Sandoz reached 520 million patients worldwide in 2015 and aims to reach one billion patients by expanding access to medicine. The presentation discusses the global challenge of access to healthcare, with over 2 billion people unable to access needed medicines. Sandoz is uniquely positioned within Novartis to help solve the access challenge through its broad portfolio, focus on priority markets, and leadership in generics, biosimilars, and anti-infectives.
3. Sandoz International
Agenda
1. The global access challenge
2. Reaching patients worldwide
3. Leading where it matters
4. Targeting those in need
5. Uniquely positioned to win
6. Back-up slides
Business Use Only3
5. Sandoz International
Sustainable universal access is a
key global healthcare objective
Business Use Only5
>400m >2 billion
~2 million
# of people who lack access
to essential health services
# of people who cannot access
the medicines they need
# of preventable deaths every year
due to tuberculosis and malaria
7.35 trillion
Global cost of healthcare (2013):
Almost double the amount spent
in 2000
Source: WHO: Health in 2015; Access to Medicine Index 2015
6. Sandoz International
Growing Populations
The global population continues to
grow...
6
+1bn
About 8.5 billion people are
expected to inhabit the planet
by the year 2030
2030by
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7. Sandoz International
Rapid Aging
... and the world is also getting
older...
7
+500m
About 1.4 billion people worldwide are
projected to be 60 or older by the year 2030,
fueling a rise in chronic illness
60
by
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2030
over
8. Sandoz International
Increasing Healthcare Demand
... putting healthcare systems
under increasing pressure...
8
13T
If growth trends continue, global
healthcare outlays could rise to
USD 13 trillion by 2025
2025by
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9. Sandoz International
... but access is about more than
just affordability
• World Health Organization (WHO) Sustainable
Development Goals outline how to achieve Universal
Health Coverage by 2030
• WHO says access comprises six main elements:
• Effective pre-qualification for essential medicines
• Appropriate product selection (e.g. pricing policies)
• Improved coverage for noncommunicable diseases
• Appropriate use of medicines (adherence)
• Tackling antimicrobial resistance (AMR) and ensuring responsible
use of medicines
• Addressing underserved clinical areas
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Source: WHO: Health in 2015
11. Sandoz International
• We cover all major
needs, with ~1000
molecules and 50 bn
units per year
• We have a leading
pipeline of >800 projects
• We lead in areas from
generic CV1, CNS1, pain
and dermatology to
oncology and respiratory
Sandoz is a global leader with a
broad and innovative portfolio
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1. Cardiovascular; Central Nervous System
12. Sandoz International
We focus on making access to
medicine happen...
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12
• We reach patients worldwide with the
medicines they need
• We lead the field where it really matters
• We target communities most in need
Our Mission and Vision
Our integrated approach
• Our mission at Novartis is to discover new
ways to improve and extend people’s lives
• Our Vision is to be a trusted leader in
changing the practice of medicine
Our Purpose
• At Sandoz, we pioneer novel approaches to
help people access high-quality medicine
• This is how we help improve society’s ability
to support growing healthcare needs
• Find out more here:
13. Sandoz International
... and on keeping healthcare
systems sustainable
• The savings we generate help to keep healthcare
systems sustainable and free up funds for innovation
• In the US alone, use of our medicines saved an
estimated USD 85 bn over the past 10 years
• In the EU, generic medicines ensure equal access to
frontline treatments for more than 500 million people
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Source: Internal estimates based on GPhA: Generic Drug Savings in the US; Medicines for Europe: Generic Medicines Factsheet.
15. Sandoz International
2015 Sandoz Financial Results1
USD at actual rates
Third party sales 9.157 billion
(+7% in cc)
Core operating income 1.659 billion
(+17%)
Core Return on Sales (ROS) 18.1%
Sandoz had strong 2015 sales
growth in all key business areas
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1. Audited sales as of end 2015; restated 2015 sales (unaudited) of 10.070 bn, including transfer of 19 mature brands from Novartis
Pharmaceuticals to Sandoz
6339
772
1441
605
2015 sales per franchise, in
million USD,
Total 2015 sales:
USD 9.157 billion
Retail Generics Biopharma
Anti-Infectives Onco Injectables
16. Sandoz International
• Biologics have revolutionized
modern medicine, but access
remains limited
• As the pioneer of biosimilars,
we are leading the change –
and have been for 10 years
• >USD 100 bn worth of
biologics will come off patent
by 20201, enabling
biosimilars to drive access
• We intend to continue leading
the way, by launching five
major biosimilars until 2020
We are the global pioneer and
leader in biosimilar medicines...
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1. Evaluate Pharma, 2015
17. Sandoz International
• Antibiotics are the cornerstone
of global healthcare systems
• As a global generic leader, we
play a critical role in keeping
healthcare sustainable
• We are committed to tackling
anti-microbial resistance
(AMR) and promoting rational
use of medicines
• WHO estimates that AMR
could lead to 10m more
deaths annually by 20501
...and the global leader in generic
antibiotic medicines
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1. Review on Antimicrobial Resistance, 2016
19. Sandoz International
Our targeted access programs aim
to address three related areas
• Our business model is based on driving access, by reaching more
patients with the medicines they need
• We are committed to operating ethically and sustainably
• Our corporate responsibility work focuses on three main areas
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Access to medical
information
Access to
medicines
Access to
medical capacity
20. Sandoz International
Noncommunicable
diseases (NCDs):
• 28 million people die annually from NCDs
in lower-income countries
• “Novartis Access” launched in 2015 to
enhance access to NCD treatments
• Portfolio offered at USD 1 per treatment
per month to public sector customers
Infectious diseases:
• Novartis Malaria Initiative has provided
>800m treatments to the public sector of
malaria-endemic countries since 2001
We focus on the medical needs of
lower-income countries...
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21. Sandoz International
Maternal and child health:
• Sponsoring training for midwives
• Partnering with the United
Nations to help prevent deaths
from pneumonia
• Working with World Child
Cancer to “even the odds”
Respiratory:
• Supporting European and
African doctors who partner to
improve asthma diagnosis and
treatment
... and on promoting access to
medical information and training
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22. Sandoz International
In 2016, we launched the Sandoz
“Healthcare Acccess Challenge”
Global Communications Onboarding ǀ November 3, 2016 ǀ Business Use Only22
• Despite significant advances made by
modern medicine, universal access to
healthcare is still arguably the single
largest unmet medical need
• Sandoz HACk – Healthcare Access
Challenge invites young people to “re-
imagine” access to healthcare by
finding solutions to local problems
• Six shortlisted finalists will develop
their ideas on OpenIDEO and pitch at
Wired Health (London, March 2016)
• Three winners will receive EUR 20,000
seed funding and mentoring from
Sandoz to bring their ideas to life
24. Sandoz International
Anti-infectives:
First
oral penicillin
Sandoz has a unique scientific
heritage with a history of “firsts”
1951 1980 2006 2010 2013 2015
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Biotechnology:
First
recombinant
interferon-alfa
Omnitrope:
First
biosimilar,
launched in
Europe
Enoxaparin:
First
USD 1 billion
generic,
launched in US
AirFluSal:
First-of-a-kind
respiratory
inhaler device
launched in EU
Glatopa:
First
US approval and
launch of this
complex generic
multiple sclerosis
treatment
Zarxio:
First
US biosimilar
approved and
launched under
BPCIA pathway
25. Sandoz International
We are uniquely positioned within
Novartis
Business Use Only25
Novartis
Pharmaceuticals
Innovative medicines* Eye care devicesGenerics and biosimilars
Novartis
Oncology
AlconSandoz
• Novartis is the first company with global scale in both branded
pharmaceuticals and generics
• Sandoz is one of three industry-leading Novartis divisions
• Sandoz is growing rapidly and expanding into new fields, including
mature brands
26. Sandoz International
We believe that, together, we can
make a real difference for patients
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The Novartis workforce includes people
of 144 nationalities
Novartis employs 118,700 people worldwide
Our culture is defined by clear values:
Innovation, quality, collaboration,
performance, courage, and integrity
28. Sandoz International
Disclaimer
This presentation contains forward-looking statements that can be identified by words such as “potential,” “expected,” “will,” “planned,” or
similar terms, or by express or implied discussions regarding potential new products, potential new indications for existing products, or
regarding potential future revenues from any such products; potential shareholder returns or credit rating; or regarding the potential
completion of the announced transactions with GSK and Lilly, the potential completion of the announced transaction regarding the Novartis
flu vaccines franchise, or regarding potential future sales or earnings of any of the businesses involved in the announced transactions, or of
the Novartis Group, and regarding any potential strategic benefits, synergies or opportunities as a result of the announced transactions; or
by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-
looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant
known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no
guarantee that any new products will be approved for sale in any market, or that any new indications will be approved for any existing
products in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such products will
achieve any particular revenue levels. Nor can there be any guarantee that the announced transactions will be completed in the expected
form or within the expected time frame or at all. Neither can there be any guarantee that Novartis will be able to realize any of the potential
strategic benefits, synergies or opportunities as a result of the transactions. Neither can there be any guarantee that Novartis or any of the
businesses involved in the transactions will achieve any particular financial results in the future. In particular, management's expectations
could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally, including an
unexpected failure to obtain necessary government approvals for the transactions, or unexpected delays in obtaining such approvals; the
potential that the strategic benefits, synergies or opportunities expected from the transactions may not be realized or may take longer to
realize than expected; the inherent uncertainties involved in predicting shareholder returns or credit ratings; the uncertainties inherent in
research and development, including unexpected clinical trial results and additional analysis of existing clinical data; the Company’s ability
to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on the Company of the loss of
patent protection and exclusivity on key products which commenced in prior years and will continue this year; unexpected manufacturing or
quality issues; global trends toward health care cost containment, including ongoing pricing pressures; uncertainties regarding actual or
potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding
sales and marketing practices, government investigations and intellectual property disputes; general economic and industry conditions;
uncertainties regarding the effects of the persistently weak global economic and financial environment; uncertainties regarding future global
exchange rates; uncertainties regarding future demand for our products; uncertainties involved in the development of new healthcare
products; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange
Commission. Novartis is providing the information in this presentation 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.
Business Use Only28
30. Sandoz International
Sandoz is a global leader in generic
and biosimilar medicines
30 Business Use Only
1 In the combined regions of North America, Europe, Japan and Australia
2 #1 in Gx market by volume
Therapeutic Areas
Unique experience and knowledge
Sandoz is #1 and the leader in
• Biosimilars1
• Anti-Infectives2
• Dermatology2
• Transplant / Immunosuppressants2
Geographies
Leadership in prioritized geographies
Sandoz leads in key markets
• #1 in Western Europe (incl. Germany)
• #1 in CEE (#2 in Russia)
• #3 in US
31. Sandoz International
We focus on six priorities to drive
profitable growth
31 Business Use Only
Sandoz 6 Priorities
6P R I O R I T I E S
Sustainable
Growth
4
Tech Ops
& Quality
6
D&R /
BD&L
5
Biosimilars
3
Patients,
People &
Collaboration
1
Geographic
Focus
2
32. Sandoz International
Industry trends reinforce our choice
of priorities
32 Business Use Only
Ensure
customer
focus/ brand
management
Drive
geographic
focus
Focus on
supply, cost
and quality
Continuous
differentiated
new launch
pipeline
Capitalize on
the biosimilar
opportunity
Targeted
portfolio
expansion and
“value-added”
meds
Industry Trends
3 41 3
Focusing on
markets that count,
now and in future.
Making strategic
choices to
streamline the
organization
Leveraging
breadth of Novartis
capabilities to build
a compelling
customer value
proposition
Confirming future
TA and value-
added drivers to
build a competitive
and differentiated
portfolio
Optimizing
manufacturing
network to step-
change supply
reliability,
quality and
competitiveness
Revamping our
New Launch
engine to fuel
future growth.
Building proactive
BD, M&A and
strategic
partnerships
Reinforcing our #1
market position.
Building our best-
in-class pipeline.
Driving continued
double-digit growth
What we are focusing on at Sandoz
5 62 51 2
33. Sandoz International
Driving focus by restructuring low-margin
businesses:
• Ongoing commercial exit in Indonesia, exit in
Venezuela, exit / divestment of Frankfurt API
(7ACA) site
• “Fine-tuned” model: Argentina, Colombia,
Ecuador, India, Nordics, Pakistan, Portugal
Targeting resources and delivering growth in our two
critical segments:
Priority Focus markets
Significant part of our existing and future business
Priority Growth markets
Significant market opportunity and absolute growth
top and bottom line
Region Growth
We constantly fine-tune our
market models to drive growth
33 Business Use Only
Optimize / exit
Priority Focus
Priority Growth
34. Sandoz International
We performed solidly in Q3 2016,
despite fewer US launches
Sandoz financials YTD / Q3 20161
USD million at actual rates
1 Including Mature Brands transferred from Innovative Medicines Division
34 Business Use Only
YTD 2016 % change cc Q3 2016 % change cc
Net sales 7539 +2 2517 -1
OpInc 1080 +12 354 -9
ROS (%) 14.3 14.1
Core OpInc 1550 +4 530 +1
Core ROS (%) 20.6 +0.3 ppts 21.1 +0.2 ppts
35. Sandoz International
Q3 2016 growth drivers
3rd party sales in USD million at actual rates
Our growth is driven by key markets
across regions
35
134
92
197
383
706
954
CEE & MEA
Western Europe
LatAm
APAC
North America
Total Sandoz 2,517
Anti-Infectives
-3%
+3%
+4%
-3%
+10%
-14%
-1%
Variance cc
Vs PY Q3
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1 US Q3 sales were -4% in Q3; CEE Q3 sales only were USD 276m (+9%); total Anti-Infectives sales,
including FDF sales under Sandoz name, were USD 339m (-2%).
36. Sandoz International
Biopharma1 is a major growth driver,
on track for USD 1 bn sales in 2016
Business Use Only36
2
3
5
0
5
10
15
20
25
0 2 4 6 8 10 12
Months after launch
Zarxio
1. Biopharmaceuticals include biosimilars, biopharmaceutical contract manufacturing and Glatopa®
2. Ahead of Teva’s Granix® at same point in time post-launch. Third party data underestimates penetration due to gaps in coverage.
3. Share of 20mg glatiramer acetate market, based on volume and including customers not reported by IMS. Source: Sandoz, IMS NPA.
0
5
10
15
20
25
0 2 4 6 8 10 12
Granix
(Teva)
• Approx. 50% of annual
sales will be from US
• Zarxio® US exceeded
USD 100m since launch
Glatopa® approx. 40%
market share3
Market share filgrastim US1, %
Zarxio
37. Sandoz International
Molecule Agency Status
FDA Approved
EMA File accepted
FDA File accepted
EMA File accepted
EMA File accepted
FDA File pending
EMA File pending
FDA File pending
EMA File pending
FDA approved etanercept in August
as second Sandoz US biosimilar
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5
Committed to launching
major biosimilars in EU
and US by 2020
All trademarks are the property of their owner
38. Sandoz International
Market set for dramatic expansion,
driven by US and immunology
Business Use Only38
1. Compound Annual Growth Rate
2. Source: EvaluatePharma, IMS, Market Reports, Sandoz
2013 2015 2020
Biosimilar market by geography
USD billion
EU US Rest of world
+35%
2013 2015 2020
Biosimilar market by segment
USD billion
Insulins Oncology
EPO, G-CSF, hGH Immunology
Other
+142%
0.7 1
+35%
14
+62% +35%
N/A
+92%
CAGR1
2015-20
0.7 1
+62%
14
CAGR1
2015-20
+50%
+50%
+90%
2
39. Sandoz International
Biosimilar competitive environment is
dynamic – not all will stay the course
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Evolution of competitive landscape
Before 2015 2015 and after Key competitors are
partnering for:
• Commercial
capabilities
• Generic
capabilities
• Financial
resources
• Clinical expertise
• Manufacturing
networksOther
competitors
41. Sandoz International
Our leading antibiotics business is
our largest global franchise
Business Use Only41
90 million
patients1
in 130 countries
around the world1
are treated with
Sandoz antibiotics
1. 2015 data
42. Sandoz International
• Biochemie founded in Kundl, Austria, in
1946 to produce and supply penicillin
for the Austrian population. The
research team achieves domestic
production of penicillin in 1948.
• In 1951 two researchers at Biochemie,
Brandl and Margreiter, break new
ground by discovering Pen V, the first
oral penicillin
• Sandoz Ltd. acquires Biochemie in
1963, representing the beginning of
large-scale production of antibiotics
• Sandoz is still the biggest producer of
Penicillin V in the world
We pioneered the use of quality
antibiotics after World War 2 ...
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43. Sandoz International
... and have continued leading the
way ever since
Business Use Only43
1946
Foundation Biochemie
1948
Penicillin production starts
1951
Discovery of Pen V, first
oral penicillin
2002
Sandoz acquires Lek
Pharmaceuticals, Slovenia’s
largest pharmaceutical company
with a strong presence in Central
and Eastern Europe
2002
Launch of co-amoxiclav in US
1880 ... 1950 1960 1970 1980 1990 2000 2010 2020
1886
Dr. Alfred Kern and Edouard
Sandoz set up The Chemical
Company Kern & Sandoz in Basel
1895
Production of the first
pharmaceutical substance,
antipyrine, a fever-controlling agent
1963
Sandoz acquires
Biochemie and begins
the large-production of
antibiotics
2013
Sandoz opened new facilities
in Kundl, Austria, further
expanding the production of
sterile penicillin
1992
Launch of amoxicillin
clavulanate potassium
in Europe
1982
Construction of
Lendava (API
production site)
1989
Acquisition of Les
Franqueses (API
production site)
2003
Acquisition of Palafolls
API production plant
130 years of
pharmaceutical
experience
70 years of
experience in
antibiotics
1st to discover
the oral form
of Pen V 65
years ago
24 years since
Sandoz first
launched amoxi-
clavulanic
44. Sandoz International
We partner with global NGOs to
ensure supply to patients worldwide
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• Sandoz is committed to expanding
access to more products in the portfolio
‒ Top products procured include Amoxicillin
DT and Amoxicillin trihydrate/Potassium
Clavulanate POS
• Sandoz is committed to making its
pediatric Amoxicillin treatment available
to developing countries; to date, 500 000
treatment courses have been delivered
to UNICEF. This commitment supports
the UN Commission on Life-Saving
Commodities for Women and Children,
which has called for an increase in the
production, distribution, and promotion
of amoxicillin dispersible tablets