Novartis AG

Good afternoon and welcome to the Novartis Q2 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 yourself to one question and return to the queue for any follow-up. 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. Nigel Trotman, Head Business Planning and Analysis and Digital Finance. Please go ahead, sir.

Thank you, Sharon. Good morning and good afternoon and welcome everyone to our Q2 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 description of some of these factors, please refer to the company's Form 20F and its most recent quarterly results on Form 6K that respectively were filed with and furnished to the US Securities and Exchange Commission. Before we get started, and as a reminder, please kindly limit yourselves to one question at a time and we'll cycle through the queue as needed. And with that, I'll hand over to Vaz.

Thank you, Nigel. Thanks everyone for joining today's conference call. Moving to slide four, as you saw in the results released earlier today, Novartis delivered strong performance across our priority brands and launches while advancing the pipeline, allowing us to return to growth in the second quarter. The business grew 1% in constant currencies in USD and we had flat core operating income at $5.9 billion. Mukul will go through the numbers in more detail later on in the call. But we're reaffirming our full year guidance for 2026. We also had some important pipeline highlights, which I'll talk about more during the course of the conference call, including updated Qiskali OS data, the Dell Brax biomarker data in FSHD, as well as some other regulatory milestones we were able to deliver over the course of the quarter. Now moving to slide five. Our growth drivers continued a strong trajectory in quarter two. They were up 36% in constant currencies. Some of the highlights include strong performance from Cascali, Cosimta, Semblix. Solid performance from Pluvicto and strong performance as well from Lectio. So overall taken together, these growth drivers are performing strongly. We believe that gives us momentum going into the second quarter, second half of the year as we now move beyond the Entrusto patent expiry and set us up well to deliver on our midterm growth guidance. Now moving to slide six. Kaskaly was up 43% in constant currencies on the quarter. We outpaced the CDK 4.6 market. We had strong performance in the U.S. and outside the U.S. In the U.S., we were up 39%, reaching over a billion dollars in sales for the first time. We continued our metastatic red express cancer leadership. with an increasing share in first line. And we also sustained our early breast cancer NBRX and TRX leadership with 58% of new patients now from our exclusive N0 and N1 nodal populations. We also continue to grow our total prescriber base up 16% and we see future growth continuing to be driven by these exclusive Kaskali early breast cancer segments. Outside of the U.S., we were up 49% with continued metastatic leadership. Our growth was accelerating in our EBC launches. We're now approved in 76 countries and reimbursed in 42. And as you can see in the chart in a case study in Germany, we've reached 79% EBC NBRX share. We're having similar performance in other key markets. Overall, we're pleased with the trajectory for Cascalli and remain confident in our $10 billion peak sales goals. Moving to slide seven, we're announcing today also updated six-year follow-up data demonstrating that Qiskali showed clinically meaningful OS in that broadest at-risk EBC population. That data will be presented at an upcoming Congress. This is the six-year pre-specified landmark data for IDFS as well as for OS. The IDFF benefit continues over time and continues to strengthen the case for use in the broadest at-risk EBC population. Safety remained consistent with the known profile of Cascali. We believe this data underscores the value of dual inhibition with Cascali and endocrine therapies across all subgroups. So we'll look forward to providing the full details of this data, as I mentioned, in an upcoming medical congress. Moving to slide eight, Kesimpta had another strong quarter, up 32%, continuing to increase its share across our key markets. In the US, we were up 32% in quarter two, increasing our TRX share in both B-cell and MS markets. Importantly, we're growing our NBRX share ahead of our competitors in the first line and first switch segments, which are our target segments for this medicine. Outside of the U.S., also very good performance. We're seeing strong growth in Europe as well as sustained NBRX growth in our top international markets. We see a continued opportunity in these international markets given that two-thirds of patients remain treated with older therapies, not on B-cell therapies. This is a clear opportunity for expansion over time. We also continue to progress our next generation evidence and continued lifecycle management for Kesimpta. Our ongoing phase three with a once every two months dose Kesimpta for maintenance dosing is on track for a 2027 readout. So moving to slide nine, Pluvicto grew 43%, and this is driven primarily by our PSMA4 population and the pre-taxane MCRPC. We also see now acceleration outside of the US. In the US, pre-taxane is now driving over 70% of new patients. We continue to focus on use after the first ARPI. This is our largest segment. And we believe we now will have the opportunity to drive further growth given that the NCCN guidelines have been updated to remove routine use of a second ARPI in this setting. We continue to expand our sites, over 880 sites now providing PluVecto. And a lot of our focus now is getting additional depth in those sites, especially as we prepare now for the HSPC launch. Outside of the U.S., strong growth, 83% growth in new patients with accelerating adoption in Europe and launch momentum in Japan and China. The number of sites now that are providing RLT outside of the U.S. is over 650. This sets us up well as well for our future RLT pipeline where we're excited to continue to progress beyond Fluvicto and Lutathera, hopefully into additional cancer types in the coming years. The next wave of growth for Plovicto will be the expected approval in quarter three in HSPC. This will increase the eligible patient pool by 75%, give us a strong foundation for further growth. Two thirds of the patients in the PSMA edition population are with healthcare providers that currently use Plovicto today. So we think we have, or with established referral patterns, we think of a strong base for rapid adoption. and then we continue to progress the pipeline. We presented results for our Ractinium PSMA and MCRPC. This medicine is now being studied in the post-pluvicto setting, in the post-chemo setting and then as well in the first line MCRPC setting in combination with ARPI. So an opportunity here to lifecycle manage pluvicto for the longer term. Moving to slide 10, Lectio had a strong quarter growing 59% driven by strong demand we saw across the globe. In the U.S., we were up 55% in quarter two. We outpaced the advanced lipid lowering market. This was driven by monthly TRX growth of 49% demonstrating Lectio's The differentiated profile, strong persistency, the demand is being driven with increasing depth in the priority health systems that we're targeting. The most important segment for us remains the Medicare Part B segment, where we see 23.3% share, that's up 3.6% year to date. And we see an opportunity for a continued expansion. I think even with orals launching, our opportunity remains for driving strong growth in the segment that wants infrequently administered physician administered medicines for light lipid lowering in the United States. And we see this as an attractive and growing segment that supports our peak sales potential in the US and beyond. Outside of the U.S., NRDL inclusion is unlocking significant demand. We saw that in quarter one and continues in quarter two. Our market share has doubled now versus the pre-NRDL share we were previously seeing. We also see sustained growth in Europe and Japan. So overall pleased with our performance. We keep generating additional data for Letheo. Three world studies demonstrated that Incluster and Letheo improves adherence and persistence compared to other advanced lipid lowering therapies. and then we also have the V-Challenge head-to-head study of Inclisarin versus Memphidoic Acid which will prevent N-ESC. And lastly, we're on track as well for our two outcome studies to read out in 2027 for Lectio. Moving to slide 11, Semblix had a very strong quarter, 89% constant currency growth driven by both U.S. and ex-U.S. performance. In the U.S., we had 93% growth in the quarter. This is driven by sustained leadership across all lines, but importantly, we now expect to reach a first-line NBRX leadership share in the second half of the year. You can see steady improvements in that first-line NBRX share. Outside of the U.S., we're primarily still driven by the third line and beyond performance with 75% NBRX share across our key markets. But importantly, for future growth, we're seeing early line adoption now starting to pick up. We are now approved in 65 countries outside of the U.S. In Japan, we've already reached first line NBRX leadership, as you can see in the lower chart. In Germany, our early NBRX first line share is already up to 15%. So we're very excited for the trajectory of Stumblix and to continue to be a growth driver long into the future. Now with Cosentix we had a solid quarter 10% constant currency growth in part driven by some one-timers with still strong underlying growth and when you look at in the US we were up 16% you can see that in NHS we're steady in our NBRX share in the high 40s and we expect that to continue. We see steady demand growth in NHS and IV. Underlying growth in the US is around the mid single digits as we've guided to in the past and outside of the US continued solid growth. In Europe, we do see additional challenges in China with more competition, but we're able to manage that to maintain the overall global performance of the brand. And then we're excited by the phase three replenish PMR polymyalgia rheumatica data, which we recently published and presented at UR. It showed very strong data with sustained remission at 52 weeks that was twice as high in patients treated with Cosentix versus placebo. So we're anticipating FDA approval for that indication in the second half and remain on track for the $8 billion peak sales guidance that we've previously provided. Now moving to slide 13, Rapsido continues its strong launch trajectory with phase three Sindhu data now available to support our broader potential in urticaria. Starting with the CSU launch, we see continued solid US uptake, over 4,000 prescribers, over 10,000 patients treated. 60% of those patients are treated in the first line setting. We see steady expansion in our patient access. We have two of the three major PBMs now covering remibrutinib, rupseto, with PA the label. And in the second half, we expect steady expansion in that access with an effective bridge and sample program in place. We don't expect an inflection per se. We think this will be steady expansion. We want to ensure that we're disciplined in how we approach getting reimbursement given the multiple indications we hope to secure for remibrutinib over time. Outside of the U.S., we see good traction in China. Launches are ongoing across Europe and the Middle East, and we'll see further expansion in the second half post the EMEA, Japan, and Swiss approvals. Now, importantly, in chronic inducible urticaria, we presented our REMIND data supporting remirutinib as the potential as the first targeted therapy for chronic inducible urticaria. We had early and broad efficacy. with onset as early as week two in the two additional largest subtypes, consistent 12-week responses versus placebo. So we're on track for the FDA approval in SD, which is the most common Sindhu subtype, two-thirds of Sindhu patients. and then we'll have global filings across all three subtypes later this year. Just as a reminder, we estimate in the US there's about 100,000 Sindhu patients that are uncontrolled with antihistamines with no other treatment options. So this is a significant expansion in the population that can be helped by Rapsido. Now turning to slide 14, we also presented some updated data on Yonalimab showing the favorable SI benefits of the medicine and longer-term follow-up. And we remain on track for a US launch in Sjogren's disease in the second half. So you can see on the left side of this chart, in our pooled Neptunus data, you can see the consistent benefits in SDI statistically significant versus the placebo arm across both studies when pooled, demonstrating the benefits we see with the medicine. And then as well, we presented 108-week long-term extension data which showed that we can maintain the benefits of unalimab over time. And it also was supported by clinically meaningful improvements for the placebo crossover group when crossing over onto the active arm. Also throughout all of these long-term follow-ups, we see a favorable safety profile, no increase in adverse events. So this supports Yenelam's multi blockbuster potential. We're on track for the ITP first line readout in the second half of 2026, the SLE and lupus nephritis phase three readouts in 2027, and the systemic sclerosis phase two readout as well in 2027. So turning to slide 15, I want to provide an update on two of the acquired programs from Avidity. First with the DELZOTA, we achieved our first FDA submission for the therapeutic use of an antibody oligo-conjugate. That FDA submission is for accelerated approval in the DMD44, saxon 44, skipping using dystrophin as a surrogate biomarker. We've previously received FDA breakthrough therapy designation for this. The submission package is based on the outstanding data that we had in the Explore 44 study as well as long-term follow-up. And we expect the first launch here in the first half of 27 with the ongoing phase three studies ongoing. We have multiple follow-on programs now targeting additional exons that we'll be bringing forward as well. So we're quite excited to leverage this technology to take on DMD across multiple subtypes. And then with respect to the Delbrax data, we read out in the quarter as well that the Phase 1-2 study at the target dose that we are taking into Phase 3 studies met its primary and key secondary biomarker endpoints. So as a reminder, this is a study that looked at KHDC1L and creatine kinase reductions in the plasma. KHDC1L is a protein that's downstream and believed to be regulated by Dux4, Dux4 being the Thank you for joining us today. and ongoing work we're currently conducting to hopefully correlate the biomarkers to Dux4 as well as clinical improvements in these patients. We plan to engage FDA and other regulatory authorities in the coming months and then we'll ultimately provide an update if those regulatory authorities support our ability to file this medicine based on this data. Now moving to slide 16. So we're on track for a busy second half. We already had four readouts in the first half. In the second half, we expect with Pella Carson, Remy Brudnib, and Del Disserand readouts in the coming months. And then before the end of the year, readouts for Yanalimab, Repsido, and HS, as well as additional readouts for Phase II programs, QCZ484, as well as VHB937 in ALS. So exciting, I think, second half coming up. Solid first half of the year and looking forward to continued progress in the months ahead. So with that, I'll hand it over to Mukul.