Good morning and good afternoon, and welcome to the Novartis Q2 2024 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. 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. Sloan Simpson, Head of Investor Relations. Please go ahead, madam.

Thank you, operator. Good morning and good afternoon, everyone. Thank you for joining our Q2 2024 earnings 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 recently were filed with and furnished to the U.S. Securities and Exchange Commission. And with that, I will hand across to Vas.

Thank you, Sloan, and thank you, everyone, for joining today's conference call. With me on the call, as always, is our CFO, Harry Kirsch. So starting with Slide 4. As you saw in quarter 2, we continued the strong growth performance at Novartis, which gives us conviction that we are well on track to deliver our 5% plus sales growth out to 2028 and a 40% margin target in 2027. You saw sales in the quarter were up 11% in constant currency, core operating income up 19%. Our core margin reached 39.6%, reflecting our outstanding productivity programs, but also as a consequence of our strong sales growth. In addition, we had important innovation highlights in the quarter, which we'll review over the course of the call. But some of the really important ones included Scemblix first-line CML FDA submission, updated Kisqali NATALEE data, which we think really supports the outstanding profile of Kisqali in the adjuvant setting, in the early breast cancer setting, and we're looking forward to presenting that outstanding data at an upcoming medical congress. And continuing to build out our renal portfolio with the atrasentan submission, as well as our broader portfolio of presentations at the recent ERA meetings. Taken together, this allowed us to upgrade our full year 2024 core operating income guidance. Harry will go through that in more detail. Now moving to Slide 5. Our Q2 growth was broad-based, and we had strong contributions from multiple of our outstanding growth drivers. Importantly, Kesimpta was also a really outstanding start earlier in the year and continued that momentum. Kisqali also continued its strong momentum. Cosentyx with the recent launches, continues to grow in a robust way. We saw steady growth in Pluvicto, strong growth in Leqvio and Scemblix. Taken together, this resulted in 37% constant currency growth, which we expect to continue. Taking each one of these brands in turn, Entresto delivered 28% growth in quarter 2, and we continue to have high confidence we will exceed our $7 billion peak sales guidance for this medicine. That growth was driven by all our core geographies. You can see here in the middle panel, U.S. weekly TRx reached another record high. That 25% growth was fueled by consistent demand across the various segments that we compete in. Outside of the U.S., growth was 30%, with strong contribution from China and Japan, where we continue to see momentum from Entresto in heart failure, but also importantly there in hypertension. So we remain confident in the continued sustained performance of the medicine. For forecasting purposes, we continue to assume an Entresto LOE in mid-2025. However, we continue to enforce our patents and litigate our patents and will ensure that we maximize this brand for as long as possible in the United States alongside EU RDD in November of 2026. Then moving to Slide 7. Cosentyx grew at 22% in the quarter, and this is fueled by our new launches. And I think importantly, if you take a step back, puts us well on our trajectory to reach $7 billion plus of our peak sales for Cosentyx. When you look at the demand growth by geography, the U.S. grew 34%, driven by volume. Ex U.S., we were up 10%. And this was partially offset by one-time pricing effects due in Germany, in particular, due to the addition of additional new indications. Normal part of the German process as you get additional indications you do see price adjustments. We see Cosentyx doing very well in its core indications. I think one important dynamic is the strong launch in HS is supporting us in our core indications of psoriasis, PsA and AS. We're the number one IL-17 in the U.S., the lead originator biologic in Europe and China. In HS, we're seeing a very strong uptake with market leadership share of over 60% in the NBRx. In Germany, we're over 50%. I think importantly, with the launch of Cosentyx, we're seeing increased diagnosis and desire to treat amongst physicians and patients, which I think will allow the HS market to grow larger than it has historically been. And of course, a lot of Cosentyx to help these patients achieve their treatment goals. For Cosentyx IV, we saw solid adoption with over 700 accounts now ordering. We do expect further demand increases in the second half now that we have a permanent J-code in effect as of July 1. So moving to Slide 8. Kesimpta also delivered, as I mentioned, a very strong quarter two, 65% growth. This was broad-based in terms of geographic growth profile. Over 100,000 patients have now been treated worldwide, naive or first switch with Kesimpta. In the U.S., we saw 49% growth. This demand growth was driven by TRx volume of 43% versus prior year. We gained 4% market share overall in the segment. Outside of the U.S., we have NBRx leadership in seven out of 10 major markets. So looking forward, we feel confident we will exceed our Kesimpta $4 billion peak sales guidance. We see a strong trajectory for this brand. Its profile is unique: self-administered B-cell treatment option, one minute a month dosing, no steroid pretreatment required, an attractive safety profile with respect to injection site reactions. Persistence and adherence we're seeing in the real-world setting is comparable to infused B-cell therapies. We also continue to generate data which support the strong efficacy profile of this medicine. So moving to Slide 9. Kisqali grew 50% in the metastatic setting and with now continued leading NBRx share in the U.S. and ex-U.S. As you know, Kisqali has an outstanding data profile in the metastatic breast cancer setting. That's really supporting us consistently now around the world. In the U.S., we saw 67% growth, where we gained widespread adoption. We have a leading share now NBRx share of 47%. 7,000 HCPs now prescribing and that provides us a very strong base of physicians, which we can leverage as we move to the early breast cancer launch. Similarly, outside of the U.S., we saw 35% growth as the preferred CDK4/6 inhibitor. We have a leading share of 38%. We're the fastest-growing CDK4/6 inhibitor in Europe. And when you look at the early breast cancer setting, we're on track now for a launch in the second half. We've completed the manufacturing adjustments in close collaboration with the FDA, which we outlined earlier in the year. We're now anticipating a U.S. approval by the end of quarter three. We remain confident in a broad label based on the consistency of results that we've seen across the NATALEE population and as we announced this morning, we have now updated the NATALEE data with a median follow-up of four years. All patients have now completed their 3-year course of the medicine. We see continued clinically meaningful benefit and a consistent safety profile. We believe these results are very compelling and will really support the launch of this medicine. We're really excited to present that data at an upcoming medical meeting and continue to support that Kisqali will hopefully be the preferred medicine for patients with early breast cancer. Now moving to Slide 10. Pluvicto has demonstrated very steady growth versus prior year. Now when you take a step back on Pluvicto, we're now in a transition point where our early rapid uptake is now transitioning to a place where we need to generate demand in the next wave of centers, and then eventually have the community oncology, both for the success of Pluvicto but also for the long-term success of RLT. That said, we remain highly confident in the long-term prospects of Pluvicto to be a multibillion-dollar medicine across the various segments that we'll compete in. We do believe that once we're through this period, we will get back to robust growth, particularly driven by the PSMAfore indication and later, the HSPC and all of the metastatic indications. We had growth, as I mentioned, of 44% on the quarter. Now when you specifically look at the VISION population, we estimate our market share is in the mid-30%, with 50% share in established RLT treatment sites. We see a dynamic where the sites where we're well established we could have market shares above 90%. We have another group of sites where we're working to go from 50% to 90%. And then we have about one-third of sites of the 475 treatment sites that we're operating in, where we need to now go from 10% share of the VISION population, and over time, hopefully up to 50% to 90%. That will drive the steady growth we expect over the course of the coming quarters. When you look specifically at what we're doing to supercharge Pluvicto and also enable us to build a broad capacity for the system to take on RLT, we're increasing our U.S. promotional efforts, including field force expansion, which is now completed. We'll be launching a DTC campaign in quarter three. We'll also have the phased launch of the patient-ready dose, which is a very important step to reduce the time from providing Pluvicto from around an hour to less than 10 minutes. This will allow sites to hopefully take on more patients, especially those that have significant capacity to admit more VISION patients. Lastly, we had German pricing approved, which is why you've seen the uplift in the ex-U.S. market, ex-U.S. sales profile. So looking ahead, FDA submission for PSMAfore is on track in the second half. We already have profiled the positive trend in OS in PSMAfore. A submission in China is planned in the second half. We also did a groundbreaking for an RLT manufacturing site in China, alongside a plan also for manufacturing sites in Japan. PSMAddition and PSMA-DC continue to progress as per plan. Now moving to Slide 11. Leqvio had strong growth as well, 134% growth. I think we're seeing more and more acceptance of the option to take twice-a-year medicine to achieve a 50% to 60% cholesterol lowering. That’s a trend broad-based around the world. We have now 4,200 facilities ordering Leqvio in the U.S. We continue to steadily expand our breadth and depth and generate additional data to support the profile of Leqvio as we move also towards our outcomes trials, two outcomes trials for Leqvio. Additionally, we continue to progress efforts to move Leqvio into the frontline setting for cholesterol management. Outside of the U.S., our rollout continues with over 35 countries and strong reimbursement. Market growth is at 24% versus the prior year. So we feel confident step-by-step Leqvio will also progress towards its multibillion-dollar goal. Now moving to Slide 12. Scemblix's momentum continued in quarter two. We have U.S. market leadership in the third-line setting. At ASCO, we presented our outstanding first-line data, which I'll go in a little more detail about on the next slide. When you look at the third-line setting, we're the market leader in NBRx and TRx share in the U.S. Outstanding performance as well we're seeing outside of the United States. TRx and monthly prescribers continue to grow across all geographies. One important note for modeling purposes is that shortly we'll be launching a 100-milligram SKU for the T315I patients, a patient group that requires 400 milligrams of Scemblix, which is about 10 pills per day. They will now be able to take four pills per day. This will lead to about a $15 million sales adjustment that will not repeat in quarters two and three. For your modeling, just take that price adjustment into account with the 100-milligram dose being launched, due to consistent pricing across SKUs. More importantly, we're very confident in the first-line opportunity. We have FDA submission under real-time oncology review. We received breakthrough therapy designation. We believe the truly outstanding data at ASCO positioned Scemblix as the medicine of choice for patients in the frontline setting. We're looking forward to completing our ex-U.S. submissions in 2024 and 2025. Now moving to the Scemblix ASCO data. This data demonstrated superior efficacy and a favorable safety and tolerability profile against standard of care TKIs in first-line CML. Efficacy-wise, superior MMR rates and deep molecular response, importantly also against all TKIs and against imatinib with very impressive differences. We had earlier achievement of MMR, greater depth of responses. Also important improvement versus second-generation TKIs in MMR speed and depth. And very importantly, outstanding safety and tolerability with fewer grade three AEs, fewer dose adjustments or interruptions. This makes Scemblix the medicine of choice for these patients. We are very excited about bringing this medicine forward. We guided to $3 billion-plus peak sales for Scemblix. Scemblix has protection into the mid-2030s and as a rare disease medicine will not be part of the IRA. So a really great profile, great medicine. Very excited about its future. Now turning to Fabhalta. We had the U.S. PNH launch, which is off to a very encouraging start. We saw really strong growth in quarter two versus quarter one. Ex-U.S. approvals have also been received in multiple markets. About the profile of Fabhalta, we're making steady progress. We have REMS-certified HCPs ahead of competitive benchmarks. We see continued uptake across naive and switch patients being treated across all hemoglobin levels, including those at 10 to 12 or just slightly below normal, showing the interest in a twice-a-day oral option. We also see increasing commercial coverage as part of our bridge program. So all on track with respect to Fabhalta. We expect steady growth in the second half but also take into account that the previous bolus of patients from the first half, especially the conversion from the bridge, likely won't repeat in the second half. So our growth rate will be steady, and this is exciting, but not at the rates we saw in the early part of the year. Turning to our renal portfolio, we've been working to build an attractive portfolio to manage IgAN, C3G and related renal diseases. As part of that effort, we acquired atrasentan. In the Phase III ALIGN-IgAN study, we announced at ERA in May, a 36% proteinuria reduction relative to placebo. We're very excited about this medicine as we think it can be a foundational medicine to provide hemodynamic and nephroprotective potential for patients and physicians. It's a clinically meaningful proteinuria reduction. We see a very favorable safety profile. Up to 50% of patients with persistent proteinuria progress to kidney failure. We submitted to the FDA. The study continues in a blinded fashion to 2026 when we would read out the eGFR. We're looking forward to launching this medicine in 2025. Alongside that, with iptacopan, we also announced at ERA the full result Phase III APPEAR-C3G study, which demonstrated a 35% proteinuria reduction relative to placebo. On the left-hand side of the slide, you see the design. On the right-hand side, you see impressive minus 30% versus an increase of 7.6% in the placebo arm. We saw numerical improvements in eGFR, favorable safety profile overall. This would be the first potential treatment targeting the complement pathway in C3G. We're also announcing end of study results for this medicine at the 12-month time point, consistent with the 6-month data, which now allows us to move forward with filing in the second half of 2024, with an expected launch next year. We'll present that end-of-study data at an upcoming medical meeting. This is an important update for this medicine, and we hope to have also, next year, three separate indications. Before handing it over to Harry, we expect to continue our innovation momentum in the second half. We had 10 positive Phase III readouts in 2023. This year is about filing and ensuring we get these medicines ready to launch. We're excited as well about the next wave of medicines. One thing we did want to note is we have shifted our remibrutinib CSU filing slightly as we need to make a few CMC adjustments. As a reminder, remibrutinib showed biologic-like efficacy in the control of CSU and has a very good safety profile. We’re excited to get that medicine submitted in 2025 and then out to launch. We expect a steady stream of readouts in 2025 and 2026, which we'll profile in upcoming meetings. So with that, let me hand it over to Harry.

Yes. Thank you, Vas. Good morning, and good afternoon, everybody. I'll now walk you through, as always, through our financials of the second quarter and the first half. My comments will always refer to growth rates in constant currencies unless otherwise stated. I will also be referring to continuing operations that will be the remainder of this year, given the Sandoz spin in October last year. As you see and have seen already, we had a very strong first half of the year and continued momentum of our quarter one start into Q2. On Slide 19. Now Q2 sales grew 11%. Core operating income was up 19%. Core EPS was $1.97, growing 21%. Free cash flow was $4.6 billion. Very strong, up 40% in U.S. dollars. For the first half, which you see on the right side, again, the same 11% growth and core operating income up 21% as Q1. Our core margin on the half-year, always better look at a longer period, not only one quarter, up to 39% and up 310 basis points, demonstrating clear progress towards achieving our midterm margin guidance of 40% plus by 2027. Core EPS at $3.77, up 22% and free cash flow almost up to $7 billion, up 11%. These numbers reflect the full effect of our pure-play pharma company and our transformation for growth, with very strong worldwide execution. So turning to Slide 20. We expect continued strong underlying growth dynamics for the second half. Usually, we do not provide quarterly guidance, but this time, it may be helpful as you model the remainder of the year. With respect to quarterly phasing, I want to remind you that last year, Q3 included a couple of one-time effects that were not super significant, but likely we will see in quarter three. Because of these two points of one-time effects, more high single-digit growth, still very strong. However, we had a one-time revenue reduction true-up of Cosentyx in Europe. There was also some Sandoz inventory built up ahead of the spin I mentioned in quarter three last year. These two items add up to two percentage points of sales growth. We anticipates high single-digit growth in Q3, and there is a bit of an effect on core operating income, usually 2x to 3x of the top line points. But again, underlying is exactly what we have seen roughly so far. And in Q4, it depends on how the two potential generics come in, Sandostatin and Tasigna. If they don't come in, I would expect us to be at the high end of the guidance for both the quarter and for the year. I hope that helps you a bit with the quality phasing. We usually don't do this, but this is warranted as we increase our guidance for the year on the bottom line. Moving on to Slide 21 for the full year guidance. We continue to expect sales growth to be in the high single-digit to low double-digit range. However, the strong momentum we are seeing in the business, together with continued productivity results, gives us the confidence to upgrade our bottom line guidance. We now expect core operating income to grow in the range of mid- to high teens, improving from the prior double-digit to mid-teens. Underpinning our guidance are the assumptions that no Entresto or Promacta generics would launch in the U.S. in 2024. To complete the full year guidance, please note that we expect core net financial expenses to be around several hundred million, and our core tax rate to be around 16.2%. On Slide 22, just a reminder that we remain committed to our shareholder-friendly capital allocation strategy to invest in the business while also returning capital to our shareholders in the first half of the year. In addition to investing in our internal R&D, we also bought external innovation via bolt-on M&A and BD&L deals, particularly to strengthen our pipeline in oncology as well as our RLT platform. In terms of returning capital to shareholders, we paid out $7.6 billion in dividends in the first half. We also continue with our up to $15 billion share buyback, which has approximately $10 billion left to be executed by the end of 2025. On currencies, as always, we outline that. In Q2, FX had a negative 2 percentage point impact on both net sales and core operating income on our results. If mid-July rates prevail for the remainder of 2024, we would expect the full year currency impact to be negative one to two percentage points on net sales and negative three percentage points on core operating income. The estimated impact of exchange rates in our results is always provided mid-month on our website. Back to Vas.

Great. Thank you, Harry. Before taking your questions, just to briefly summarize. Continued momentum in Q2 with sales up 11%, core operating margin approaching 40%. We see strong commercial execution, which demonstrates our ability to drive our in-market brand medicines, drive growth brands, and new launches. Our system supports our bottom line guidance raise for full year 2024. Our pipeline continues to advance with the FDA submissions of Scemblix in the first line, Atrasentan in IgAN, and our updated data for Kisqali in early breast cancer. We are on track to achieve our midterm guidance of 5% constant currency sales growth through 2028 CAGR and a 40% core operating margin by 2027. It was a great quarter for the company, and we look forward to continuing to drive strong performance through the remainder of this year. With that, we can open the line for questions.

We will now take your first question from Emily Field at Barclays. Please go ahead.

Hi. Thank you so much for taking my question. I just wanted to ask for a bit more context on the NATALEE delay of the PDUFA in the United States. Can you confirm that this was very specific to the manufacturing issue and that the FDA did not ask for any additional information with regards to any of the subgroups or any additional information from the clinical trials? Thank you.

Yes. Thanks, Emily. This delay was only related to the CMC issue. We've already initiated label discussions with the FDA. We submitted some additional data to support our provision to the CMC package. With that, we had the standard 3-month extension because we submitted that additional data. This extends the PDUFA out by three months. We believe now we're well on track having finalized the submission of that data for an approval inside of Q3.

Thank you. Your next question comes from the line of Florent Cespedes from Bernstein. Please go ahead.

Good afternoon. Thank you very much for taking my question. A quick question on Cosentyx. The new indication in HS, could you give us some color on how you see the HS opportunity going forward? As it seems that you are gaining new patients with a new treatment, more potent than the existing one, but there will also be new entrants in the coming years. So some color on this HS market opportunity would be great? Thank you.

Yes, thanks, Florent. Historically, only anti-TNFs, adalimumab, was the only biologic medicine available for these patients. I think the market had not grown to its full potential. HS is a relatively prevalent dermatological disease, being the second most prevalent after psoriasis. There is a significant unmet need. We expect a significant expansion in the market as more entrants come in. We continue to believe that Cosentyx and HS will alone become a $1 billion medicine. So we're very optimistic about Cosentyx's outlook in HS, even with other entrants coming in. Many patients are not on biologics or have dropped out and are not receiving care at all. Now that physicians know there are safe options available, we believe more and more patients will be brought in. We see that broad base globally. We also have a pipeline we're developing for future agents to follow on for Cosentyx in HS, which are currently in Phase 2 studies.

Thank you very much.

Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead.

Thank you for taking the question. The pipeline question on ianalumab, which you pulled forward the readout in Sjogren 2025. Just the drivers for that, confidence on probability of success. There have been a number of competitor updates in that space recently. Could you refresh us with your thoughts on the magnitude of ESSDAI improvement you're hoping to show and whether you still consider that to be the right and definitive endpoint? Thank you.

Yes, thanks, Emmanuel. We saw a very fast enrollment for ianalumab in Sjogren, higher and faster than expected. The Phase 2 data allows for significant improvement in ESSDAI and other patient-reported outcomes. Obviously, we won't quantify the magnitudes of ESSDAI benefit, but if we can repeat what we saw in Phase 2b, that would be a compelling option. The unique mechanism of action, anti-BAFF, allows you to deplete B cells in multiple compartments, which we think is important for a disease like Sjogren that impacts multiple tissues. Besides ESSDAI, patient-reported outcomes like salivary gland function and dry eye are what patients would like to see improve. If we can demonstrate in addition to the composite endpoint PROs that show important benefits for these patients, we believe this could be an exciting opportunity. Overall, ianalumab presents a multi-billion dollar opportunity in combination with Sjogren’s, and we're conducting multiple other Phase 3 programs ongoing in separate hematological indications expecting readouts in 2027. We are also taking ianalumab into other immunology indications.

Thank you for the thorough response.

Thank you. Your next question comes from the line of Richard Parkes from BNP Paribas. Please go ahead.

Hi, thank you for taking my question. I was going to stick on pipeline events in 2025. On pelacarsen, probably your next multi-blockbuster readout, could you just remind us what your powering assumptions are in terms of the benefit you're looking to see in the Lp(a) HORIZON trial? Can you talk about barriers to uptake of Lp(a) targeting agents? Obviously, PCSK9 uptake has been disappointing for investors, partly attributed to the need for injections and costs. I'm just wondering if those barriers will also limit Lp(a) targeting agents or if the lack of available alternatives for patients with elevated Lp(a) will mean those barriers are less significant? Thank you.

Yes, thank you, Richard. First, in terms of the study design, the Pelicarsen study looks at two different levels of Lp(a). The top quartile and then a separate analysis, allowing us a second look at the top decile of patients in terms of their level of Lp(a). This was based on large scale epidemiological studies on how risk evolves from different quartiles and deciles of patients with elevated Lp(a). Our hope is to show both analyses and demonstrate greater than 20% CVRR, with aspirations to achieve even higher. If we can show improved levels, that would motivate physicians to ensure these patients are tested. We have learned through various cardiovascular launches to take a specialty-minded approach in launching these medicines. Rather than broad-based Lp(a) testing for large populations, we seek to systematically look at large datasets and target groups with high risks of elevated Lp(a), alongside targeting specialty groups that have a higher propensity to want to test and treat. I'm confident that these efforts will drive more rapid uptake.

Thank you.

Thank you. Your next question comes from the line of Graham Parry from Bank of America. Please go ahead.

Okay. Thanks for taking my questions. Just wanted to come back to NATALEE actually. Can you clarify, you still think there's no manufacturing site inspection needed for the new process? You said in Q1 you didn't expect that, and I assume you'd know by now. We remain confident that there is no outcome coming and confidence in the broad label. I know there’s some discussion in the market about the node-negative patient population and whether that's approvable or not? Thank you.

Yes. Thanks, Graham. Again, based on the label discussions we have, we're confident in the broad label and there is no manufacturing inspection required. All the changes we made are related to product handling. We have to provide stability data, which we're always obligated to do when making changes. Once we finish that, the FDA can decide based on stability data. There are no other inspections, and we're gearing up for launch in late Q3.

Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead.

Great. Thanks for taking my questions. I have one on Pluvicto. Could you walk us through some of the competitive dynamics you're seeing in the U.S.? You mentioned that centers had 30% share. What is the consideration there in terms of driving the increase in share in those centers? In terms of the community centers, where are you in terms of the development of the community centers and Pluvicto’s offering there? How are physicians in those centers thinking about Pluvicto, which is relatively more complicated than the androgen receptor inhibitors, which are overall simple and seems to be launching quite strongly as well?

Yes. Thanks, James. When you look at the dynamics on Pluvicto, we have roughly 425 centers. About a third of those centers are established in the VISION population, where we see 90% market share. There is a second group of centers where we see about 50% share, and our goal is to drive that up to 90%. The last third of centers are more community-based, and here the dynamics require more education for physicians. Many are currently cycling through chemotherapy rather than referring to Pluvicto because of a lack of familiarity. To improve, we’re deploying new strategies which include an expansion of our field force for community oncology, community urology, and reinforcing our referral base. Additionally, a DTC campaign will promote awareness of Pluvicto in the community. It's critical for patients to access Pluvicto sooner for better outcomes, and educational efforts will help drive these referrals. If we can unlock that segment over the coming months, we can continue to drive Pluvicto in the VISION population to the multibillion-dollar potential we envision. Regarding the patient-ready dose, it offers two advantages. Within centers with established high utilization, it allows them to treat more patients effectively. By reducing the time, the chair time, and prep time for a given patient, we expand the capacity of those centers. This is crucial as we get to PSMAfore, where there will be a considerable increase in patients. We want to ensure they can adequately accommodate more patients. We also see very strong uptake in Germany, and we expect further robust uptake in other European markets. So, we’re confident, step-by-step, we will build this into a major opportunity. Additionally, the Asian markets show significant potential for RLT, as we are also set to file in China this year and have recently established manufacturing operations.

Thank you. Your next question comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.

Yes, thank you very much for taking my question. Vas, your revenue aspiration is for mid-single-digit growth out to 2030, now on a 2024 basis with about $66 billion. When we look at consensus, it's about $53 billion at the moment, so about a $13 billion gap. Which growth drivers, in your opinion, does consensus underappreciate? What are the key readouts and progress points that we shouldlook out for that might close the disconnect between expectations and your aspirations?

Yes. Thanks, Mark. It's often the case that our aspirations outpace consensus. Looking back to 2017, we promised delivery on an apple-to-apple basis. We have consistently delivered on our growth targets. When you evaluate consensus, you find that more analysts are less present when projections are made far into the future. Several brands are top of mind for us. Kisqali, Pluvicto, Leqvio, and iptacopan, all have higher potential than what exists in current consensus figures. Specifically, Scemblix shows potential given its $3 billion-plus possibilities. Historical data indicates imatinib's global sales reached $4.4 billion. The existing medicines alongside new ones we expect to introduce in 2024 and beyond, position us to close that gap. Beyond that, we have multiple initiatives with significant multibillion dollar potential that can prove to be transformational for our company over the next decade.

Thank you.

Next question, operator.

Thank you. Your next question comes from the line of Richard Vosser from JPMorgan. Please go ahead.

Hi, thanks for taking my questions. Maybe a question on pelabresib. Could you give us an update on your thinking around the filing? What extra data do you need to file with the product? What sort of conversations are you having with regulators around that one? Thanks.

Yes, thanks, Richard. We're in the process of completing the acquisition under German takeover laws, so I can't give you too much insight. However, we are awaiting 48-week follow-up data, which will help us understand the product profile more precisely. We have had good discussions with both the EU and FDA to obtain this data. This will help me clarify what will be required in different geographies to bring the medicine forward for patients with myelofibrosis. We remain excited about it. We still need to complete data analysis to finalize our filing plans.

Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead.

Hi, thanks for taking my question. I want to return to Pluvicto, if I can please. Just to understand you talked about some of the barriers in terms of gaining share in some of the sites. I'm curious just regarding the referral pathway and what you're seeing there. If you're starting DTC, it would suggest you have confidence that some patients, particularly in the community, can get into specialized centers for the VISION indication. Can you discuss your confidence in that referral pathway and whether the patient-ready dose could be a limitation for the VISION population, or is that more geared towards PSMAfore for future use?

All very good questions, Peter. Regarding referral pathways, we feel we’re making headway. However, community oncologists tend to cycle through chemotherapy and potential ARPI before moving to Pluvicto due to unfamiliarity. Our goal is to increase physician education through our field force and engage patients to facilitate referrals. The patient-ready dose supports centers with high utilization and helps reduce treatment prep time, allowing them to take on more patients. This aspect is crucial as we prepare for PSMAfore where the number of patients increased significantly. We believe that when patients arrive earlier for treatment, outcomes will improve, helping us achieve our multibillion-dollar potential. Additionally, we are also seeing success in Germany and anticipate robust activity in the European and Asian markets, as we expand our capacity to treat patients effectively.

Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.

Hi, good afternoon. Just on capital allocation. You've maintained a disciplined approach in terms of what valuations you're paying for M&A and what returns you're looking at. When you're in competitive situations, can you give us color on whether competitors are behaving similarly? If not, what tools do you have to work around that?

Yes, thanks, Rajesh. There is variability in capital discipline among competitors. I think over seven years as CEO, I have learned the value of playing the long game. Staying disciplined pays off. We’ve shifted toward mostly sub-billion-dollar deals and only a few larger bolt-on acquisitions. We aim to adhere to our financial measures and walk away if we're outbid. We have a $10 billion share buyback program still underway. If attractive opportunities arise, we'll pursue them, but we prefer not to enter bidding wars where the target valuation exceeds our assessments.

Thank you. Your next question comes from the line of Jo Walton from UBS. Please go ahead.

Thank you. My question comes back to Pluvicto, if I could. Just to look at the number of cycles that a patient is actually taking up. I know the maximum is six. If you could tell us what you think the level is today. I think it is quite a bit below six. How should we think about that going forward into new indications? Do you think you will be able to expand the number of cycles?

Yes, Jo. Right now, we're at three to four cycles per patient, primarily due to patients getting referred too late, and that affects their outcomes. If we get to earlier indications, it should resolve itself, and more patients will complete their six cycles. Moving towards the PSMAfore population, where patients are healthier, we can expect higher numbers of cycles. This change will support our growth aspirations for both the VISION population and for new indications to drive Pluvicto's future growth. Next question operator.

Thank you. Your next question comes from the line of Tim Anderson, Wolfe Research. Please go ahead.

If I could come back to IRA. There's no formal gag order preventing drug companies from talking about price negotiations that are ongoing. Yet CMS seems to be telling all the companies to basically keep quiet, and all companies are obliging. I'm trying to determine why. One could read into this that CMS doesn't want companies saying it's no big deal, because that would detract from a later announcement about the big concessions that they could achieve. Can you share your thoughts on this landscaping of the IRA?

Yes, I unfortunately lack insights on CMS's reasoning. However, I can state that these discussions are ongoing. The price-setting process isn't a negotiation; it's simply set by the government. A potential short-term management of first drugs will spiral into challenges once hundreds of drugs are on the list, especially those earlier in their life cycles. The announcement of price concession will matter greatly. The way companies will manage this will naturally deter them from small molecule drugs aimed at the elderly, thus impacting patients requiring oncology or certain cardiovascular medications. I believe this is a critical point policymakers need to recognize. Additionally, we have factored IRA into our midterm guidance. We're advocating for policymakers to correct this legislation, including the initiatives targeting at increasing exclusivity for genetic targeted therapies. There’s bipartisan support on these bills, as well as others on multiple rare diseases for acquiring benefits. We remain hopeful about a legislative correction which would help mitigate negative effects on innovation. Next question operator.

Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead.

Hi, yes, just one quick question for me on remibrutinib. The delay of the filing in CSU into next year, referencing a few CMC adjustments. I wonder if you could provide more detail on that, what's required, and how long the delay might be?

Yes, absolutely, Kerry. In finalizing our manufacturing process, we determined a need for adjustments in a step called nano-milling to ensure optimal product profile. We need to generate stability data, and this timeline impacts our filing period. We're hopeful to finalize this package soon and push for filing in early next year. We possess multiple PRVs and can utilize them for the application process. Our goal is to make remibrutinib available for patients in the U.S. and eventually worldwide.

Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.

Thanks for the question, Vas. As you look at the growth opportunities in the industry, and across oncology, immunology and cardiovascular metabolic disease, one area that Novartis isn't currently present in is obesity. Given your background in immuno-oncology, what's your perspective on the opportunity for a late entry into the obesity market? Also what might Novartis do to approach this strategically?

Yes. Seamus, it’s something we've thought about. Addressing obesity presents an opportunity for significant health impact across many conditions. However, the current GLP, GIP, and GIPR classes already have strong incumbents. Coming in with fast followers is difficult, especially with high rebates expected later in the decade. We choose not to participate in that space as we can utilize our expertise and focus on next-generation medicines targeting new mechanisms rather than coming late with similar existing options. We’re inclined toward developing long-acting agents, either through biologics or siRNAs, that could provide advantages such as dosing convenience or tolerability. We recognize the impact obesity has on conditions like cardiovascular disease and want to remain focused on breakthrough opportunities in underserved markets where we believe significant growth exists ahead.

Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.

Hi, good afternoon. Just on capital allocation, you have maintained a very disciplined approach in terms of what valuations you're paying for M&A as well as what returns you're looking at. When you are in competitive situations, can you give us some color if your competitors are behaving in a similar way? And if they are not, what are the tools you have to work around that?

Yes. Thanks, Rajesh. There's variability in capital discipline across companies, but we’ve maintained our strategy of focusing on long-term positioning. Over seven years, we have learned to play the long game and accept that staying disciplined pays off. Most of our recent efforts have targeted smaller acquisitions under $1 billion. When larger opportunities arise, we analyze them alongside our financial measures, only pursuing those meetings our thresholds for expected returns. We’re prepared to walk away if we encounter bids that exceed our valuations.

Thank you. Your next question comes from the line of Jo Walton from UBS. Please go ahead.

Thank you. My question comes back to Pluvicto, if I could. And just to look at the number of cycles that a patient is actually taking. I know the maximum is six. If you could tell us what you think the level is today. I think it is quite a bit below six. And how we should be thinking about that going forward into new indications? Do you think you are going to be able to expand the number of cycles? Many thanks.

Yes. I think, Jo, thanks for the question. So right now, we're at three to four cycles per patient, which is really because – especially in the community setting, we're seeing referrals that are too late, and we would really like to push the referral rate earlier. Patients might not finish their six-cycle course due to late referrals and that ultimately affects outcomes. However, as we advance to the earlier lines, we expect more patients to complete their entire course of six cycles. In the PSMAfore population, we expect healthier patients, so we should see more of them completing six cycles. This is not only useful for driving growth aspirations for Pluvicto in the VISION population but also for new indications that drive future growth.

Thank you. Your next question comes from the line of Tim Anderson, Wolfe Research. Please go ahead.

If I could come back to IRA. There's no formal gag order preventing drug companies from talking about price negotiations that are ongoing. But CMS still seems to be out there telling all the companies to basically keep quiet about it and all the companies are obliging. I'm trying to figure out why. One could read into this that CMS doesn't want companies saying, oh, it's no big deal. We can manage it, because that would take away from a later announcement by them about the big price concessions that they've been able to achieve. So can you kind of share your thoughts on that one aspect of IRA? Thank you.

Yes. I don't know - I don't have much insights on that, Tim, unfortunately. But what I can say is that these are ongoing discussions, the price setting - we continue not to call it a negotiation, the price-setting process is one that has had multiple rounds. And I think often in these situations, there's no benefit for us to particularly go public as we continue to try to finalize the discussions and take it from there. I think the reality is in this initial round from my two cents, I don't - I can't speak for CMS. But in this initial round, you have a set of medicines that are close to - relatively close to LOE, and because of that, companies that are in generic entries within a certain period of time, and so probably many companies would say this is all manageable, because it's relatively short-term. When you start getting hundreds of drugs on this list, and you have drugs that are earlier in their life cycle in areas where you need more time to actually generate the peak sales and the return, I mean, this compound gets uglier and uglier. So I think it's just important for all of us to keep pushing the government to fix the legislation. 13 years, 15 years is manageable. 9 years for a small molecule, depending on the indication or the ability to go into multiple indications, or multiple cancer types, is a challenge. And the way the industry will manage it is we'll just shift away from small molecule drugs for the elderly, which means patients with oncology conditions and neuroscience conditions and certain cardiovascular conditions will suffer. Next question, operator.

Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead.

Hi, yes, Kerry Holford, Berenberg. Just one quick question for me on remibrutinib. The delay of the filing in CSU into next year, you referenced a few CMC adjustments. So I wonder if you could provide a little more detail on that, what's required and how long the delay is likely to be? Thank you.

Yes, absolutely, Kerry. So in the process of finalizing our manufacturing process, we've determined that a single step in the process called nano-milling, for those who are interested in some adjustments in terms of time and temperature to make sure that the product profile is optimal. So we're making those adjustments. And once we make those adjustments, as was the case with Kisqali, we made those adjustments. We have to generate stability data. And so, the time to generate the stability data then drives the timeline for the filing. We're certainly hopeful that we can get that stability package put together ASAP and then get the file in, because we were ready to go in the filing. And unfortunately, found this at a relatively late stage. So our hope is to file in the earlier part of next year and then get an approval quickly thereafter. We certainly have many PRVs in hand. We have not determined at which ones we'll use; we certainly have the capacity to use PRVs. So we hope to be able to close the gap then and make remibrutinib available for patients in the U.S. and then eventually around the world.

Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.

Thanks so much for the question. So Vas, the question is really for you strategically, as you look at the growth opportunities in the industry and across the industry, oncology, immunology, and now cardiovascular metabolic disease are all core therapeutic areas. One area that Novartis is not currently present in is obesity. You've been in a position to think strategically and act strategically in immuno-oncology, perhaps with disappointment. Just interested to get your thoughts on the opportunity for a late entry into the obesity market, and how Novartis could potentially, or would potentially make sense of that strategically, whether with existing assets or only as a completely novel approach or novel mechanism moving forward? Thanks so much.

Yes. Thanks, Seamus, for the question. As you can imagine, it's something we put a lot of thought into and have looked at many of the opportunities that are out there. To address obesity, which clearly had the opportunity to have a significant health impact, not only on obesity but many related conditions that are continuing to see in the data. Our view is with the current GLP, GIP, GIPR oral and injectable class of medicines. They're going to be very well served by the two leading incumbents who are doing extremely well in the market and are rapidly developing follow-on agents. And so to come in with fast follower or two medicines, even with modestly differentiated profiles, will be difficult, and that’s due to high levels of free drug given the sheer size of the rebates in the future. So we choose not to participate in that. Insofar as we might need one of those assets as a combination asset for our own portfolio, but rather our core focus is thinking about next-generation medicines to address obesity or related conditions in cardiovascular health. This includes more long-acting agents or siRNAs that offer unique mechanisms of action. We believe there could be centrals acting mechanisms that don't directly target the pancreas, but instead, target the central pathways. These are all areas we're actively exploring. What we know is that there are plenty of other areas of medicine that are underserved, and we see ample opportunity for us to drive dynamic growth in those fields. Next question, operator.

Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.

Hi, good afternoon. Just on capital allocation. You have maintained a very capital disciplined approach in terms of what sort of valuations you're paying for M&A as well as what sort of returns you're looking at. When you are in competitive situations, can you give us some color if your competitors are behaving in a similar way? If they are not, what are the tools you have to work around that?

Yes. Thanks, Rajesh. I think, obviously, I don't want to comment on specific competitors, but I'd say there's variability in terms of capital discipline. I think now seven years in the role, I’ve learned the value in playing the long game, staying disciplined. In the end, information asymmetry is a huge disadvantage whenever you do external deals. When you look at the dynamics on capital discipline, you've seen us shift to again, mostly deals sub-billion dollars. And if anything, a handful of larger bolt-on deals. We try to stay disciplined against our financial measure. If we are outbid and it's not within our envelope, we just walk away, and we're okay with that. There will be other opportunities that come, and rather use our capital to buy back our own shares.

Thank you. Your next question comes from the line of Jo Walton from UBS. Please go ahead.

Thank you. My question comes back to Pluvicto, if I could. Just to look at the number of cycles that a patient is actually taking. I know the maximum is six. If you could tell us what you think the level is today. I think it is quite a bit below six. And how should we think about that going forward into new indications? Do you think you are going to be able to expand those cycles?

Yes. Jo, thanks for the question. So right now, we're at three to four cycles per patient, primarily due to referrals that are too late. Patients might not complete their six cycles because they have been treated with chemo too long. However, as we move to earlier indications, we expect this situation to improve, and more patients will finish their six-cycle course. With the PSMAfore population being healthier, we expect a higher rate of completion. This change is beneficial for both the VISION population and future indications to drive Pluvicto's growth.

Thank you. That will conclude today's conference call. Thank you for participating. You may now disconnect.