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AI(in technical terms a transformer)
What if...
would automatically summarize the
Novartis Annual Results 2020
presented by Vas Narasimhan?
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2. www.konfuzio.com
AI summarized the transcript
2
novartis.com/investors 1,264 words in 139 words
I would now like to turn the presentation over to Vas
Narasimhan. Good day, everyone, and thanks for
joining. Novartis has been executing on a strategy
we set out in 2018 to focus the company. We're
making good progress, always more to do, always
things to learn. Here’s how the strategy has
translated into operational performance: Entresto
and Cosentyx showed double-digit growth in Q4.
Sales of Zolgensma in full year were USD 920
million. Sales in first half of 2021 expected to be
lower than first half of 2019. The short-term impact
of capecitabine on amputations is modest. We are
working with the FDA to finalize the design of a
pivotal confirmatory study. We are on the right track
to reach our goals in China. We remain determined
to build a business that can grow mid-single-digit.
Thank you very much, and good morning and good afternoon to everybody, and thank you for taking the time to join us on this Q4 Full Year Results Presentation. The
information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual
results to be materially different from any future results, performance or achievements expressed or implied by such statements. Please refer to the company's Form
20-F on file with the US Securities and Exchange Commission for a description of some of these factors. And thank you again for joining us, and I'll hand across to Vas
Narasimhan.
Thank you, Samir. And I also wanted to say thank you all for joining today's conference call. If we move to Slide 3. With me today, I have a number of my ECN
colleagues. Harry, Susanne, Marie-France, John Tsai, Richard and Shannon, and will be available to take your questions and also will be joining me for parts of the
presentation.
So if we move to Slide 5. Over the past 3 years, we've been executing on a strategy we set out in 2018 to focus the company, focus on certain geographies to
accelerate our growth and to focus on 5 strategic priorities that we remain committed to and believe in the long run will enable Novartis to sustainably grow and
sustainably have impact on health care around the world and deliver on our purpose to reimagine medicine.
Then when you look at some of the proof points. As we've set out on this journey, we believe we're making good progress. Always more to do, always things to learn,
but we're making good progress. We're 100% focused now as a medicines company. We have a leading pipeline across 10 therapeutic areas, 4 advanced therapy
platforms, unique in that having only 8% of our sales in 1 product and over 15 blockbusters. We've achieved USD 2 billion in cost savings over the last 3 years. A
leading data science platform that's enabling us to weather this pandemic and, I believe, sets us up for the medium and long term. Consistently improving ESG scores,
now with sector-leading performance in 4 key indices. And from a culture standpoint, record-high engagement scores across multiple different measures.
Now moving to Slide 6. When you look at how the strategy has translated into operational performance, we see solid operational performance over the past 3 years,
with sales growing 5% from USD 42 billion now to approaching USD 49 billion. Core op inc growing double-digit at 10%, exceeding now USD 15 billion. And we've
reached our goal – our initial goal of Innovative Medicines core margin to 35%, on our way to our midterm goal of the high 30s, which we are well on track to achieve.
Now turning to this year's performance – sorry, the 2020 performance and Q4 performance. On Slide 7, you can see a breakdown of some of the key drivers. As you
saw in our release, net sales for the full year were up 3% and core operating income up 13%. Our overall performance in Q4 as well as the full year were driven by our
key growth drivers, Entresto® and Cosentyx®, continuing to demonstrate double-digit growth, a broad range of oncology medicines also demonstrating double-digit
growth. And taken together, we now have over half of our sales coming from our key growth drivers and launches in Innovative Medicines, positioning us well for the
future and positioning us well to overcome the patent expiries we have in this period and continue to drive growth through 2025 and beyond.
Now moving to Slide 8. I wanted to dive into a few of the products and Sandoz before turning it over to my colleagues. First, on Zolgensma®. Full year sales were USD
920 million in the first full year since launch. The medicine is now registered in 37 countries. We're making very good progress in the rollout of this medicine around the
world.
As you saw in Q4, we had sales of USD 254 million, which were lower than Q3. This was driven primarily by COVID-19-related impact, delaying new starts as hospitals
faced disruption and we saw physicians delaying starts or switches to the product, as well as delays in reimbursement decisions in some of the European and emerging
markets we're currently working with. We expect this impact to continue through the first half of 2021, where we would expect sales in that Q3/Q4 range before an
acceleration in the second half of the year.
But we remain confident in the longer-term potential of the medicine in the IV form to reach ultimately USD 2 billion. It remains the treatment of choice for newly
diagnosed patients. We're seeing about 15% of patients in the EU in the older than 2 year age range. We're on our way to get access in 9 EU countries, which would be
about 25% of the population. And we have important formal reimbursement decisions in 15 countries over the coming year to 2 years. So taken together, we think we're
on the right track.When you look at the IT program, we continue to await the animal data, which we expect to have in the middle of this year to the back half of this year,
to remove the partial clinical hold if the data is – confirms the safety profile. We are working with the FDA to finalize the design of a pivotal confirmatory study, which we
would then rapidly plan on implementing. We continue to progress our 10 early stage programs in gene therapies with 2 INDs and clinical trial starts planned in
2021.Now moving to Slide 9. I also wanted to say a word regarding our performance in China. Now as you saw in our release, we were very pleased with our growth in
China, with sales growing 16%, second-fastest amongst multinationals in China. Our goal is to double our sales in the country by 2024, making China the
second-largest market for Novartis in the world. Our key growth drivers, similar to what we see in other geographies, are Entresto®, Cosentyx® as well as our other
oncology strategic brands. What's very notable, I think, is the number of NRDL listings we achieved, we believe the highest in the industry in 2020. We also have a rich
pipeline with 7 approvals expected in 2021. So taken together, we think we're on the right track to reach our goals in China and really continue to drive dynamic growth
in this important market.Now moving to Slide 10. With respect to Sandoz, you saw in the full year, Sandoz met the sales guidance, largely in line for the full year and the
quarter. Importantly, Sandoz was able to drive 15% core operating income growth, moving its core margin up to 24.2%. Some of the pushes and pulls for Sandoz are:
Continued strong Biopharmaceuticals performance with 19% growth, primarily in the European market; but also held back a bit by our retail declines we saw driven by
COVID-19 and the US oral solids business that we now retain. I think, taking a longer-term view on Sandoz, we remain determined to build a business that can grow
mid-single-digit with margins in the mid- to high 20s, really competitive with the top end of the peer set. And we expect to be able to do that through a robust biosimilars
pipeline as well as high LOE coverage amongst small molecules through the 2024 period.
AI

3. www.konfuzio.com
Original Transcript
(Operator Instructions) Good morning, and good afternoon, and welcome
to the Novartis Q4 and Full Year 2020 Results Release Conference Call
and Live Audio Webcast. The conference is being recorded. A recording
of the conference call, including the Q&A session, will be available on our
website shortly after the call ends. With that, I would like to hand over to
Mr. Samir Shah, Global Head of Investor Relations. Please go ahead, sir.
3
Slide 1
AI Summary:
I would now like to turn the
conference over to Samir Shah,
Global Head of Investor
Relations.

4. www.konfuzio.com
Original Transcript
Thank you very much, and good morning and good afternoon to
everybody, and thank you for taking the time to join us on this Q4 Full
Year Results Presentation. The information presented today contains
forward-looking statements that involve known and unknown risks,
uncertainties and other factors. These may cause actual results to be
materially different from any future results, performance or achievements
expressed or implied by such statements. Please refer to the company's
Form 20-F on file with the US Securities and Exchange Commission for a
description of some of these factors. And thank you again for joining us,
and I'll hand across to Vas Narasimhan.
4
Slide 2
AI Summary:
I would now like to turn the
presentation over to Vas
Narasimhan.

5. www.konfuzio.com
Original Transcript
Thank you, Samir. And I also wanted to say thank you all for joining
today's conference call. If we move to Slide 3. With me today, I have a
number of my ECN colleagues. Harry, Susanne, Marie-France, John
Tsai, Richard and Shannon, and will be available to take your questions
and also will be joining me for parts of the presentation.
5
Slide 3 + 4
AI Summary:
Good day, everyone, and
thanks for joining.

6. www.konfuzio.com
Original Transcript
So if we move to Slide 5. Over the past 3 years, we've been executing on a strategy we set out in
2018 to focus the company, focus on certain geographies to accelerate our growth and to focus
on 5 strategic priorities that we remain committed to and believe in the long run will enable
Novartis to sustainably grow and sustainably have impact on health care around the world and
deliver on our purpose to reimagine medicine.Then when you look at some of the proof points. As
we've set out on this journey, we believe we're making good progress. Always more to do, always
things to learn, but we're making good progress. We're 100% focused now as a medicines
company. We have a leading pipeline across 10 therapeutic areas, 4 advanced therapy platforms,
unique in that having only 8% of our sales in 1 product and over 15 blockbusters. We've achieved
USD 2 billion in cost savings over the last 3 years. A leading data science platform that's enabling
us to weather this pandemic and, I believe, sets us up for the medium and long term. Consistently
improving ESG scores, now with sector-leading performance in 4 key indices. And from a culture
standpoint, record-high engagement scores across multiple different measures.
6
Slide 5
AI Summary:
Novartis has been executing on a
strategy we set out in 2018 to focus
the company. CEO: We're making
good progress, always more to do,
always things to learn.

7. www.konfuzio.com
Original Transcript
Now moving to Slide 6. When you look at how the strategy has translated
into operational performance, we see solid operational performance over
the past 3 years, with sales growing 5% from USD 42 billion now to
approaching USD 49 billion. Core op inc growing double-digit at 10%,
exceeding now USD 15 billion. And we've reached our goal – our initial
goal of Innovative Medicines core margin to 35%, on our way to our
midterm goal of the high 30s, which we are well on track to achieve.
7
Slide 6
AI Summary:
Here’s how the strategy has
translated into operational
performance.

8. www.konfuzio.com
Original Transcript
Now turning to this year's performance – sorry, the 2020 performance
and Q4 performance. On Slide 7, you can see a breakdown of some of
the key drivers. As you saw in our release, net sales for the full year were
up 3% and core operating income up 13%. Our overall performance in
Q4 as well as the full year were driven by our key growth drivers,
Entresto® and Cosentyx®, continuing to demonstrate double-digit
growth, a broad range of oncology medicines also demonstrating
double-digit growth. And taken together, we now have over half of our
sales coming from our key growth drivers and launches in Innovative
Medicines, positioning us well for the future and positioning us well to
overcome the patent expiries we have in this period and continue to drive
growth through 2025 and beyond.
8
Slide 7
AI Summary:
Entresto and Cosentyx showed
double-digit growth in Q4.

9. www.konfuzio.com
Original Transcript
Now moving to Slide 8. I wanted to dive into a few of the products and Sandoz before turning it
over to my colleagues. First, on Zolgensma®. Full year sales were USD 920 million in the first full
year since launch. The medicine is now registered in 37 countries. We're making very good
progress in the rollout of this medicine around the world. As you saw in Q4, we had sales of USD
254 million, which were lower than Q3. This was driven primarily by COVID-19-related impact,
delaying new starts as hospitals faced disruption and we saw physicians delaying starts or
switches to the product, as well as delays in reimbursement decisions in some of the European
and emerging markets we're currently working with. We expect this impact to continue through
the first half of 2021, where we would expect sales in that Q3/Q4 range before an acceleration in
the second half of the year. But we remain confident in the longer-term potential of the medicine
in the IV form to reach ultimately USD 2 billion. It remains the treatment of choice for newly
diagnosed patients. We're seeing about 15% of patients in the EU in the older than 2 year age
range. We're on our way to get access in 9 EU countries, which would be about 25% of the
population. And we have important formal reimbursement decisions in 15 countries over the
coming year to 2 years. So taken together, we think we're on the right track. Then you look at the
IT program, we continue to await the animal data, which we expect to have in the middle of this
year to the back half of this year, to remove the partial clinical hold if the data is – confirms the
safety profile. We are working with the FDA to finalize the design of a pivotal confirmatory study,
which we would then rapidly plan on implementing. We continue to progress our 10 early stage
programs in gene therapies with 2 INDs and clinical trial starts planned in 2021.
9
Slide 8
AI Summary:
Sales of Zolgensma in full year were USD
920 million. Sales in first half of 2021
expected to be lower than first half of 2019.
The short-term impact of capecitabine on
amputations is modest. We are working
with the FDA to finalize the design of a
pivotal confirmatory study.

10. www.konfuzio.com
Original Transcript
Now moving to Slide 9. I also wanted to say a word regarding our
performance in China. Now as you saw in our release, we were very
pleased with our growth in China, with sales growing 16%,
second-fastest amongst multinationals in China. Our goal is to double our
sales in the country by 2024, making China the second-largest market for
Novartis in the world. Our key growth drivers, similar to what we see in
other geographies, are Entresto®, Cosentyx® as well as our other
oncology strategic brands. What's very notable, I think, is the number of
NRDL listings we achieved, we believe the highest in the industry in
2020. We also have a rich pipeline with 7 approvals expected in 2021. So
taken together, we think we're on the right track to reach our goals in
China and really continue to drive dynamic growth in this important
market.
10
Slide 9
AI Summary:
CEO: We are on the right track
to reach our goals in China

11. www.konfuzio.com
Original Transcript
Now moving to Slide 10. With respect to Sandoz, you saw in the full year,
Sandoz met the sales guidance, largely in line for the full year and the
quarter. Importantly, Sandoz was able to drive 15% core operating
income growth, moving its core margin up to 24.2%. Some of the pushes
and pulls for Sandoz are: Continued strong Biopharmaceuticals
performance with 19% growth, primarily in the European market; but also
held back a bit by our retail declines we saw driven by COVID-19 and the
US oral solids business that we now retain. I think, taking a longer-term
view on Sandoz, we remain determined to build a business that can grow
mid-single-digit with margins in the mid- to high 20s, really competitive
with the top end of the peer set. And we expect to be able to do that
through a robust biosimilars pipeline as well as high LOE coverage
amongst small molecules through the 2024 period.
11
Slide 10
AI Summary:
CEO: We remain determined to
build a business that can grow
mid-single-digit.

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