Novartis AG

Good morning and good afternoon and welcome to the Novartis Q1 2026 Results Release Conference Call and Live Webcast. Please note that during the presentation, all participants will be in a listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions by pressing star 1 and 1 at any time during the conference. Please limit yourselves to one question and return to the queue for any follow-ups. 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 Ms. Sloane Simpson, Head of Investor Relations.

Please go ahead, Madam. Thank you, Sharon. Good morning and good afternoon, and welcome to everyone to our Q1 2026 conference call. 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. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. Before we get started, I also want to echo Sharon. Please limit yourselves to one question at a time, and we will cycle through the queue as needed. And with that, I will hand across to Bas.

Thank you, Sloane, and thanks, everyone, for joining today's call. So if we go to slide four, as you saw this morning, we delivered a strong start to the year across our priority brands and launches, which is really where our focus is at the moment. These brands and launches are what's going to drive our mid- to long-term growth and where we believe now we have demonstrated that there's strong momentum behind these medicines. The sales for the quarter, you saw that those growth drivers were up 34% in constant currency. Our base business was largely stable, but we did see significant GX erosions as we've guided to. And Mukul will go through some of the dynamics for that over the course of the rest of the year. On core offing, we were down 14% driven by the sales decline, as well as the increased investments in R&D, which we also guided to. When you look at some of the pipeline highlights, a number of important highlights, including the continued progress for Rapsodo across a number of indications, Unalamab received a breakthrough therapy designation and priority review in Sjogren's disease, as well as a few other important milestones, which we'll go over over the course of the call. Importantly, we're maintaining our full-year sales and core operating guidance for the year. Now, moving to the next slide. When you look at those growth drivers in a little bit more detail, that 34% was driven in particular by very strong performance we saw in Cascali, Fluvicto, Casimta, Lekvio, driven by our strong launch overseas, particularly in China, and the continued performance of Semblok. So I'll look forward to going through now some of the dynamics for each of our key brands over the course of the remaining slides. Now moving to slide six, in quarter one, Kiskali grew 55%. And as you know, Kiskali now has a lot of momentum, both in early breast cancer and metastatic breast cancer. And given our global launches, we're starting to see a pickup in the ex-US markets. So focusing in on the US, you can see our NBRX share now in the early breast cancer setting is very strong, 65% plus 2% now versus prior quarter. In addition, in metastatic breast cancer, we have 47% NBRX and 41% TRX. So taken together, we're in a very strong position in metastatic and early breast cancer. And when we look at that data in more detail, we see that Kiskali has a strong position not only in the overlapping segment with our competitor in early breast cancer, but also in our unique segment, particularly the node one high risk and the node zero high risk patients. And going forward, our focus will be very much continuing to expand Kaskali's utilization in those early breast cancer populations. Now turning to the ex-US, I think one of the markets that we're keenly focused on is our performance in Germany, where we saw outstanding performance in quarter one. You can see in early breast cancer, our shares are approaching 80% now in Germany. Overall, we were growing 50% in constant currencies in the first quarter. We have continued metastatic breast cancer leadership across our key markets with 50% NBRX share. And we also see growth accelerating now as we have more EBC launches across a range of markets, 69 countries, and we're reimbursed now in 40 of those markets. Some of the other markets we were paying close attention to in the UK, we have 78% early breast cancer. And we have a strong early start in China where we do have now NRDL listing. So looking ahead, Kaskali is a brand we expect to have continued strong momentum over the course of this year. So turning to slide seven, Kasimta had also a solid quarter, 26% growth ahead of both the MS and B-cell markets. In the U.S., we saw a 21% TRX growth versus prior year. That was two points ahead of the market and 1.5 points B-cell class share increase versus prior year. Importantly, when we look at our NBRX market share, both in the overall market, we reached 17% and the B cell class, we reached 28%. So we're gaining our B cell class competitors as well as the older drugs that still nearly the majority of patients are taking in the US. Overall, we continue to see a significant runway for Kesimpta. I think a lot of that performance in the US is down to strong operational execution and We've gotten much better, I think, at targeting the right patient groups, the right physician groups, as well as honing our messaging around the unique benefits of Kesimpta as a self-administered monthly therapy. So excited about that. And we also continue to progress now our Q every two-month dose to Kesimpta, which we're looking forward to reading out next year. Now, in the ex-US setting, 31% constant currency growth, strong growth in Europe. We estimate one in six MS patients now are in Cosimta. We see 79% of patients that are coming on to Cosimta either as naive or first switch in the EU5. We also have continued NBRX leadership at nine out of 10 major markets. We do find in general outside of the US a strong interest in self-administered medicines that can get patients out of the hospital or out of needing ongoing visits for infusions. So, very amenable to the symptoms profile. And we see an opportunity for continued expansion with two-thirds of DMT-treated patients continuing to not be on a B cell therapy in our key market. Now, moving to slide eight, Fluvicto continued a strong rollout, particularly driven by the pre-taxing MCRPC setting. We saw strong demand, and we also saw good progress on our ex-US rollout. Starting with the US, we saw the US sales growth 76% in the quarter, with over 70% of that business now coming from the pre-taxing setting. And that's coming from a mix of urologists and community oncologists. Right now, we estimate about Over 60% of our NBRXs are coming from the community. I think that demonstrates we've not successfully made RLT a medicine that can be prescribed in the community setting for patients who prefer to access care in the community. Outside of the US, we saw 48% growth with NBRXs up 92%. This was driven by strong EU uptake, but also I think a notable solid start in Japan. where we're seeing very strong interest in Fluvicto, so we're excited about that, and the initial stages of a launch as well in China. As a reminder, we have manufacturing sites that are being built and getting up to speed now in Japan and China, which will allow us to serve the Asian market. So diving in a little bit deeper to think about some of those growth drivers, a key element of our story is driving depth in the existing sites. and expansion into urology that continues, and I think we're making good progress on that front. And then we also expect the hormone-sensitive approvals in the second half. There we expect the hormone-sensitive indication to increase the total patient pool available to Pluvicto by 75%, so a substantial expansion, and one that I think will enable us to get the next inflection of growth for Pluvicto. You can see here at the bottom of the slide some of the data on the number of sites, over 830 sites now prescribing in the U.S., 580 in the ex-U.S. I think that all just gives us confidence now we've been able to make RLT standard that's available now broadly in the communities that we serve and also sets us up well for the future radioligand therapy portfolio over the coming years. Moving to slide nine. Lyfio had a really strong quarter, and that was driven primarily by our performance outside of the U.S., with strong growth in China as well as in Europe and Japan. Now, first, let's start with the U.S., where we saw 31% growth in the quarter. We continue to outpace the advanced lipid lowering market, but I think in the U.S., the next inflection point we would expect is when we get the outcomes data in the first part of next year in the secondary prevention setting, and that will be an important milestone for us. Now, when you think about some of the other data, the highlights we're seeing, we're seeing that we are expanding in the Medicare Part B population up 11 points versus prior year. That's about two thirds of our current business. And we also see that our TRXs are consistently up 41 percent versus prior year. So I think all heading in the right direction, consistent, steady growth across the U.S. in the buy and build segment. Outside of the US, 106% constant currency growth. That was led by China. The NRDL listing unlocked significant demand. It is early days, so I think we'll have to see how the coming quarters evolve in China to really understand how much of this was a bolus versus a steady demand. But I think the early benchmarks that we're looking at suggest very strong demand in China and something that we're excited about for our future SIRNA portfolio. Now, lastly, in terms of evidence-based for Lectio, I mentioned the importance of the outcomes trials, but we also are advancing to where we received an FDA approval for adolescents in two specific rare disease indications, and that will be important as well from a long-term pediatric exclusivity standpoint. Lectio is included in the ACC and AHA guidelines, and I think many of you likely saw a that the guidelines highlight aggressive lipid management now, even at younger ages for patients. So I think that really points to not just statin use, but adding statin and PCFK9 use wherever possible. So I think that all points to a positive outlook for the medicine. Now moving to the next slide. Semblix was up 79%. I think really outstanding performance for this brand, both in the U.S. and ex-U.S. We see in the U.S. very strong performance in the frontline setting and outside the U.S., both second, third line and frontline now starting to pick up. Let's take each of those in sequence. So first in the U.S. now we've reached 31% first line NBRX share. You can see the steady climb upwards in the graph. So very excited about that. And hopefully soon we'll be consistently the leader in NBRX, NBRX new brand scripts in the United States. When you look at the, we're also leader across all lines now with 42% shares. I think that also demonstrates the breadth of interest in Semblix. Outside of the U.S., we grew 68%. That's driven primarily by our third line leadership, 73% share across our key markets. But we are seeing early line indications now starting, the indications starting to advance. We're approved in 63 countries. You can see in the chart here that the NBRX there in the first line in Japan, we've already reached 50%. In Germany, we're seeing early traction as well with 11% NBRX in the front line. And of course, for the long-term outlook for the rent, our goal is to make this the standard of care in the front line setting across all major geographies. And as you can see in the data, we're well on our way to deliver that goal. Now, moving to slide 11. Now, Cosentix had a broadly stable quarter, and we were impacted by some of the one-time effects that we had in the prior quarter in 2025. So when you net out those effects, we would estimate that our global sales growth was about 2%. In the U.S., we were roughly flat to 1% growth. So I think that indicates that we're stable, and I think set up well now as the new indications come online for Cosentix, and that's And that's going to be very, very important to ultimately achieve our peak sales goal. So when you look at some of the data, when you look at the hydradenitis superativa NBRX naive share, you can see here pretty consistently around 50%. We did see a slight dip in January because of the re-verification and the availability of biosimilars. But we see that now climbing back up. So we expect to be stable in that 50% range. Importantly, as well, for IV patient share, we see steady growth up to now 14%. And so both of these will continue to be important. We are hoping that the HS market continues to develop, not just for Cosentix, but as we'll address later, Remy Brutenev now will also have a readout later this year in HS. So we want to see this market expand so the patients who need better therapies are getting them. Outside of the U.S., we were up 3%. That's primarily driven by growth in Europe and emerging markets. We continue to see competitive pressures in China with multiple local NRDL entrants. And so there's a long list of competitors that we have. And we've had very strong share performance in China now over many years. But our goal will be to maintain now share and hopefully can stabilize as well as performance in China over the coming quarters. We continue to advance the new indications. Importantly, the PMR submission happened across geographies, and we expect the FDA approval in the second half. And we also received FDA approval for the pediatric HS indication, and we completed EMA submission as well. So all on track on that front. So moving to slide 12, I wanted to just say a few words on our renal portfolio by talking about each of the key brands. So first, let's talk about Fabhalta. Sales were up 103% in quarter one with NBRS leadership now, both in PNH and C3G. In PNH at the moment, we're seeing 50% NBRX share, as well as important and significant contributions from some of our key ex-US markets. In C3G, 56% NBRX share, and we're now approved in 46 countries. So both of those indications really are having solid and consistent performance. Now, importantly, in IGAN, I think we believe our uptake in US patients will continue to build with patients with persistent proteinuria. and glomerular inflammation. So here we're at later line therapy. But I think very important was the two-year phase three applause IGAN data, which was published in the New England Journal. It showed an impressive slowing in kidney function decline of 49% versus placebo and a reduction in progression to kidney failure by 43%. The FDA has granted us priority review for the traditional approval. So I think that just indicates the strength of the FAB-HALTA data in IGAN. For Venrafia, we see steady U.S. uptake and growth in a very competitive field, I think, as all of you know. That launch is ongoing. We have about 11% NBRX share. We see a significant market expansion opportunity with most patients still on supportive care. And as that market grows, we hope that Venrafia will ultimately benefit as a really effective and safe vascular agent, endothelial agent. And we do expect traditional FDA approval to drive future growth. You saw in the quarter we top-lined the aligned data, and we do expect to submit that data to FDA and EMA in the first half. We will present that data in full, and while we didn't reach statistical significance, we feel confident that the data is compelling and will allow that full approval to ultimately happen. Moving to slide 13. Now, Rapsodo CSU launched off to a strong start in the U.S., and we have the early steps now to begin the rollout as well outside of the U.S. And I think when you look at the profile we're building, pipeline and appeal potential, significant medicine here that could address a range of different dermatology and immunology indications. So starting with the CSU launch, the U.S. uptake, we see 3,000 prescribers to date. across allergists and dermatologists now prescribing the medicine. 6,000 patients start. So we're seeing very positive feedback on the speed of the onset of action. And we estimate an NBRX share now of 24%, which I think is very good in these early phases of launch. We are having early access wins, but I would say that access will build over the course of the year. So it will take us the full year to get to where we want to ultimately get to from an access standpoint. And that'll be important as well, because that's what allows us to bridge from free drugs to ultimately paid scripts. So that'll be a steady uptake over the course of the year, not a fast inflection. And then outside of the U.S., the China commercial launch and the European EC approval that we've received will enable us to hopefully have a solid launch to Rapsido in the second half of the year. We did also have the positive Sindhu readout, primary endpoint in chronic inducible urticaria. We saw significantly higher rates of complete responses versus placebo across all three Sindhu types the first time a medicine is delivered that well-tolerated with a favorable safety profile. We're on track now for the FDA approval in the first subtype of Sindhu and FDA submission of the other two types in the second half. Now, building on the overall profile for Rapsido, when you look at the next slide, slide 14, we did release as well the phase two results for remibrutinib in food allergy to support a fast-acting oral option for these patients. We also are on track now to initiate the phase three study. You can see here on the left the data that we read out. The 100 milligram dose provided 86.7% responders, which I think is a very impressive result. Our modeling indicates that the 75 milligram EID would be the appropriate dose for the patients moving forward. So that's the dose we've taken forward into the phase three study. Our focus will be a multi-allergen prevention study. So I think that's really exciting across a broad range of age, 12 years, all the way up to 65 years. And as I mentioned, anticipate initiation in the second half. This has the potential to address a significant unmet need, 3.5 million high-risk eligible patients across major markets. So very excited to add this to the indication list, hopefully, for Rapsodo. Then moving to slide 15. Also in the quarter, we completed the acquisition of Avidity, adding three late-stage medicines for neuromuscular disease. And I just wanted to highlight two data points from the quarter. We did release the one-year results for Delzota, our DMD Exon 44 skipping medicine, which was presented at the Muscular Dystrophy Association to a standing ovation, which I think shows the impact that this medicine could have for these patients. You can see here the creatine kinase declines, which are remarkable. And I think really experts have opined that it's really a revolution with this medicine. We're excited to also build after this. a range of additional exon skipping medicines for DMD. We are expecting the submission now in the first half as we've worked through some of the additional CMC topics to make sure that the file is fully submission ready. And then with Del Disseren, we had the final results for the Phase 1-2 study Marina trial published in the New England Journal. Those are results you all know well, but I think highlight the excellent profile that we've seen with this medicine. And we're on track for the Phase 3 readout for the Harbor study in the second half. moving to slide 16 i didn't want to say a word on the pipeline readouts for the rest of the year of the year we have quite a bit happening and we're excited about that so in the first half i already mentioned the rhapsody sindhu positive readout we did have unalamab readout and warm autoimmune hemolytic anemia which did not meet statistical significance so we won't be taking that forward but we don't expect that to be a read-through to itp where we already have positive second line data and we'll look forward to the first line data in the second half. We also have data in-house now for Vodafone Plan, which confirm our approach for the phase three study based on that data. We feel very comfortable taking the 10 milligram dose now forward into the pivotal phase three readout. We are in collaboration with our partner PTC now discussing the best next steps for that medicine, including further interactions as well with the FDA, and we'll keep everyone apprised as we continue to progress that medicine forward. We also are on track as well for the FSHD biomarker cohort readout as well. Our plan would be to ultimately disclose that data after we've had any discussions with FDA to understand better if the data meets the standard for an accelerated approval. We do not have that data in-house yet, but we do expect it over the course of the remainder of the first half. Other important readouts include, of course, the Pella-Carson readout, which I'm sure we can discuss, the remibrutinib MS readout, which will have two replicate studies, the Daldiseran DM1 study, which I also have mentioned. And then we've accelerated now the Rapsido HS program into the second half of this year. That study enrolled extremely quickly. So very excited because that will give us another first oral option for patients with HS. We also have our QCZ484 siRNA for hypertension phase two data reading out. And then lastly, VHB, our RILS TRM2 antibody reading out as well in the second half. So with that, I will hand it over to Mukul.