repayment of two bonds denominated in euro (notional amounts of EUR 1.25 billion and of EUR 0.75 billion) at maturity, and USD 0.1 billion from the net decrease in current financial debts. Payments of lease liabilities amounted to USD 0.2 billion.

In the prior-year period, net cash inflows from financing activities from discontinued operations amounted to USD 3.4 billion (9M 2024: nil).

For the total Company, net cash flows from operating activities amounted to USD 13.4 billion, compared with USD 11.9 billion in the prior-year period, and free cash flow amounted to USD 12.6 billion, compared with USD 11.0 billion in the prior-year period.

Balance sheet

Assets

Total non-current assets of USD 72.3 billion increased by USD 2.8 billion compared to December 31, 2023.

Intangible assets other than goodwill increased by USD 1.0 billion mainly due the impact of the Mariana Oncology and MorphoSys business acquisitions, additions and favorable currency adjustments, partially offset by amortization, and impairments.

Goodwill increased by USD 1.6 billion mainly due the impact of the Mariana Oncology and MorphoSys business acquisitions, and favorable currency adjustments, partially offset by an impairment (see Note 3 to the interim consolidated financial statements).

Financial assets decreased by USD 0.5 billion mainly due to the sale of Sandoz AG shares by consolidated foundations. Property, plant and equipment increased by USD 0.2 billion mainly as additions were only partly offset by depreciation charges. Deferred tax assets increased by USD 0.3 billion.

Other non-current assets, right-of-use assets and investments in associated companies were broadly in line with December 31, 2023.

Total current assets of USD 31.3 billion increased by USD 0.8 billion compared to December 31, 2023.

Cash and cash equivalents increased by USD 0.2 billion mainly as cash generated through operating activities of USD 13.4 billion, net proceeds from changes in ﬁnancial debts of USD 4.7 billion and other net cash from investing and financing activities of USD 0.7 billion, were only partly offset by the USD 7.6 billion dividend payment, USD 3.6 billion for acquisitions of businesses (mainly for the Mariana Oncology and MorphoSys AG business acquisitions), USD 1.9 billion for purchases of intangible assets, and USD 5.5 billion for net purchases of treasury shares.

Marketable securities, commodities, time deposits and derivative ﬁnancial instruments decreased by USD 0.6 billion, mainly due to the net sales of marketable securities, commodities and time deposits and fair value adjustments on derivative ﬁnancial instruments. Trade receivables increased by USD 0.9 billion, mainly driven by the increase in net sales. Other current assets increased by USD 0.5 billion. Income tax receivables and inventories were broadly in line with December 31, 2023.

Liabilities

Total non-current liabilities of USD 32.0 billion increased by USD 5.1 billion compared to December 31, 2023.

Non-current ﬁnancial debts increased by USD 5.3 billion mainly due to the issuance of Swiss franc denominated bonds of USD 2.6 billion (notional amount of CHF 2.2 billion) and from the issuance of US dollar denominated bonds with a notional amount of USD 3.7 billion and ﬁnancial debts acquired through the MorphoSys business acquisition of USD 0.6 billion, partly offset by the reclassiﬁcation of USD 1.6 billion from non-current to current ﬁnancial debts consisting of a US dollar denominated bond with notional amount of USD 1.0 billion and a Swiss franc denominated bond of notional amount of CHF 0.5 billion both maturing in 2025.

Non-current lease liabilities, deferred tax liabilities and provisions and other non-current liabilities were broadly in line with December 31, 2023.

Total current liabilities of USD 28.1 billion increased by USD 1.7 billion compared to December 31, 2023.

Current ﬁnancial debts and derivative ﬁnancial instruments increased by USD 0.4 billion compared to December 31, 2023, mainly due to the issuance of commercial paper notes under the US commercial paper program and the reclassiﬁcation of USD 1.6 billion from non-current to current ﬁnancial debts of a US dollar denominated bond with notional amount of USD 1.0 billion and a Swiss franc denominated bond of notional amount of CHF 0.5 billion both maturing in 2025, partly offset by the repayment of a US dollar bond at maturity of USD 2.15 billion.

Trade payables decreased by USD 0.8 billion. Provisions and other current liabilities increased by USD 1.9 billion mainly driven by the increase in provisions for deductions from revenue. Current income tax liabilities increased by USD 0.3 billion. Current lease liabilities were broadly in line with December 31, 2023.

Equity

The Company’s equity decreased by USD 3.3 billion to USD 43.4 billion compared to December 31, 2023.

This decrease was mainly driven by the net income of USD 9.1 billion and favorable impact from equity-based compensation of USD 0.8 billion being more than offset by the cash-dividend to Novartis AG shareholders of USD 7.6 billion and the purchase of treasury shares of USD 5.8 billion.

Net debt and debt/equity ratio

The Company’s liquidity amounted to USD 14.0 billion as at September 30, 2024, compared with USD 14.4 billion as at December 31, 2023. Total non-current and current financial debts, including derivatives, amounted to USD 30.3 billion as at September 30, 2024, compared with USD 24.6 billion as at December 31, 2023.

The debt/equity ratio increased to 0.70:1 as at September 30, 2024, compared with 0.53:1 as at December 31, 2023. The net debt increased to USD 16.3 billion as at September 30, 2024, compared with USD 10.2 billion as at December 31, 2023.

Innovation Review

Novartis continues to focus its R&D portfolio prioritizing high value medicines with transformative potential for patients. We now focus on ~100 projects in clinical development.

Selected Innovative Medicines approvals

Product	Active ingredient/ Descriptor	Indication	Region

Kisqali	ribociclib	Hormone receptor-positive / human epidermal growth factor receptor 2-negative early breast cancer (adjuvant)	US

Fabhalta	iptacopan	IgA nephropathy	US

Selected Innovative Medicines projects awaiting regulatory decisions

		Completed submissions



Product	Indication	US	EU	Japan	News update

Kisqali	Hormone receptor-positive / human epidermal growth factor receptor 2-negative early breast cancer (adjuvant)		Q3 2023		– Positive CHMP opinion received in October

Scemblix	1L chronic myeloid leukemia	Q2 2024		Q3 2024	– US Priority Review granted – Japan and China submissions

Atrasentan	IgA nephropathy	Q2 2024

Fabhalta	C3G		Q3 2024	Q3 2024	– EU and Japan submissions

Pluvicto	Metastatic castration-resistant prostate cancer, pre-taxane	Q3 2024			– US submission

Lutathera	Gastroenteropancreatic neuroendocrine tumors, 1L in G2/3 tumors		Q2 2024

Coartem	Malaria (<5kg patients)				– Submission using MAGHP procedure in Switzerland to facilitate rapid approvals in developing countries

Selected Innovative Medicines pipeline projects

Compound/ product	Potential indication/ Disease area	First planned submissions	Current Phase	News update

Aimovig	Migraine, pediatrics	≥2027	3

AVXS-101 (OAV101)	Spinal muscular atrophy (IT formulation)	2025	3

Beovu	Diabetic retinopathy	2025	3

CFZ533 (iscalimab)	Sjögren's syndrome	≥2027	2

Cosentyx	Giant cell arteritis	2025	3

	Polymyalgia rheumatica	2026	3

DAK539 (pelabresib)	Myelofibrosis		3	– Morphosys aquisition – Based on Novartis review of 48-week data from the Ph3 MANIFEST-2 study, longer follow-up time is needed to determine, in consultation with Health Authorities, the regulatory path for pelabresib in myelofibrosis

FUB523 (zigakibart)	IgA nephropathy	≥2027	3

KAE609 (cipargamin)	Malaria, uncomplicated	≥2027	2

	Malaria, severe	≥2027	2

KLU156 (ganaplacide + lumefantrine)	Malaria, uncomplicated	2026	3	– FDA Orphan Drug designation – FDA Fast Track designation

Leqvio	Secondary prevention of cardiovascular events in patients with elevated levels of LDL-C	≥2027	3

	Primary prevention CVRR	≥2027	3

LNA043	Osteoarthritis	≥2027	2	– FDA Fast Track designation

Compound/ product	Potential indication/ Disease area	First planned submissions	Current Phase	News update

LNP023 (iptacopan)	IC-MPGN	≥2027	3

	Atypical haemolytic uraemic syndrome	≥2027	3

	Myasthenia gravis	≥2027	3

LOU064 (remibrutinib)	Chronic spontaneous urticaria	2025	3

	CINDU	≥2027	3

	Multiple sclerosis	≥2027	3

¹⁷⁷Lu-NeoB	Multiple solid tumors	≥2027	1

LXE408	Visceral leishmaniasis	≥2027	2

Pluvicto	Metastatic hormone sensitive prostate cancer	2025	3	– Event-driven trial

	Oligometastatic prostate cancer	≥2027	3

QGE031 (ligelizumab)	Food allergy		3	– Project discontinued

TQJ230 (pelacarsen)	Secondary prevention of cardiovascular events in patients with elevated levels of lipoprotein(a)	2025	3	– FDA Fast Track designation – China Breakthrough Therapy designation

VAY736 (ianalumab)	Auto-immune hepatitis		2	– Project discontinued following Ph2 readout

	Sjögren’s syndrome	2026	3	– FDA Fast Track designation

	Lupus nephritis	≥2027	3

	Systemic lupus erythematosus	≥2027	3

	1L immune thrombocytopenia	≥2027	3

	2L immune thrombocytopenia	≥2027	3

	Warm autoimmune hemolytic anemia	≥2027	3

Vijoyce	Lymphatic malformations	≥2027	3	– US, EU Orphan Drug designation

XXB750	Hypertension		2	– NVS will not advance further development following current scientific assessment and review of available data of early investigational studies.

YTB323	Severe refractory lupus nephritis / Systemic lupus erythematosus	≥2027	2

	1L high-risk large B-cell lymphoma	≥2027	2

Condensed Interim Consolidated Financial Statements

Consolidated income statements

Third quarter (unaudited)

(USD millions unless indicated otherwise)	Note	Q3 2024	Q3 2023

Net sales from continuing operations	9	12 823	11 782

Other revenues	9	349	310

Cost of goods sold		-3 234	-3 117

Gross profit from continuing operations		9 938	8 975

Selling, general and administration		-3 134	-3 091

Research and development		-2 392	-3 925

Other income		355	224

Other expense		-1 140	-421

Operating income from continuing operations		3 627	1 762

Loss from associated companies		-4	-3

Interest expense		-264	-222

Other financial income and expense		26	15

Income before taxes from continuing operations		3 385	1 552

Income taxes		-200	-39

Net income from continuing operations		3 185	1 513

Net income from discontinued operations	11		250

Net income		3 185	1 763

Attributable to:
Shareholders of Novartis AG		3 189	1 761

Non-controlling interests		-4	2


Weighted average number of shares outstanding – Basic (million)		2 012	2 062

Basic earnings per share from continuing operations (USD)¹		1.58	0.73

Basic earnings per share from discontinued operations (USD)¹			0.12

Total basic earnings per share (USD)¹		1.58	0.85


Weighted average number of shares outstanding – Diluted (million)		2 027	2 075

Diluted earnings per share from continuing operations (USD)¹		1.57	0.73

Diluted earnings per share from discontinued operations (USD)¹			0.12

Total diluted earnings per share (USD)¹		1.57	0.85


¹ Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.
The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated income statements

Nine months to September 30 (unaudited)

(USD millions unless indicated otherwise)	Note	9M 2024	9M 2023

Net sales from continuing operations	9	37 164	34 017

Other revenues	9	1 000	867

Cost of goods sold		-9 503	-9 450

Gross profit from continuing operations		28 661	25 434

Selling, general and administration		-9 065	-9 073

Research and development		-7 180	-8 804

Other income		877	1 322

Other expense		-2 279	-1 692

Operating income from continuing operations		11 014	7 187

Loss from associated companies		-35	-7

Interest expense		-731	-638

Other financial income and expense		107	204

Income before taxes from continuing operations		10 355	6 746

Income taxes		-1 236	-812

Net income from continuing operations		9 119	5 934

Net income from discontinued operations	11		440

Net income		9 119	6 374

Attributable to:
Shareholders of Novartis AG		9 123	6 370

Non-controlling interests		-4	4


Weighted average number of shares outstanding – Basic (million)		2 029	2 085

Basic earnings per share from continuing operations (USD)¹		4.50	2.84

Basic earnings per share from discontinued operations (USD)¹			0.21

Total basic earnings per share (USD)¹		4.50	3.05


Weighted average number of shares outstanding – Diluted (million)		2 044	2 098

Diluted earnings per share from continuing operations (USD)¹		4.46	2.83

Diluted earnings per share from discontinued operations (USD)¹			0.21

Total diluted earnings per share (USD)¹		4.46	3.04


¹ Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.
The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated statements of comprehensive income

Third quarter (unaudited)

(USD millions)	Q3 2024	Q3 2023

Net income	3 185	1 763


Other comprehensive income
Items that are or may be recycled into the consolidated income statement

Net investment hedge, net of taxes	-65	38

Cash flow hedge, net of taxes	-25

Currency translation effects, net of taxes	1 310	-467

Total of items that are or may be recycled	1 220	-429


Items that will never be recycled into the consolidated income statement

Actuarial (losses)/gains from defined benefit plans, net of taxes	-16	116

Fair value adjustments on equity securities, net of taxes	-34	27

Total of items that will never be recycled	-50	143



Total other comprehensive income	1 170	-286



Total comprehensive income	4 355	1 477

Total comprehensive income for the period attributable to:
Shareholders of Novartis AG	4 354	1 476

Continuing operations	4 354	1 292

Discontinued operations		184

Non-controlling interests	1	1


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Nine months to September 30 (unaudited)

(USD millions)	9M 2024	9M 2023

Net income	9 119	6 374


Other comprehensive income
Items that are or may be recycled into the consolidated income statement

Net investment hedge, net of taxes	-14	9

Cash flow hedge, net of taxes	-25

Currency translation effects, net of taxes	-54	55

Total of items that are or may be recycled	-93	64


Items that will never be recycled into the consolidated income statement

Actuarial gains from defined benefit plans, net of taxes	120	57

Fair value adjustments on equity securities, net of taxes	85	-19

Total of items that will never be recycled	205	38



Total other comprehensive income	112	102



Total comprehensive income	9 231	6 476

Total comprehensive income for the period attributable to:
Shareholders of Novartis AG	9 234	6 472

Continuing operations	9 234	6 053

Discontinued operations		419

Non-controlling interests	-3	4


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated balance sheets

(USD millions)	Note	Sep 30, 2024 (unaudited)	Dec 31, 2023 (audited)

Assets
Non-current assets
Property, plant and equipment		9 749	9 514

Right-of-use assets		1 452	1 410

Goodwill		24 930	23 341

Intangible assets other than goodwill		27 902	26 879

Investments in associated companies		106	205

Deferred tax assets		4 646	4 309

Financial assets		2 086	2 607

Other non-current assets		1 389	1 199

Total non-current assets		72 260	69 464

Current assets
Inventories		5 939	5 913

Trade receivables		7 966	7 107

Income tax receivables		184	426

Marketable securities, commodities, time deposits and derivative financial instruments		411	1 035

Cash and cash equivalents		13 609	13 393

Other current assets		3 155	2 607

Total current assets		31 264	30 481

Total assets		103 524	99 945


Equity and liabilities
Equity
Share capital		793	825

Treasury shares		-40	-41

Reserves		42 564	45 883

Equity attributable to Novartis AG shareholders	4	43 317	46 667

Non-controlling interests		124	83

Total equity		43 441	46 750

Liabilities
Non-current liabilities
Financial debts	10	23 750	18 436

Lease liabilities		1 596	1 598

Deferred tax liabilities		2 216	2 248

Provisions and other non-current liabilities		4 389	4 523

Total non-current liabilities		31 951	26 805

Current liabilities
Trade payables		4 087	4 926

Financial debts and derivative financial instruments		6 566	6 175

Lease liabilities		247	230

Current income tax liabilities		2 165	1 893

Provisions and other current liabilities		15 067	13 166

Total current liabilities		28 132	26 390

Total liabilities		60 083	53 195

Total equity and liabilities		103 524	99 945


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated statements of changes in equity

Third quarter (unaudited)

				Reserves



(USD millions)	Note	Share capital	Treasury shares	Retained earnings	Total value adjustments	Issued share capital and reserves attributable to Novartis shareholders	Non- controlling interests	Total equity

Total equity at July 1, 2024		793	-25	45 836	-4 871	41 733	169	41 902

Net income				3 189		3 189	-4	3 185

Other comprehensive income					1 165	1 165	5	1 170

Total comprehensive income				3 189	1 165	4 354	1	4 355

Purchase of treasury shares			-15	-2 952		-2 967		-2 967

Exercise of options and employee transactions				33		33		33

Equity-based compensation			0	265		265		265

Shares delivered to Sandoz employees as a result of the Sandoz spin-off				0		0		0

Taxes on treasury share transactions				-35		-35		-35

Changes in non-controlling interests							-4	-4

Fair value adjustments on financial assets sold				22	-22

Impact of change in ownership of consolidated entities				-70		-70	-42	-112

Other movements	4.4			4		4		4

Total of other equity movements			-15	-2 733	-22	-2 770	-46	-2 816

Total equity at September 30, 2024		793	-40	46 292	-3 728	43 317	124	43 441


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

				Reserves



(USD millions)	Note	Share capital	Treasury shares	Retained earnings	Total value adjustments	Issued share capital and reserves attributable to Novartis shareholders	Non- controlling interests	Total equity

Total equity at July 1, 2023		842	-52	55 682	-4 625	51 847	84	51 931

Net income				1 761		1 761	2	1 763

Other comprehensive income					-285	-285	-1	-286

Total comprehensive income				1 761	-285	1 476	1	1 477

Dividend in kind	3			-13 962		-13 962		-13 962

Purchase of treasury shares			-6	-1 390		-1 396		-1 396

Reduction of share capital		-17	26	-9

Exercise of options and employee transactions				-2		-2		-2

Equity-based compensation			0	221		221		221

Taxes on treasury share transactions				3		3		3

Transaction costs, net of taxes	4.3			-74		-74		-74

Changes in non-controlling interests							-4	-4

Fair value adjustments on financial assets sold				52	-52

Other movements	4.4			51		51		51

Total of other equity movements		-17	20	-15 110	-52	-15 159	-4	-15 163

Total equity at September 30, 2023		825	-32	42 333	-4 962	38 164	81	38 245


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated statements of changes in equity

Nine months to September 30 (unaudited)

				Reserves



(USD millions)	Note	Share capital	Treasury shares	Retained earnings	Total value adjustments	Issued share capital and reserves attributable to Novartis shareholders	Non- controlling interests	Total equity

Total equity at January 1, 2024		825	-41	49 649	-3 766	46 667	83	46 750

Net income				9 123		9 123	-4	9 119

Other comprehensive income					111	111	1	112

Total comprehensive income				9 123	111	9 234	-3	9 231

Dividends	4.1			-7 624		-7 624		-7 624

Purchase of treasury shares			-30	-5 750		-5 780		-5 780

Reduction of share capital	4.2	-32	26	6

Exercise of options and employee transactions				-2		-2		-2

Equity-based compensation			5	812		817		817

Shares delivered to Sandoz employees as a result of the Sandoz spin-off				12		12		12

Taxes on treasury share transactions				-27		-27		-27

Changes in non-controlling interests							-4	-4

Fair value adjustments on financial assets sold				73	-73

Impact of change in ownership of consolidated entities				-98		-98	48	-50

Other movements	4.4			118		118		118

Total of other equity movements		-32	1	-12 480	-73	-12 584	44	-12 540

Total equity at September 30, 2024		793	-40	46 292	-3 728	43 317	124	43 441


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

				Reserves



(USD millions)	Note	Share capital	Treasury shares	Retained earnings	Total value adjustments	Issued share capital and reserves attributable to Novartis shareholders	Non- controlling interests	Total equity

Total equity at January 1, 2023		890	-92	63 540	-4 996	59 342	81	59 423

Net income				6 370		6 370	4	6 374

Other comprehensive income					102	102	0	102

Total comprehensive income				6 370	102	6 472	4	6 476

Dividends				-7 255		-7 255		-7 255

Dividend in kind	3			-13 962		-13 962		-13 962

Purchase of treasury shares			-41	-7 243		-7 284		-7 284

Reduction of share capital		-65	94	-29

Exercise of options and employee transactions			2	149		151		151

Equity-based compensation			5	649		654		654

Taxes on treasury share transactions				11		11		11

Transaction costs, net of taxes	4.3			-74		-74		-74

Changes in non-controlling interests							-4	-4

Fair value adjustments on financial assets sold				68	-68

Other movements	4.4			109		109		109

Total of other equity movements		-65	60	-27 577	-68	-27 650	-4	-27 654

Total equity at September 30, 2023		825	-32	42 333	-4 962	38 164	81	38 245


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated statements of cash flows

Third quarter (unaudited)

(USD millions)	Note	Q3 2024	Q3 2023

Net income from continuing operations		3 185	1 513

Adjustments to reconcile net income from continuing operations to net cash flows from operating activities from continuing operations
Reversal of non-cash items and other adjustments	6.1	2 626	3 329

Dividends received from associated companies and others			1

Interest received		112	109

Interest paid		-239	-178

Change in other financial receipts			37

Change in other financial payments		63	-4

Income taxes paid	6.2	-285	-426

Net cash flows from operating activities from continuing operations before working capital and provision changes		5 462	4 381

Payments out of provisions and other net cash movements in non-current liabilities		-216	-255

Change in net current assets and other operating cash flow items	6.3	1 040	1 178

Net cash flows from operating activities from continuing operations		6 286	5 304

Net cash flows from operating activities from discontinued operations			74

Total net cash flows from operating activities		6 286	5 378

Purchases of property, plant and equipment		-321	-261

Proceeds from sale of property, plant and equipment		1	51

Purchases of intangible assets		-478	-422

Proceeds from sale of intangible assets		23	1 823

Purchases of financial assets		-53	-11

Proceeds from sale of financial assets		226	91

Proceeds from sale of other non-current assets		1

Acquisitions and divestments of interests in associated companies, net		-12	-3

Acquisitions and divestments of businesses, net	6.4	-51	-3 443

Purchases of marketable securities, commodities and time deposits		-958	-28

Proceeds from sale of marketable securities, commodities and time deposits		1 248	199

Net cash flows used in investing activities from continuing operations		-374	-2 004

Net cash flows used in investing activities from discontinued operations			-208

Total net cash flows used in investing activities		-374	-2 212

Purchases of treasury shares		-2 854	-1 625

Proceeds from exercised options and other treasury share transactions, net		5	-1

Proceeds from non-current financial debts		3 670

Repayments of the current portion of non-current financial debts			-2 223

Change in current financial debts		-807	-418

Repayments of other current financial debts		-289

Payments of lease liabilities		-64	-63

Payments from changes in ownership interests in consolidated subsidiaries		-90

Other financing cash flows, net		47	24

Net cash flows used in financing activities from continuing operations		-382	-4 306

Net cash flows from financing activities from discontinued operations	11		3 474

Total net cash flows used in financing activities		-382	-832

Net change in cash and cash equivalents before effect of exchange rate changes		5 530	2 334

Less cash and cash equivalents from discontinued operations at September 30, 2023			-648

Effect of exchange rate changes on cash and cash equivalents		176	-166

Net change in cash and cash equivalents		5 706	1 520

Cash and cash equivalents at July 1		7 903	10 885

Cash and cash equivalents at September 30		13 609	12 405


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Consolidated statements of cash flows

Nine months to September 30 (unaudited)

(USD millions)	Note	9M 2024	9M 2023

Net income from continuing operations		9 119	5 934

Adjustments to reconcile net income from continuing operations to net cash flows from operating activities from continuing operations
Reversal of non-cash items and other adjustments	6.1	7 523	8 578

Dividends received from associated companies and others		1	2

Interest received		347	482

Interest paid		-641	-513

Other financial receipts			64

Other financial payments		-31	-14

Income taxes paid	6.2	-1 334	-1 694

Net cash flows from operating activities from continuing operations before working capital and provision changes		14 984	12 839

Payments out of provisions and other net cash movements in non-current liabilities		-847	-1 181

Change in net current assets and other operating cash flow items	6.3	-711	15

Net cash flows from operating activities from continuing operations		13 426	11 673

Net cash flows from operating activities from discontinued operations			238

Total net cash flows from operating activities		13 426	11 911

Purchases of property, plant and equipment		-808	-654

Proceeds from sale of property, plant and equipment		39	73

Purchases of intangible assets		-1 875	-1 316

Proceeds from sale of intangible assets		43	1 953

Purchases of financial assets		-145	-77

Proceeds from sale of financial assets		936	201

Proceeds from sale of other non-current assets		1

Acquisitions and divestments of interests in associated companies, net		-8	-8

Acquisitions and divestments of businesses, net	6.4	-3 649	-3 550

Purchases of marketable securities, commodities and time deposits		-1 198	-97

Proceeds from sale of marketable securities, commodities and time deposits		2 184	11 216

Net cash flows (used in)/from investing activities from continuing operations		-4 480	7 741

Net cash flows used in investing activities from discontinued operations			-385

Total net cash flows (used in)/from investing activities		-4 480	7 356

Dividends paid to shareholders of Novartis AG	4.1	-7 624	-7 255

Purchases of treasury shares		-5 569	-7 468

Proceeds from exercised options and other treasury share transactions, net		30	158

Proceeds from non-current financial debts		6 143

Repayments of the current portion of non-current financial debts		-2 150	-2 223

Change in current financial debts		982	-128

Repayments of other current financial debts		-289

Payments of lease liabilities		-190	-194

Payments from changes in ownership interests in consolidated subsidiaries		-137

Other financing cash flows, net		58	42

Net cash flows used in financing activities from continuing operations		-8 746	-17 068

Net cash flows from financing activities from discontinued operations	11		3 397

Total net cash flows used in financing activities		-8 746	-13 671

Net change in cash and cash equivalents before effect of exchange rate changes		200	5 596

Less cash and cash equivalents from discontinued operations at September 30, 2023			-648

Effect of exchange rate changes on cash and cash equivalents		16	-60

Net change in cash and cash equivalents		216	4 888

Cash and cash equivalents at January 1		13 393	7 517

Cash and cash equivalents at September 30		13 609	12 405


The accompanying Notes form an integral part of the condensed interim consolidated financial statements

Notes to the Condensed Interim Consolidated Financial Statements for the three month and nine month period ended September 30, 2024 (unaudited)

1. Basis of preparation

The consolidated financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRS^®) Accounting Standards as issued by the International Accounting Standards Board. They are prepared in accordance with the historical cost convention, except for items that are required to be accounted for at fair value. These Condensed Interim Consolidated Financial Statements for the three month and nine month period ended September 30, 2024, were prepared in accordance with International Accounting Standards (IAS^®) Standards 34 Interim Financial Reporting and accounting policies set out in the 2023 Annual Report published on January 31, 2024.

At the Novartis AG Extraordinary General Meeting, held on September 15, 2023, our shareholders approved the spin-off of the Sandoz business. Following the shareholder approval IFRS Accounting Standards required the Sandoz Division and selected portions of corporate activities attributable to Sandoz’s business, as well as certain expenses related to the spin-off (the “Sandoz business”) to be reported as discontinued operations in the consolidated financial statements. As a result, the Sandoz business has been presented as discontinued operations in the condensed interim consolidated financial statements. This requires the three month and nine month period ended September 30, 2023, consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows to present separately continuing operations from discontinued operations.

The shareholder approval on September 15, 2023, for the spin-off the Sandoz business, required the recognition of a distribution liability at the fair value of the Sandoz business. Novartis policy is to measure the distribution liability at the fair value of the Sandoz business net assets taken as a whole. The distribution liability was recognized through a reduction in retained earnings. It was required to be adjusted at each balance sheet date for changes in its estimated fair value, up to the date of the distribution to shareholders through retained earnings. Any resulting impairment of the business assets to be distributed would have been recognized in the consolidated income statements in “Other expense” of discontinued operations, at the date of initial recognition of the distribution liability or at subsequent dates resulting from changes of the distribution liability valuation.

At the October 4, 2023, distribution settlement date, the resulting gain, which is measured as the excess amount of the distribution liability over the then-carrying value of the net assets of the business distributed, was recognized on the line “Gain on distribution of Sandoz Group AG to Novartis AG shareholders” within the income statement of discontinued operations.

The recognition of the distribution liability required the use of valuation techniques for the purposes of impairment testing of the Sandoz business’ assets to be distributed and for the measurement of the fair value of the distribution liability. These valuations required the use of management assumptions and estimates related to the Sandoz business’ future cash flows, market multiples, opening share price of Sandoz Group AG on the first day of trading its shares on the SIX Swiss Exchange, to estimate day one market value, and control premiums to apply in estimating the Sandoz business fair value. These fair value measurements are classified as “Level 3” in the fair value hierarchy. The section “—Goodwill and intangible assets other than goodwill” in Note 1 to the Consolidated Financial Statements in the Annual Report 2023 provides additional information on key assumptions that are highly sensitive in the estimation of fair values using valuation techniques.

Transaction costs that are directly attributable to the Distribution (spin-off) of the Sandoz business to Novartis AG shareholders by way of a dividend in kind, and that would otherwise have been avoided, were accounted for as a deduction from equity (within retained earnings). Prior to the recognition of the distribution liability, these costs were recorded as prepaid expenses in the consolidated balance sheet.

For further information and disclosures, refer to Note 3 and Note 11.

2. Accounting policies

The Company’s accounting policies are set out in Note 1 to the Consolidated Financial Statements in the 2023 Annual Report and conform with IFRS Accounting Standards as issued by the International Accounting Standards Board.

The preparation of financial statements requires management to make certain estimates and assumptions, either at the balance sheet date or during the period, which affect the reported amounts of revenues, expenses, assets, liabilities, including the distribution liability and contingent amounts.

Estimates are based on historical experience and other assumptions that are considered reasonable under the given circumstances and are regularly monitored. Actual outcomes and results could differ from those estimates and assumptions. Revisions to estimates are recognized in the period in which the estimate is revised.

As disclosed in the 2023 Annual Report, goodwill, and acquired In-Process Research & Development projects are reviewed for impairment at least annually and these, as well as all other investments in intangible assets, are reviewed for impairment whenever an event or decision occurs that raises concern about their balance sheet carrying value. The amount of goodwill and other intangible assets on the Company’s consolidated balance sheet has risen significantly in recent years, primarily from acquisitions. Impairment testing may lead to potentially significant impairment charges in the future that could have a materially adverse impact on the Company’s results of operations and financial condition.

The Company’s activities are not subject to significant seasonal fluctuations.

Status of adoption of significant new or amended IFRS standards or interpretations

No new IFRS Accounting Standards were adopted by the Company in 2024. In addition, new IFRS Accounting Standards amendments or interpretations that became effective in 2024 did not have a material impact on the Company’s consolidated financial statements.

In the second quarter of 2024, the following new IFRS Accounting Standard, which is not yet effective, was issued by the International Accounting Standards Board:

IFRS 18 Presentation and Disclosures in Financial Statements

IFRS 18 Presentation and Disclosure in Financial Statements was issued by the International Accounting Standards Board in April 2024. IFRS 18 is effective on January 1, 2027, and is required to be applied retrospectively to comparative periods presented, with early adoption permitted. IFRS 18, upon adoption replaces IAS Standards 1 - Presentation of Financial Statements.

IFRS 18 sets out new requirements focused on improving financial reporting by:

• requiring additional defined structure to the statement of profit or loss (i.e. consolidated statement of income), to reduce diversity in the reporting, by requiring five categories (operating, investing, financing, income taxes and discontinued operations) and defined subtotals and totals (operating income, income before financing, income taxes and net income),

• requiring disclosures in the notes to the financial statements about management-defined performance measures (i.e. non-IFRS measures), and

• adding new principles for aggregation and disaggregation of information in the primary financial statements and notes.

IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its ‘operating profit or loss’, due to the classification of certain income and expense items between the five categories of the consolidated income statement. It might also change what an entity reports as operating activities, investing activities and financing activities within the statement of cash flows, due to the change in classification of certain cash flow items between these three categories of the cash flows statement. Novartis is currently assessing the impact of adopting IFRS 18.

Based on the Company’s assessment, there are no other IFRS Accounting Standards, amendments or interpretations not yet effective in 2024 that would be expected to have a material impact on the Company’s consolidated financial statements.

3. Significant acquisitions of businesses and spin-off of Sandoz business

The Company applied the acquisition method of accounting for businesses acquired, and did not elect to apply the optional concentrati

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