Novartis provides update on development status of NKS104

Basel, December 16, 2005 - Novartis has decided to stop the development of NKS104 (pitavastatin), a lipid-lowering agent in Phase II for the treatment of elevated total cholesterol, after data from recent investigational trials showed the compound was no longer competitive enough for Novartis to invest further resources. The company intends to seek licensing partners for this compound.

As a result, Novartis intends to record an impairment of USD 266 million in the fourth quarter of 2005 to fully write off the remaining value of this asset. The European rights to this compound were acquired under a licensing agreement from Kowa. Novartis already recorded an impairment of USD 66 million in the third quarter related to the acquired and capitalized marketing rights for NKS104

Despite these charges, and barring unforeseen events, Novartis expects to report record Group operating and net income for the full year based on the continued favorable business developments in 2005.

This release contains certain forward-looking statements relating to the Group’s business, which can be identified by the use of forward-looking terminology such as “expects” or similar expressions. Such statements reflect the current views of the Group with respect to future events and are subject to certain risks, uncertainties and assumptions. In particular, management’s expectations could be affected by, among other things, unanticipated changes in the development of the business over the last fiscal quarter of 2005 and other risks and factors referred to in the Group’s current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. 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 contained in this press release as a result of new information, future events or otherwise.



About Novartis
Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2004, the Group’s businesses achieved sales of USD 28.2 billion and pro forma net income of USD 5.6 billion. The Group invested approximately USD 4.1 billion in R&D. Headquartered in Basel, Switzerland. Novartis Group companies employ about 91,700 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.

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John Gilardi

Novartis AG

Novartis Global Media Relations

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