On April 19, 2018 Bio-Path Holdings, Inc., (NASDAQ: BPTH), a biotechnology company leveraging its proprietary DNAbilize antisense RNAi nanoparticle technology to develop a portfolio of targeted nucleic acid cancer drugs, reported that data from pre-clinical studies supporting the potential of prexigebersen (BP1001, liposomal Grb2 antisense), in the treatment of solid tumors in gynecologic malignancies were presented in a poster at the annual meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper), which took place in Chicago, IL (Press release, Bio-Path Holdings, APR 19, 2018, View Source [SID1234525544]).

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The poster titled, "Grabbing GRB2: The use of Liposome-incorporated Grb2 antisense oligonucleotides as a novel therapy in gynecologic malignancies," was presented by Olivia D. Lara, M.D., University of Texas MD Anderson Cancer Center, Department of Gynecologic Oncology during the Experimental and Molecular Therapeutics Poster Session. The data summarize results from studies investigating the expression of GRB2 in a series of in vitro experiments in high-grade serous (HGSC) and uterine (UC) carcinoma models. The study also examined the biological effects of prexigebersen in HGSC mice models (OVCAR 5), first in a dose-defining experiment then in combination with standard dose paclitaxel.

The data showed there was an eighty-six percent (86%) decrease in tumor burden (p<0.05), and multinodular burden (p<0.01) in the combination prexigebersen/paclitaxel group compared to control. In addition, there was no apparent toxicity with mice on combination therapy losing less weight than the paclitaxel-only group (P = 0.005).

"We are delighted to present these very encouraging findings at this year’s AACR (Free AACR Whitepaper) before an audience of the world’s leading cancer researchers and clinicians," stated Peter H. Nielsen, chief executive officer of Bio-Path Holdings. "Our research continues to suggest that prexigebersen-based combination therapy may offer an attractive method for targeting solid tumors and these findings establish the GRB2/GAB2 complex as an important target for prexigebersen. We look forward to advancing this promising therapy in gynecologic and other solid tumor cancers and plan to initiate first-in-human studies as early as the end of this year."

Shire notes the announcement made by Takeda (Press release, Shire, APR 19, 2018, View Source [SID1234525813]). The Board of Shire (the "Board") confirms that it has received three conditional proposals from Takeda regarding a possible offer for the Company, on 29 March 2018 (the "First Proposal"), 11 April 2018 (the "Second Proposal") and 13 April 2018 (the "Third Proposal").

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The First Proposal comprised £28 per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £16 per share in cash, representing a potential value of £44 per share and approximately £41 billion for the total issued and to be issued share capital of the Company. Based on Takeda’s current market capitalisation, Shire shareholders would own approximately 50 per cent. of the enlarged Takeda.

Following a thorough review of the First Proposal with its advisers and a Board meeting on 8 April 2018, the Board unanimously rejected the First Proposal, concluding that it significantly undervalued the Company, its growth prospects and pipeline.

The Board has since received two further proposals:

·the Second Proposal comprised £28.75 per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £16.75 per share in cash, representing a potential value of £45.50 per share, only a marginal increase to the First Proposal, and approximately £43 billion for the total issued and to be issued share capital of the Company. Based on Takeda’s current market capitalisation, Shire shareholders would own approximately 51 per cent. of the enlarged Takeda; and

·the Third Proposal also comprised £28.75 per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £17.75 per share in cash, representing a potential value of £46.50 per share and approximately £44 billion for the total issued and to be issued share capital of the Company. Based on Takeda’s current market capitalisation, Shire shareholders would own approximately 51 per cent. of the enlarged Takeda.

The Board met again and thoroughly considered the Third Proposal with its advisers and unanimously rejected it, concluding that it continues to significantly undervalue the Company and Shire’s growth prospects and pipeline.

Following the Board meeting on 14 April 2018 which rejected the Third Proposal, at the Board’s request Shire’s advisers entered into a dialogue with Takeda’s advisers to discuss whether a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made.

The Board and management of Shire remain committed to enhancing shareholder value and are focused on fully evaluating internal and external opportunities to maximise value for shareholders, including any further proposals from Takeda.

Person responsible

Stephen Williams, Deputy Company Secretary, is responsible for arranging the release of this announcement on behalf of the Company.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Shire’s website at www.shire.com by no later than noon (London time) on the business day following this announcement. The content of this website is not incorporated into and does not form part of this announcement.

Further information

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Citigroup Global Markets Limited, which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and shall not be responsible to anyone other than Shire for providing the protections afforded to clients of Citigroup Global Markets Limited, or for giving advice in connection with the matters described in this announcement or any matter referred to therein.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Shire for providing the protections afforded to clients of Goldman Sachs International, or for giving advice in connection with the matters described in this announcement or any matter referred to herein.

Morgan Stanley & Co. International plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Shire for providing the protections afforded to clients of Morgan Stanley & Co. International plc, or for giving advice in connection with the matters described in this announcement or any matter referred to herein.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel’s website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

On April 19,2018 Novartis reported the appointment of John Tsai, M.D. as Head of Global Drug Development (GDD) and Chief Medical Officer (Press release, Novartis, APR 19, 2018, View Source [SID1234525524]). Dr. Tsai will join Novartis on May 1, 2018, and will be based in Basel, Switzerland. He will report to Vas Narasimhan, M.D., CEO of Novartis and will become a member of the Executive Committee of Novartis (ECN). He succeeds Dr. Narasimhan who became CEO of Novartis on February 1, 2018. Dr. Rob Kowalski, who led GDD ad interim since February 1, 2018, will resume his responsibilities as Head of Global Regulatory Affairs for GDD.

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Dr. Tsai has been Chief Medical Officer and Senior Vice President of Global Medical at Amgen Inc., since May 2017 and oversees all clinical and medical functions across multiple sites worldwide. At Novartis, he will be responsible for advancing the company’s industry-leading pipeline of innovative medicines and biosimilars. Dr. Tsai will also lead the GDD organization’s ongoing transformation embracing the power of advanced data sciences and digital technologies to create a more agile model for drug development.

"I am delighted to welcome John to Novartis," said Dr. Narasimhan. "As we continue to reimagine drug development, his expertise across multiple therapeutic areas, including cardiovascular, oncology and neuroscience combined with his background in electrical engineering will be a source of great strength for Novartis. John has a great track record in nurturing talent across clinical development, medical affairs and development operations and shares our commitment to build an empowered and inspired organization. I also want to express my sincere gratitude to Rob Kowalski for his excellent ad interim leadership of the GDD organization."

Dr. Tsai said: "I feel honored to have the opportunity to lead the Novartis Global Drug Development organization and do my part in bringing forward the company’s strong pipeline of medicines that address some of humanity’s biggest health challenges. I am also excited to work with my colleagues at Novartis to pioneer novel paradigms for drug development with data and digital technologies at the core."

Prior to joining Amgen, Dr. Tsai spent eleven years with Bristol-Myers Squibb (BMS), where he served as Global Head of Clinical Development for marketed products and global clinical operations. He also played a leadership role in advancing the company’s late-stage pipeline across multiple therapeutic areas including cardiovascular, oncology and neuroscience. As the company’s Chief Medical Officer, Europe and prior to that, as Head of U.S. Medical and Vice President of Cardiovascular Medical, Dr.Tsai played a critical role in driving multiple transformation initiatives within the development and medical organizations. Before joining BMS, he was a cardiovascular group leader at Pfizer where he led the strategy development and execution of over 26 pivotal trials for a major cardiovascular medicine. He started his career at GE as an electrical engineer before returning to school to study medicine.

Dr. Tsai holds a medical degree from the University of Louisville School of Medicine and a Bachelor of Science in Electrical Engineering from Washington University in St. Louis. He completed his residency at Kaiser Permanente in San Francisco, California, where he then served as a physician in internal medicine, Chief Resident and as a member of the hospital’s faculty.

Disclaimer
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "will," "pipeline," "ongoing," "to create," "continue," "commitment," "opportunity," "excited," "to pioneer," or similar expressions, 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 express or regarding potential future sales or earnings of the Novartis Group. You should not place undue reliance on these statements. Such forward looking statements are based on our current beliefs and expectations 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 Novartis will be commercially successful in the future, or achieve any particular financial results. In particular, our expectations could be affected by, among other things: regulatory actions or delays or government regulation generally; the potential that the strategic benefits, synergies or opportunities expected from the significant reorganizations of recent years may not be realized or may take longer to realize than expected; the uncertainties inherent in the research and development of new healthcare products; our ability to obtain or maintain proprietary intellectual property protection on key products; safety, quality or manufacturing issues; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures; uncertainties regarding actual or potential legal proceedings; 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 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.

On April 19, 2018 The U.S. Food and Drug Administration (FDA) approved AstraZeneca’s Tagrisso (osimertinib) for the first-line treatment of patients with metastatic non-small cell lung cancer (NSCLC) in tumors with epidermal growth factor receptor (EGFR) mutations (Press release, BioSpace, APR 19, 2018, View Source [SID1234525545]).

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The mutations, exon 19 deletions or exon 21 L858R mutations, will be detected by an FDA-approved test. The decision was based on data form the Phase III FLAURA clinical trial. Results were presented at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2017 Congress and published in the New England Journal of Medicine.

The FLAURA trial compared Tagrisso to current first-line EGFR tyrosine kinase inhibitors, erlotinib or gefitinib, in patients who had not received previous treatment for locally-advanced or metastatic EGFR-mutation NSCLC. It met the primary endpoint of progression-free survival, and were consistent across all pre-specified patient subgroups.

Patients receiving Tagrisso had about 18.9 months on average before the disease got worse compared to 10.2 months for patients receiving traditional treatments.

Tagrisso is a third-generation, irreversible EGFR-TKI designed to inhibit both EGFR-sensitizing and EGFR T790M-resistance mutations, with clinical activity against central nervous system cancers. It has been approved in the U.S. and Brazil for first-line EGFRm advanced NSCLC, and in more than 75 countries, including the U.S., Europe, Japan and China, for patients with EGFR T790M mutation-positive advanced NSCLC. It is also being evaluated as an adjuvant and in combination with other treatments.

It has also been approved in the U.S. for second-line treatment of patients with metastatic EGFRm NSCLC, whose disease has on or after a first-line EGFR-TKI round of therapy and who have developed the secondary T790 mutation. The drug received both Breakthrough Therapy and Priority Review designations from the FDA in 2017 for the first-line setting.

"Today’s FDA approval of Tagrisso in the first-line setting is an exciting milestone for patients and our company," said Dave Fredrickson, executive vice president, Head of the Oncology Business Unit at AstraZeneca, in a statement. "Tagrisso delivered unprecedented median progression-free survival data across all pre-specified patient subgroups, including patients with or without CNS metastases, and could prolong the lives of more patients without their tumors growing or spreading."

The drug is being evaluated in Europe and Japan as a first-line treatment, with regulatory decisions expected in the second half of this year. AstraZeneca has projected that Tagrisso could, at its peak, bring in $4 billion per year.

Lung cancer accounts for about one-fifth of all cancer deaths, more than breast, prostate and colorectal cancers combined. It is the leading cause of cancer death for both men and women. About 10 to 15 percent of patients in the U.S. and Europe and about 30 to 40 percent in Asia, have EGFRm NSCLC. They are especially sensitive to EGFR-TKI treatments, but those cancers typically develop resistance to that treatment, leading to disease progression.

"The approval of osimertinib in the first-line setting represents a major advance in the treatment of patients with EGFR mutations and a significant change in the treatment paradigm," stated Suresh Ramalingam, principal investigator of the FLRUA trial, a researcher with the Winship Cancer Institute of Emory University in Atlanta. "Osimertinib provides robust improvements in progression-free survival with no unexpected safety signals compared to the previous generation of EGFR inhibitors."

Commenting on the results, Vas Narasimhan, CEO of Novartis, said (Press release, Novartis, APR 19, 2018, View Source [SID1234525814]):

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"We continued our transformation this quarter to become a more focused medicines company. We expect the proposed sale of the OTC JV stake, the acquisition of AAA and the proposed acquisition of AveXis to provide significant sales, return on capital, and innovative R&D platforms that will strengthen our pipeline. Operationally, we drove solid growth across all financial metrics, strong performance across our key growth brands, and continued Alcon’s strong recovery."

GROUP REVIEW

First quarter financials

Net sales were USD 12.7 billion (+10%, +4% cc) in the first quarter, as volume growth of 9 percentage points (cc), including growth from Cosentyx and Entresto, was partly offset by the negative impacts of pricing (-3 percentage points) and generic competition (-2 percentage points).

Operating income was USD 2.4 billion (+27%, +17% cc) mainly driven by higher sales and lower net impairments partly offset by higher growth investments. Core adjustments amounted to USD 0.9 billion (2017: USD 1.1 billion).

Net income was USD 2.0 billion (+22%, +12% cc), driven by the strong operating income partially offset by lower income from associated companies.

EPS was USD 0.87 (+24%, +14% cc), driven by growth in net income and the lower number of shares outstanding.

Core operating income was USD 3.3 billion (+11%, +4% cc) as higher sales more than offset growth investments and Gleevec/Glivec generic erosion. Core operating income margin in constant currencies decreased 0.1 percentage points; currency had a positive impact of 0.3 percentage points, resulting in a net increase of 0.2 percentage points to 26.3% of net sales.

Core net income was USD 3.0 billion (+11%, +4% cc) driven by growth in core operating income.

Core EPS was USD 1.28 (+13%, +6% cc), driven by growth in core net income and the lower number of shares outstanding.

Free cash flow amounted to USD 1.9 billion (+15% USD) compared to USD 1.7 billion in the prior year, mainly driven by higher cash flows from operating activities, partly offset by higher investments in intangible assets.

Innovative Medicines net sales were USD 8.4 billion (+12%, +6% cc) in the first quarter. Volume contributed 11 percentage points to sales growth, including Cosentyx and Entresto. Generic competition had a negative impact of 3 percentage points largely due to Gleevec/Glivec in the US and Europe and Ophthalmology. Pricing had a negative impact of 2 percentage points.

Operating income was USD 2.1 billion (+27%, +18% cc), mainly driven by higher sales and lower net impairment charges, partly offset by growth investments mainly for Cosentyx and Kisqali as well as for China field force expansion, and Gleevec/Glivec generic erosion. Core adjustments were USD 0.5 billion (2017: USD 0.7 billion). Core operating income was USD 2.6 billion (+12%, +4% cc). Core operating income margin in constant currencies decreased by 0.3 percentage points; currency had a positive impact of 0.3 percentage points, resulting in a margin of 31.3% of net sales, in line with prior year.

Sandoz net sales were USD 2.5 billion (+4%, -4% cc) in the first quarter as 6 percentage points of price erosion, mainly in the US, was partly offset by volume growth of 2 percentage points. US sales declined 18% mainly due to continued competitive pressure. Excluding the US, net sales grew by 5% (cc). Global Biopharmaceuticals grew 13% (cc) mainly driven by Rixathon (rituximab) and Erelzi (etanercept) sales in Europe.

Operating income was USD 409 million (+19%, +8% cc) mainly driven by continued gross margin improvement and gains from the divestment of non-strategic assets partly offset by higher growth investments in ex-US markets. Core operating income was USD 499 million (+8%, +1% cc). Core

2

operating income margin in constant currencies increased 1.0 percentage point; currency had a negative impact of 0.1 percentage points, resulting in a net increase of 0.9 percentage points to 19.8% of net sales.

Alcon net sales were USD 1.8 billion (+12%, +7% cc) in the first quarter, with growth in all product categories. Stock-in-trade movements accounted for approximately 1% (cc) of growth. Surgical grew +8% (cc), mainly driven by implantables, which include intraocular lenses (IOLs) and CyPass Micro Stent, and continued consumables growth. Vision Care grew +5% (cc) driven by continued double-digit growth of Dailies Total1.

Operating income was USD 90 million, compared to a loss of USD 2 million in the prior year, mainly driven by higher sales. Core operating income was USD 360 million (+40%, +29% cc). Core operating income margin in constant currencies increased by 3.4 percentage points; currency had a positive impact of 0.6 percentage points, resulting in a net increase of 4.0 percentage points to 20.2% of net sales.

The first quarter results continue to demonstrate the benefit from the actions taken as part of the turnaround plan, including improved operations, customer relationships and product launches. The strategic review is progressing, with potential action not likely before the first half of 2019.

Key growth drivers

Underpinning our financial results in the first quarter is a continued focus on key growth drivers, including Cosentyx, Entresto, Promacta/Revolade, Tafinlar + Mekinist, Gilenya, Jakavi, Kisqali, Tasigna and Kymriah as well as Biopharmaceuticals and Emerging Growth Markets.

Growth Drivers (Q1 performance)
·
Cosentyx (USD 580 million, +35% cc) showed strong volume growth across all indications and most regions. In the US, Cosentyx showed strong prescription growth, while net sales in the first quarter were impacted by destocking at the specialty pharmacy level, and rebating for enhanced access to earlier lines of therapy.
·
Entresto (USD 200 million, +126% cc) continued to deliver strong performance driven by increased adoption by physicians both in the US and rest of the world.
·
Promacta/Revolade (USD 257 million, +41% cc) grew at a strong double-digit rate across all regions due to increased demand and continued uptake of the thrombopoietin class for chronic immune thrombocytopenia.
·
Tafinlar + Mekinist (USD 267 million, +33% cc) continued strong double-digit growth across all regions due to increased demand.
·
Gilenya (USD 821 million, +8% cc), with approximately 231,000 patients treated worldwide, grew driven by stock in trade movements in the US and demand in Europe.
·
Jakavi (USD 234 million, +30% cc) showed continued double-digit growth across all regions driven by the myelofibrosis indication, and reimbursement of the second-line polycythemia vera indication in additional countries.
·
Kisqali (USD 44 million) continues to progress with growth in the US and launches in the EU.
·
Tasigna (USD 466 million, +8% cc) grew strongly in most regions.
·
Kymriah (USD 12 million) commercial launch in the US continues to progress well.
·
Biopharmaceuticals (USD 335 million, +13% cc) grew mainly driven by launches of Rixathon (rituximab) and Erelzi (etanercept) in the EU, partly offset by competition for Glatopa 20 mg.
·
Emerging Growth Markets, which comprise all markets except the US, Canada, Western Europe, Japan, Australia and New Zealand, grew (+13% USD, +8% cc) mainly driven by China (+18% cc) and Brazil (+11% cc).

3

Strengthen R&D

Innovation Review

Benefitting from our continued focus on innovation, Novartis has one of the industry’s most competitive pipelines with more than 200 projects in clinical development.

Key developments from the first quarter of 2018 include:

New approvals and regulatory opinions (in Q1)

·
Lutathera (lutetium Lu 177 dotatate) was approved by FDA for treatment of patients with somatostatin receptor positive gastroenteropancreatic neuroendocrine tumors. This treatment was part of the Advanced Accelerator Applications acquisition.

·
Tasigna (nilotinib) was approved by FDA for the treatment of first- and second-line pediatric patients one year of age or older with Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase (Ph+ CML-CP).

·
Signifor LAR (pasireotide) was approved in Japan for use in Cushing’s disease.

·
Cosentyx (secukinumab) US label was updated to include moderate-to-severe scalp psoriasis, one of the difficult-to-treat types of psoriasis.

·
Sandoz Glatopa 40 mg/mL was approved by FDA. Glatopa 40 mg/mL is a three times-a-week treatment for relapsing forms of multiple sclerosis that is a fully substitutable, AP-rated, generic version of Teva’s Copaxone (glatiramer acetate injection) 40 mg/mL. Building of inventory to support the launch started in the first quarter.

·
Sandoz proposed biosimilar infliximab (Janssen and Merck’s Remicade) received a positive CHMP opinion.

·
Sandoz Generic Advair Diskus received a complete response letter (CRL) from FDA.

Results from ongoing trials and other highlights (in Q1)

·
AveXis Inc. acquisition, if completed, would position Novartis to transform care in spinal muscular atrophy (SMA) and as a leader in gene therapy and Neuroscience. AVXS-101 has the potential to be a first-ever one-time gene replacement therapy for SMA. AveXis also offers a valuable gene therapy platform, and scalable manufacturing to accelerate potential future gene therapy programs and launches. The AveXis acquisition, announced in April, is subject to the successful completion of the tender offer and customary closing conditions.

·
Luxturna (voretigene neparvovec-rzyl), an investigational one-time gene therapy to restore functional vision, was licensed from Spark Therapeutics. Novartis will develop and commercialize the treatment outside the US; Spark Therapeutics retains US rights.

·
Kymriah ELIANA trial results were published in NEJM showing longer-term durable remissions in children and young adults with r/r ALL. An analysis of 75 patients with median follow-up of more than a year demonstrated an overall remission rate of 81%. Kymriah was detected in patients up to 20 months following administration, demonstrating long-term persistence.

·
Cosentyx continues to build on its strong efficacy profile. The SCULPTURE study showed two thirds of patients reported no impact of skin disease on their quality of life over 5 years. The SCALP study data presented at AAD showed that a majority of patients with scalp psoriasis on Cosentyx achieved clear skin (PSSI 90) at Weeks 12 and 24 and improved quality of life.

·
Entresto (sacubitril/valsartan) post-hoc analysis of PARADIGM-HF published in JAMA Cardiology shows heart failure patients treated with Entresto experienced significant improvements in physical and social activities, particularly in intimate/sexual relationships and household chores, compared to those taking enalapril. Benefits were seen within eight months and persisted during the three-year follow up period.

4

·
BAF312 (siponimod) EXPAND publication in The Lancet showed typical SPMS patients taking siponimod had significant reductions in the risk of three- and six-month confirmed disability progression versus placebo and favorable outcomes in other relevant measures of MS disease activity. Novartis has initiated the submission of siponimod for US approval in SPMS and plans to launch in first half 2019. Filing for EU approval is planned to follow later in 2018.

·
RTH258 (brolucizumab) Phase III data were presented at the 41st Annual Macula Society Meeting. These data showed that Q12 brolucizumab was non-inferior to Q8 aflibercept in a pre-specified secondary endpoint of change in best-corrected visual acuity from baseline, averaged over weeks 36 to 48. Additional brolucizumab data from the trials will be presented at the Association for Research in Vision and Ophthalmology (ARVO) 2018 Annual Meeting in the second quarter.

·
Xolair (omalizumab) was recommended under new global urticaria guidelines, for patients unresponsive to antihistamine. Xolair is the only licensed treatment option for Chronic Spontaneous Urticaria, a subtype of this condition.

·
Ultibro Breezhaler showed significant improvements in cardiac and lung function in COPD patients with lung hyperinflation, compared to placebo. The CLAIM study data was published in the Lancet Respiratory Medicine.

·
Pear Therapeutics and Novartis entered into an agreement to collaborate on prescription software applications aimed to treat patients with schizophrenia and MS. Pear’s prescription digital therapeutics are designed to deliver clinically-proven treatments, such as cognitive behavioral therapy, to patients through mobile and desktop applications.

·
Science 37 and Novartis expanded an alliance to advance a virtual clinical trials program. The virtual trials model aims to make studies more accessible, opening up participation for remote or underserved communities while helping advance the development of innovative medicines.

5

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.

In the first quarter of 2018, 14.6 million shares (USD 0.6 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. In the same quarter, Novartis bought back 1.3 million shares (USD 0.1 billion) from employees. Consequently, the total number of shares outstanding increased by 13.3 million versus December 31, 2017. These treasury share transactions resulted in a net cash inflow of USD 0.3 billion. Novartis aims to offset the dilutive impact from equity based participation plans of associates over the remainder of the year.

In the first quarter of 2018, Novartis issued a euro bond of USD 2.8 billion (notional amount EUR 2.25 billion) for general corporate purposes, including the acquisition of Advanced Accelerator Applications S.A.

As of March 31, 2018, the net debt increased by USD 8.7 billion to USD 27.7 billion versus December 31, 2017. The increase was mainly driven by the USD 7.0 billion annual dividend payment and M&A related net payments of USD 3.5 billion, partly offset by USD 1.9 billion free cash flow in the first quarter of 2018. The long-term credit rating for the company continues to be double-A (Moody’s Investors Service Aa3; S&P Global Ratings AA-; Fitch Ratings AA).

2018 Outlook

Barring unforeseen events

We confirm our outlook as presented at the beginning of 2018. Group net sales in 2018 are expected to grow low to mid single digit (cc).

From a divisional perspective, we expect net sales performance (cc) in 2018 to be as follows:
·
Innovative Medicines: grow mid single digit
·
Sandoz: broadly in line to a slight decline
·
Alcon: grow low to mid single digit

Group core operating income in 2018 is expected to grow mid to high single digit (cc).

If mid-April exchange rates prevail for the remainder of 2018, the currency impact for the year would be positive 4 percentage points on net sales and positive 4 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

The OTC JV stake is classified as an asset held for sale as of March 31, 2018. As a result, in accordance with IFRS, no income from associated companies will be recorded from the OTC JV from April 1, 2018 up to the closure of the divestment. Upon closure of the OTC JV divestiture, which is expected in the second quarter of 2018, Novartis expects to record a substantial one-time net income gain.

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 "to become," "outlooks," "momentum," "positive CHMP opinion," "expected," "on track," "potential," "strategy," "to become," "agreed to be sold," "strategic," "priorities," "Agreement to acquire," "positions," "pipeline," "subject to," "began," "expect," "if completed," "to provide," "will," "proposed," "to build," "continue," "plan," "strategic review," "progressing," "potential," "likely," "growth drivers," "clinical development," "ongoing," "if completed," "would," "platform," "to accelerate," "investigational," "initiated," "submission," "planned," "recommended," "to advance," "aims," "plans," "launch," "priority," "outlook," "launched," "priority review," "fast track," "breakthrough therapy," "filed," "filing," or similar expressions, 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; or regarding the potential outcome of the tender offer for the shares of AveXis Inc. to be commenced by Novartis, and the potential impact on Novartis of the proposed acquisition, including express or implied discussions regarding potential future sales or earnings of Novartis, and any potential strategic benefits, synergies or opportunities expected as a result of the proposed acquisition; or regarding the potential outcome of the strategic review being undertaken to maximize shareholder value of the Alcon Division; or regarding the potential financial or other impact of the significant acquisitions and reorganizations of recent years; or regarding potential future sales or earnings of the Novartis Group or any of its divisions or potential shareholder returns; 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 our current beliefs and expectations 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. Neither can there be any guarantee that the proposed tender offer or the acquisition described in this press release will be completed, or that it will be completed as currently proposed, or at any particular time. Nor can there be any guarantee that Novartis will be able to realize any of potential strategic benefits, synergies or opportunities as a result of the proposed acquisition. Nor can there be any guarantee that the strategic review being undertaken to maximize shareholder value of the Alcon Division will reach any particular results, or at any particular time, or that the result of the strategic review will in fact maximize shareholder value. 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 significant acquisitions and reorganizations of recent years. Neither can there be any guarantee that shareholders will achieve any particular level of shareholder returns. Nor can there be any guarantee that the Group, or any of its divisions, will be commercially successful in the future, or achieve any particular credit rating or financial results. In particular, our expectations could be affected by, among other things: global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures and requirements for increased pricing transparency; regulatory actions or delays or government regulation generally, including potential regulatory actions or delays relating to the completion of the potential acquisition described in this release, as well as potential regulatory actions or delays with respect to the development of the products described in this release; the potential that the strategic benefits, synergies or opportunities expected from the proposed acquisition may not be realized or may take longer to realize than expected; the successful integration of AveXis into the Novartis Group subsequent to the closing of the transaction and the timing of such integration; potential adverse reactions to the proposed transaction by customers, suppliers or strategic partners; dependence on key AveXis personnel and customers; the potential that the strategic benefits, synergies or opportunities expected from the significant acquisitions and reorganizations of recent years may not be realized or may take longer to realize than expected; the inherent uncertainties involved in predicting shareholder returns; the uncertainties inherent in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data; 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 which commenced in prior years and will continue this year; safety, quality or manufacturing issues; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes and government investigations generally; uncertainties involved in the development or adoption of potentially transformational technologies and business models; general political and economic conditions, including uncertainties regarding the effects of ongoing instability in various parts of the world; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; and uncertainties regarding potential significant breaches of data security or data privacy, or disruptions of our information technology systems; 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 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.

This announcement is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer for the shares of common stock of AveXis, Inc. described in this announcement has commenced and is being made pursuant to a tender offer statement on Schedule TO-T and related materials filed by Novartis and an indirect wholly owned subsidiary with the U.S. Securities and Exchange Commission (the "SEC"). In addition, AveXis, Inc. has filed a Schedule 14D-9 Solicitation/Recommendation Statement with the SEC. The Schedule TO Tender Offer Statement (that includes an offer to purchase, a related letter of transmittal and other offer documents) and the Schedule 14D-9 Solicitation/Recommendation Statement contain important information that should be read carefully before any decision is made with respect to the tender offer. These materials and all other documents filed by, or caused to be filed by, Novartis and an indirect wholly owned subsidiary and AveXis, Inc. with the SEC are available at no charge on the SEC’s website at www.sec.gov. The Schedule TO Tender Offer Statement and related materials also may be obtained for free under the "Investors—Financial Data" section of Novartis’s website at View Source The Schedule 14D-9 Solicitation/Recommendation Statement and such other documents also may be obtained for free from AveXis, Inc. under the "Investor + Media" section of the AveXis, Inc.’s website at View Source;p=irol-IRHome

All product names appearing in italics are trademarks owned by or licensed to Novartis Group companies. Copaxone is a registered trademark of Teva Pharmaceutical Industries Ltd. Remicade is a registered trademark of Janssen Biotech, Inc. Advair Diskus is a registered trademark of Glaxo Group Ltd. Stelara is a registered trademark of Janssen Biotech, Inc.