Good morning and good afternoon, and welcome to the Novartis Q4 Full Year 2025 Results Release Conference Call and Live Webcast. 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, Sarah. Good morning and good afternoon, everyone, and welcome to our Q4 2025 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. Please refer to the company's Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors. The discussion today is not a solicitation of a proxy nor an offer of any kind with respect to the securities of Avidity Biosciences or SpinCo. The parties have filed relevant documents with the U.S. SEC, including a proxy statement for the transactions and a registration statement for the spinoff. We urge you to read these materials that contain important information when they become available. Before we get started, I also want to remind our analysts to please limit yourselves to one question at a time, and we’ll cycle through the queue as needed. And with that, I will hand over to Vas.

Terrific. Thank you, Sloan, and great to be with everyone today. With me in the room are Harry Kirsch, our Chief Financial Officer; and Mukul Mehta, our Chief Financial Officer, Designate, who will be taking over for Harry in mid-March. So let's dive into the results. And when we start on Slide 5, Novartis delivered high single-digit growth, as you saw earlier this morning. Importantly, we achieved our 40% core margin goal 2 years ahead of plan, and I think that demonstrates the strong operational performance of the company. On the full year, our sales were up 8%. Core OpInc was up 14%, and as I mentioned, the 40.1% core margin, $21.9 billion now on Core OpInc. I think it's significant growth over the years. In the fourth quarter, sales did decline, impacted by both the gross to net, which we'll talk about a bit more as well as the Entresto LOE, and Core OpInc is up 1%. We did have some important pipeline highlights, which we'll cover over the course of the call, but I think a few I wanted to highlight upfront. First, remibrutinib, we achieved the submission in the most common type of chronic inducible urticaria that was based on positive Phase III results as well as interactions with the FDA. And we'll have the remaining readouts for the two other subtypes of chronic inducible urticaria over the first half of this year. And with pelabresib, we now have a path forward for both the EU and the U.S. I’ll go through that data and the path forward on a future slide. Overall, we met our upgraded full year 2025 guidance. We expect to grow in 2026 through the largest patent expiry in Novartis' history, which I think demonstrates the strong performance we have on our key growth brands as well as our pipeline replacement power. Now moving to Slide 6. The growth drivers in the quarter continued their strong trajectory as well as on the full year. Here, you see the full year numbers. You can see Kisqali was up 57% on the full year. Kesimpta was up 36%. Scemblix up 85%; Pluvicto on the PSMAfore launch, having dynamic growth as well. We'll talk about each of these brands in turn. Overall, a 35% growth in this portfolio, and this is a portfolio that will carry us through the end of the decade as well with many of these brands taking us into the mid-2030s. Now moving to Slide 7. On Kisqali, we grew 57% in the quarter on the year to $4.8 billion, outpacing the market for CDK4/6. Now when you look at the chart on the lower left, our growth was 44% in Q4. When you remove the U.S. RD adjustments, our global sales grew at 54% and our U.S. sales growth was at 62%. So in our view, versus the consensus, the entire miss really came from these onetime RD adjustments. We remain fully confident on the $10 billion peak sales outlook for the brand. And what's underpinning that confidence is the very strong volume growth we're seeing across geographies. When you look at the middle panel, U.S. eBC NBRx is now above 60% and holding steady. I think that really demonstrates the strong preference providers have for Kisqali, particularly in settings where we are uniquely positioned. And in Germany, we have over 80% NBRx share in the early breast cancer setting, which I think shows again this early strong performance for the launch in Germany, which we hope to carry over now to other ex U.S. markets. So going to the last panel, I already went through many of the key elements, but I wanted to also note that eBC NBRx share is leading in both the overlapping and the exclusive population. Outside of the U.S., we have important launches in Italy and Spain coming up in 2026. Finally, we continue to bolster the data profile for Kisqali, both with data that we recently presented at San Antonio and ESMO. We'll continue to follow up these patients over the long run, and that should enhance our portfolio. So very excited. Kisqali has the outlook to be the largest brand in Novartis' history. Now moving to Slide 8. Kesimpta grew 36% to $4.4 billion on the year. You can see the continued steady performance of this brand, driven by the continued expansion of the B-cell class within MS. In the U.S., we had 27% growth in Quarter 4. Importantly, we see increasing adoption in naive patients, which are now 50% of our NBRx in first line. Outside of the U.S., we are leading now with NBRx share in 9 out of the 10 major markets that we track. The core opportunity we see ex U.S. going forward is to continue to expand B-cell therapies in the 67% of patients who are not on B-cell therapies and receiving disease-modifying therapies in MS. We continue to generate additional value for Kesimpta. We continue to progress also our every 2-month formulation for Kesimpta. We’re on a solid track with this brand to fully achieve our peak sales guidance of $6 billion plus. Now moving to the next slide. Pluvicto is showing dynamic performance with the PSMAfore launch, at a 42% constant currency growth. We reached $2 billion in sales now overall globally, and that strong performance was driven primarily in the U.S., where we continue to see strong uptake in the pre-taxane setting. Sales grew 75%. We saw a 4x increase in our PSMA share since approval, now reaching 16% in that setting. We also see continued growth across provider settings, including the highest growth in the community, where we now have over 790 treatment sites. Outside of the U.S., importantly, we've secured approvals in Japan and China, which also allowed us to continue to drive that ex-U.S. strong growth. We expect that growth to accelerate now with the Japan and China launches upcoming. The next phase for Pluvicto is the launch in the hormone-sensitive setting, which adds about 75% additional patients to those we already have in the VISION and PSMAfore populations. That sNDA has been submitted to the FDA, as well as the NMPA in China and PMDA in Japan. We have the right foundation for that launch to be, we think, a rapid uptake with 2/3 of eligible hormone-sensitive patients already with existing treaters or providers. So the capacity is well established. I did want to flag that we have new manufacturing sites that are coming online in California, Florida, as well as in Japan and China. We have over 440 treatment sites now outside of the U.S. as well. So we've really taken this to scale, which positions us well for the Pluvicto launches, ongoing Lutathera business, as well as our future RLT portfolio. Now moving to Slide 10. Leqvio reached blockbuster status in the quarter, an important milestone for this brand as we continue the steady trajectory we often see for cardiovascular launches, with 57% growth on the full year and 46% on the quarter. In the U.S., we continue to outpace the overall advanced lipid lowering market. Our real focus is increasing depth in the health systems we prioritize where there are strong capabilities within the buy-and-bill setting, and strong interest in getting patients to goal, also focusing more on specialty areas as we've guided in the past. We saw a 33% growth in that setting versus the prior year. A key milestone for us outside of the U.S. will be the NRDL listing, which we achieved in China and started in early January. As you have heard on previous calls, we have had a strong uptake in China in the private setting. Now with the NRDL listing, the early signals are indicating a rapid uptake in the China market for Leqvio. We're quite excited about that, and it is a key focus area for us in 2026. We continue to build the evidence base for Leqvio, with important publications in various journals, mostly focused on adherence rates as well as our ability to drive LDL-C down to goal regardless of which background therapy patients are on. Now moving to Slide 11. Scemblix had another strong quarter. We've reached blockbuster status with this brand, and we have NBRx leadership in the U.S. and Japan, with 87% growth in Q4. If I could focus your attention on the middle panel in the U.S., we've reached 41% NBRx share across all lines of therapy, and we plan to continue to grow that. The most important thing for us now is to drive the growth in the first-line setting where we're trending ahead of our plan. We're already now in the mid-20% range in the frontline setting. We want to drive that up. As we've now secured broad access, we have the opportunity to continue to make Scemblix the medicine of choice on the front line for patients with TML. Outside of the U.S., we also continue to have our leadership in the third-line setting with a 72% share across the major markets that we track. The early line indication is now approved in 60 countries, and we've already launched in Germany. We expect to get other EU markets online in the frontline, with launches expected in 2027. One ex-U.S. market to note, which shows the capability we have to drive Scemblix outside of the U.S. is in Japan, where we already have a 45% frontline market share—NBRx share, and a 74% second-line NBRx share. So a really strong outlook, confident in the $4 billion-plus outlook for this medicine. Now moving to Slide 12. Cosentyx grew 8% overall in the year, reaching $6.7 billion on the steady march up to our $8 billion peak sales guidance, with 11% growth in the quarter. In the U.S., we had 9% growth, driven by higher demand we saw both in hidradenitis and in IV. We're the #1 prescribed IL-17 across indications, and that's really because of the strong access we have. In HS now, we are the NBRx leader in naive patients with a 51% share and 47% overall. The naive market is 2.5 times the switch market. We've certainly seen our competitor gain traction in the switch market, but we're very much focused on that naive market where we have a really strong position. The IV is also steadily advancing at 8% growth, adding 200 new accounts, and we expect that to continue over the coming years. Outside of the U.S., no major changes, with continued strong growth, leading originator biologics in the EU and China. Overall, we would forecast Cosentyx to have, on average, mid-single-digit growth over the coming years as we work towards that $8 billion peak sales potential. I want to also flag that we've completed our submission with the U.S. FDA for polymyalgia rheumatica, and we're excited about that as an additional launch now for Cosentyx. We’re also on track to file in the EU and Japan in the first half. Now moving to Slide 13. Our renal portfolio has continued its rollout, I think, with steady progress. Separate from that, we also have amended our zigakibart Phase III protocol, which I wanted to talk about in a bit more detail. Starting with our renal portfolio, our IgAN portfolio contributed 50% of the NBRx market growth versus prior year, driven equally by Vanrafia and Fabhalta. We see steady uptake across these two brands. Also in C3G, we've seen continued steady adoption across the top accounts. We hope to see that accelerate now over the course of 2026. Outside of the U.S., Fabhalta is now approved in C3G in 45 countries. Vanrafia had its EU submission. Across these three brands, we have the opportunity to continue to build out a strong position. We expect to provide the full data set on the Fabhalta eGFR readout in IgAN soon and also move forward with the filing for full approval in IgAN for Fabhalta. We also expect the Vanrafia full eGFR dataset in the first half. Now on zigakibart, we've made the decision to optimize the overall label positioning and competitive positioning to align our UPCR readout with the interim eGFR readout, which we expect in the first half of 2027. This supports our BLA for full approval. This decision was based on our analysis of the Phase I and II data. We believe we have the opportunity to be second to market with both proteinuria and eGFR benefit, and that positions us well to have a fourth renal agent in our portfolio. We also have combination trials underway because we see the opportunity to have a hemodynamic agent, Fabhalta and zigakibart, to optimize care for these patients. Now moving to Slide 14. Rhapsido's U.S. launch, which is obviously something we're closely tracking, is delivering encouraging results. We are optimistic with what we're seeing in the early days for this launch. We see strong demand with an encouraging mix of patients, both patients who are post-antihistamines as well as post-biologic failure. We have a strong and positive response from allergists and dermatologists. The sampling and bridge program has over 2,000 HCP starts. I believe that when we benchmark that versus other highly successful dermatology launches, it's in line with some of the most successful dermatology launches. We're also seeing early access wins. Access will now be the gating factor. Every few months, we expect to bring on additional access, which will allow a steady pickup in sales over the course of the year, with more of a steady pickup in the second half of the year. For that second half, I would encourage everyone to watch as we get that access together. As a reminder, clean safety, no box warnings, no contraindications, no required routine lab monitoring, no liver safety issues in the label, and fast relief across a broad population as fast as two weeks. Anecdotally, we're hearing reports as fast as a day or two that patients are starting to see benefits. It's the only oral therapy approved by the FDA for patients who remain symptomatic despite antihistamine therapy. Now moving to Slide 15. Rhapsido is a brand that we hope could become one of the largest in Novartis' history over time. There is an opportunity across multiple indications. I mentioned the CSU launch, and we have positive data for CIndU, with two more types coming and an HS readout expected in 2028. We also have positive food allergy data, which we will present in Q1 of this year, leading us to initiate a broad Phase III program in food allergy. We are on track for the RMS readout in the second half of this year, but the real opportunity lies in the upcoming results from the two RMS studies, SPMS, and myasthenia gravis, which are ongoing and expected in the middle of this year. When you consider all these factors, there is a clear opportunity for a medicine with a clean safety profile and strong efficacy as an oral option, suggesting significant long-term sales potential. Now moving to Slide 16. Itvisma, which we haven't given as much attention to, but we believe it has a significant overall sales potential, with a total potential for this brand across the IV and IT being $3 billion plus. This is a U.S. approval that brings one-time gene therapy in children aged 2 years and older, with a broad label across patients who are non-sitters, sitters, and walkers, and no AAV9 antibody titer limit for this treatment. There's a strong value proposition, with single administration, durable efficacy, and a solid safety profile. We see a multi-blockbuster opportunity for this brand. Seven thousand five hundred children, teens, and adults have not yet been treated with Zolgensma IV. We also have extensive experience in the U.S. and ex-U.S. with this medicine. Outside of the U.S., we've already been approved in the UAE one day after FDA approval, and Europe and Japan submissions are completed. For Zolgensma, our sales are actually larger outside of the U.S. than in the U.S., so there's certainly a significant opportunity ex-U.S. for Itvisma. Now moving to Slide 17. As I mentioned on the first slide, for pelabresib, we read out in the quarter 4, the 96-week data from the Phase III MANIFEST program, which both on safety and efficacy has now given us a path forward to believe we can get this medicine registered, assuming successful regulatory and clinical trial Phase III trials. In that study, we showed deep and durable responses and a comparable safety profile to ruxolitinib in myelofibrosis. You can see the data here on the left in terms of the spleen response. When you look at the data that we presented, we had deep and durable spleen volume reduction for the spleen volume, a 35% reduction landmark, 91.5% versus 57.6%. We also saw sustained improvements in symptom scores and anemia. We had twice as many patients reaching goal with the spleen volume reduction and the TSS50. We believe this medicine has disease-modifying potential. We saw improvements in bone marrow pathology on the anemia. There were, importantly, fewer deaths and progressions observed with pelabresib and ruxolitinib versus ruxolitinib alone. The overall safety has proven comparable with ruxolitinib, including comparable leukemic transformation rates, which was one of the topics that held this program back. With this data set, we have an agreement with the EU to file in 2026 based on this data. In the U.S., China, and Japan, we'll be starting a new Phase III study focused on patients who have high TSS50 at baseline, where we believe we have the data set now to show we can achieve the regulatory milestone to ultimately get approval. Now moving to Slide 18. I want to take a moment to mention our impact on global health. As many of you know, Novartis has been in global health for nearly 100 years, working on malaria and other neglected tropical diseases. With our Coartem medicine 25 years ago, we started a real sea change in the treatment of malaria, reaching now well over 1 billion patients with Coartem. With the recent data we presented in November, we have the opportunity to bring the first new malaria medicine in 25 years. This is KLU156, ganaplacide plus lumefantrine. It disrupts the parasites' internal protein system, with very positive data here showing on an adjusted basis, 99.2% cure rates versus 96.4% versus a 5-day course, offering a chance to block transmission with a very solid safety profile. We're quite excited to bring this forward as part of our mission in global health. Now moving to Slide 19. Taken together, it's been a very good year for us from a pipeline standpoint in 2025. You can see we met the vast majority of our milestones and trial starts. That shows the strong execution machinery we have now in R&D at the company, which is very aligned across research and development and strong execution across our global development organization. Turning to Slide 20. For 2026, we're on track for seven pivotal readouts with the potential to strengthen the midterm outlook we're guiding to, including the mid-single-digit sales growth we expect in the 2030s. A few particular readouts that I haven't mentioned, which I'll call out. On the left side, you can see pelacarsen for CVRR. We expect to read out the middle of this year. It will be in the second half, but it will be in the middle of this year, which, if positive, would allow us for a U.S. submission this year. We're also on track for our submissions for Ianalumab in Sjogren's disease, as well as the Del-zota DMD U.S. submission, assuming the closure of the Avidity deal, which would also happen in the first half of this year. These pivotal readouts I mentioned, Ianalumab in hematology could have significant potential to drive that brand to very large long-term potential. Of course, remibrutinib as well as the Del-desiran DM1 Phase III readout, again, assuming the closure of Avidity. We also have the additional readout of the DUX4 interim data readout as well, which could support accelerated launch in FSHD; however, that we would characterize as an upside case. A number of key study initiations you can see on the right-hand side of the chart. It’s another exciting pipeline year to continue to bolster our long-term growth profile. Now moving to Slide 21. I will hand it over now to Harry.

Yes. Thank you, Vas. Good morning, good afternoon, everybody. I now walk you through our financial results for the fourth quarter and the full year of 2025, which, as Vas mentioned, was very strong despite midyear significant U.S. generic entries. As always, my comments refer to growth rates in constant currencies unless otherwise noted. On Slide 22, 2025 marked another year of excellent execution. Over the last five years, as you can see here, we delivered an 8% sales average growth rate and a 15% core operating income average growth rate, driven by strong commercial execution, great late-stage readouts, and disciplined productivity programs. This translated into more than 1,000 basis points of core margin expansion in constant currencies. As you can see, in reported currencies, it allowed us to reach our midterm core margin target of 40% two years earlier than planned. As you may recall, we initially planned for 2027. With these results, I hope you agree that we have really elevated the company to a new level of sales performance, margin profile, and as I'll discuss later, free cash flow generation. On Slide 23, just a quick summary. You see that we have delivered our full year guidance in 2025 after upgrading twice throughout the year, and we guided to high single-digit sales growth, and we delivered 8%. For core operating income, we guided to low teens and achieved 14%. This is a strong result in the year, as I mentioned, where U.S. generic entries for Entresto, Promacta, and Tasigna happened, and it really speaks for the momentum of our priority brands, as Vas already laid out, as well as disciplined cost management. Turning to Slide 24. Here, you see our continued progress on free cash flow generation, which reached $17.6 billion, an all-time high for the company in 2025. This also shows the financial power of being a pure-play pharma company. As you know, many years back with six businesses, or even before the Alcon and Sandoz spin, these numbers were usually in the $10 billion to $12 billion range. Now this is the earnings power of a focused and very successful pharma business. We remain focused on ensuring that the growth in core operating income translates into high-quality earnings and strong cash flow generation. This robust cash flow allows us to reinvest in the business, pursue bolt-on acquisitions, and continue to return attractive capital to shareholders through growing dividends and share buybacks. On Slide 26, a quick reminder on our unchanged capital allocation strategy. We continue to execute our balanced shareholder-friendly capital allocation in 2025. We invested more than $10 billion in R&D, an 8% increase versus the prior year, announced four acquisitions, and 10 licensing deals, strengthening our key platforms and pipeline across all of our four therapeutic areas. On returning capital to our shareholders, we completed our $15 billion share buyback program in early July and launched a new up to $10 billion program, targeted to be completed by the end of 2027. Approximately $7.7 billion of that remains to be executed. Additionally, we distributed $7.8 billion in dividends during the first half of 2025. Now speaking of dividends, turning to Slide 27, we are proposing a dividend of CHF 3.70 per share, a 6% increase in Swiss francs and even double digits in dollars. It’s our 29th consecutive dividend increase in Swiss francs since company creation in '96, including years following the Sandoz and Alcon spins when we did not rebase the dividend at all. This reflects our long-term and long-standing commitment to a growing dividend in Swiss francs per share. That concludes my remarks. Before handing over, I'd like to briefly acknowledge that this will be my final earnings call as CFO of Novartis. It has been a privilege to serve in this role over the last 13 years and to work alongside Vas and so many other great colleagues to help guide the company through a period of significant transformation and performance improvement. I'm very pleased to hand over to Mukul, a long-time colleague. We both started at Novartis in 2003 and have worked together intensively, especially in the last 10 years. With that, I turn it over to Mukul to take you through 2026 guidance.

Yes. A big thank you to you, Harry, for everything. It's an honor to step into the role that you're leaving me with, and I look forward to getting to know everybody on the line in the months to come. If you can go to Slide 29, please. For 2026, we expect sales to grow low single digits and core operating income to decline low single digits. This reflects the 1 to 2 percentage points of core margin dilution related to the Avidity deal that we had previously indicated. Importantly, in 2026, we will be growing top line through a period of highest GX impact in our company’s history. At the same time, we will ensure that we continue to invest in R&D. We fund our launches appropriately while driving forward with the productivity improvement plans that the company has. As previously noted, we expect to close the Avidity deal in the first half of 2026. Looking ahead, we remain very confident in our 5% to 6% sales CAGR in the '25 to '30 period, and we expect to return to 40% plus core margin in 2029 as laid out in our Capital Markets Day. For 2026, we expect core net financial income expenses to be around $1.7 billion. This is higher than the '25 levels due to the anticipated funding costs related to the Avidity deal, which we have previously indicated is primarily going to be debt funded. We also expect the core tax rate to remain around 16.5%. Moving to Slide 30, please. As we have previously indicated, 2026 is going to be a year of two halves. We continue to expect strong volume growth from our priority brands throughout 2026. But we have to understand that in the first half of the year, we will have a tough prior-year base with Entresto, Promacta, and Tasigna generics having entered the U.S. market in mid-2025. With that, we expect the first half of the year sales to decline low single digit and core operating income to decline low double digits. Additionally, Q1 will be impacted by the 2% positive gross to net impact that we had in the base Q1 '25, which will weigh on the quarter-on-quarter growth rate in Q1. That said, in the second half of the year, we expect clear improvement with sales growing mid-single digit and core operating income growing mid- to high-single digit. This takes us to our full-year guidance of low single digit on the top line. Moving to Slide 31, please. If exchange rates remain as at their late January levels, we expect a positive 2 to 3 percentage point impact on our full-year sales and a positive 1% point impact on core operating income. As a reminder, which Harry had conveyed previously, we publish updated FX estimates monthly on our website. That concludes my remarks, and I hand it over back to Vas.

Yes. Thank you, Mukul. I want to take a moment as well to acknowledge Harry Kirsch's incredible contributions to Novartis over 23 years. Over my tenure as CEO, now entering my ninth year, Harry has been by my side as we've transformed the company into a pure play, which I think has unlocked really outstanding shareholder returns and outstanding financial performance. But probably less visible is the strength of the finance organization Harry has built and the culture he’s created in the company around productivity, financial discipline, and operational excellence. He'll surely be missed but will continue his legacy in the years to come. A big welcome to Mukul, who I've known for many, many years. He will be a great addition to the team and continue the strong track record of Novartis finance and delivering strong operational execution. Now moving to the next slide. I do want to take a moment to build on Mukul's comments on our confidence in our 5% to 6% sales CAGR to 2025 to 2030. That includes the impact of Entresto in 2026 as well as the U.S. MFN agreement impact. You can see in the chart, we expect some generic impact. So a lot of that is front-loaded in the early part of the 5-year trajectory here. A number of brands where we believe we can drive dynamic growth in the middle column. Lastly, a strong set of assets that we probabilized in our pipeline. This ranges from lanalumab, our various Pluvicto and actinium PSMA, pelacarsen, as well as the Avidity assets, among others, which give us the opportunity to not only hopefully deliver the 5% to 6% but if we're successful with those pipeline assets, we could drive even higher growth in the period. Moving to Slide 34, in closing, strong performance in 2025. We delivered the guidance that we outlined and reached our 40% core margin early. Our priority brands continue to outperform, and that's what's going to drive our growth through the second half of '26 and through the next five years. We're advancing the pipeline meaningfully in 2025 with seven pivotal readouts this year. We're confident in that mid- to long-term growth guidance. With that, we can close this section and move to questions. Operator, we could open the line. Thank you.

We'll start with our first question, and this is from Sachin Jain from Bank of America.

Perhaps I'll just kick off by thanking Harry for support and insight over the years. The question, I guess, for that on remi. You talked about avoiding liver monitoring in MS given no Hy's law. Competition recently has been vocal about avoiding monitoring in the label when monitoring has been involved in the studies that could be difficult. So I wonder if you could just give us any color on FDA conversations around this topic and whether monitoring in the studies picked up events that required dose changes? And then a quick follow-on on efficacy. Any color on what you're targeting on relapse or progression given we have no Phase II to go here.

Yes, thank you, Sachin. Regarding liver safety, it's important to recognize that we already have an approved label that doesn't include any discussion about liver safety. This indicates that remibrutinib's structure does not possess the off-target toxicities associated with other molecules. Therefore, we had no liver safety concerns in the current TSU label. However, out of caution, and due to findings from other competitors, the FDA has requested limited liver monitoring, which is less extensive than what our competitors have implemented. We intend to advocate to the FDA for maintaining the current label, provided we continue to see no liver signals in our study. It's worth noting that with competitors, any Hy's law cases, whether one or several, lead to Risk Evaluation and Mitigation Strategies programs and monitoring due to the safety risks they pose for patients, especially since there are many alternative therapies available for RRMS. Safety is crucial, and we are confident in the overall safety profile of remibrutinib. Assuming we achieve two positive results from our Phase III trials this summer, it will be considered a significant advancement in treatment.

A quick follow-on on efficacy. Any color on what you're targeting on relapse or progression given we have no Phase II to go?

Yes. It's very fair to point out, we don't have Phase II data. We went to Phase III based on the findings we saw from competitors. Given that we know we hit the target well at 25 milligrams BID and we move up to 100 milligrams BID in the study, we think we’ll have strong target saturation. The molecule is well designed when we look at the PK and PD of it. This gives us confidence that assuming the class is effective against RRMS, we will have a compelling efficacy profile along with the established safety profile, providing a strong value proposition.

We'll take our next question today, and this is from Simon Baker, Rothschild & Co Redburn.

Two, if I may, please. Firstly, just continuing on remibrutinib. I wonder if you could give us your updated thoughts on the commercial opportunities here in MS because it kind of feels like your enthusiasm for remi in MS has increased over time. A couple of years ago, there was talk of MS being played second fiddle to CSU. So just updated perspectives on your thoughts on the commercial opportunity. And then moving on to pelacarsen. You've now guided to a 2H '26 readout. Given this is an event-based study, could you just give us any thoughts on potential risks and risk mitigation for this, given what appears to be a significantly lower event rate? Does this run the risk of creating additional noise in the study? Or is that more than offset by the powering assumptions and design that you've built in there? Any thoughts would be very helpful.

Yes. Thanks, Simon. First, on the commercial opportunity, our base case assumption is that an oral drug will struggle to have the same level of efficacy as monoclonal antibodies in hitting the B-cell pathways in MS. Because of that, B-cell monoclonal antibodies will likely remain the dominant class. However, there will be a large number of patients who would want an oral option and who do not want to go through injectable therapy. As I noted in my slide, 25% of patients in the U.S. and 65% outside of the U.S. are on DMTs and are not using B-cell injectable therapy. So there's a large market there on its own. It also depends if the efficacy and safety profile overall, particularly in the case of remi, proves compelling enough to capture a broader market. As for pelacarsen, we expect a mid-year readout. The study is tracking with the number of events we originally outlined. We had powered the study during the Phase III process. We feel like we’re adequately powered to demonstrate both at the 70 mg and 90 mg cutoffs the CVRR that we’re targeting. I don’t think there’s necessarily a risk associated with going in full. We suspect it has to do with the fact that we’ve optimally managed these patients for all other risk factors, particularly LDL lowering, which may impact event rates. We are excited to see this data and hopefully create an entirely new class of medicines that can help a whole patient group that currently has no other option.

And the next question today is from Matthew Weston, UBS.

Can I also add my thanks to Harry for his support and best of luck for the future? Vas, Kisqali is building into a fantastic and highly profitable medicine for Novartis. The only challenge is it has an LOE just after your 2030 time window. What are the options in-house to extend the franchise further in breast cancer? Given the SERD data we’ve seen from a competitor, what other options are there from BD that could potentially— or is oncology, I should say, a category where BD looks like somewhere you should supplement the Novartis pipeline?

You are correct; there are two questions there, but I'll take both of them, Matthew. With respect to Kisqali, we guide to a mid-2031 with the pediatric exclusivity we would expect for this brand in the U.S. We think it's longer outside of the U.S., depending on the market. Our core goal is continuing to advance our CDK2, CDK2/4, and CDK4 programs, which are now in the clinic and we’re advancing as quickly as we can to see which can provide additional benefit in the post-Kisqali setting or in combination. We also have our radioligand therapy portfolio advancing in HER2 RLTs and neobombesin RLT in breast cancer. With respect to BD and M&A, absolutely, we see amongst our therapeutic areas that oncology is a clear focus area. We will continue to prioritize oncology as we've had traction in cardiovascular, immunology, and neuroscience. We’ll pursue good opportunities and assets that align with our strategy to build oncology now that we have the scale from Scemblix, Pluvicto, and Kisqali.

Next question is from Peter Verdult, BNP Paribas.

Just on Rhapsido and ianalumab. Given we're in an MFN world, how should we be thinking about ex-U.S. launch plans for significant assets? I'm just pushing to see how specifically you're comfortable being about changing in rest of world launch strategies for important assets like ianalumab.

This is high on our minds. We are working through strategies for Rhapsido, given that it's already launched. We would be exposed on the first pillar of the MFN approach, which is limited. We think we have good options to manage the ability to launch Rhapsido globally. We expect tighter pricing corridors but feel we can manage this. Ianalumab, however, is complex as we shift towards launches in 2027 in the G7 countries. This affects the entire market of U.S. net price, not just Medicaid. We are developing strategies to ensure launches occur without adversely affecting the U.S. market. We will assess opportunities to price appropriately based on the value ianalumab brings.

Next question is from Steve Scala from TD Cowen.

On pelacarsen, Novartis has previously said that a delay in the HORIZON trial readout would stem either from overestimating the baseline risk or underestimating the treatment effect. Do you have a sense of what is at work here? If baseline risk is overestimated, it questions the value of lowering Lp(a). If Novartis should have better insight based on early studies, your view at this point would be helpful.

I wish we knew, Steve. I can only offer an opinion at this stage. We believe our baseline risk estimation was appropriate. However, there may be more risk associated with higher Lp(a) thresholds. Lp(a) risk appears to increase linearly at higher levels. We aim for a median of 108. We'd love for our treatment to have a greater effect than we expect, creating a larger risk of event rates, but we can't be sure at this time.

Next question comes from Richard Vosser, JPMorgan.

Just a question on Itvisma. How should we think about the ramp of that product in the U.S. and ex-U.S.? I could imagine there are some patients that might be waiting for the therapy. Have you seen warehouse patients? How should we think about the launch?

For gene therapies, we typically see a fast ramp as we move through the prevalent patient pool, and it usually settles down to a steady state. Over the next 2 to 3 years, we would expect Itvisma to penetrate the majority of relevant patient pools and then come down from there. We do have warehouse patients who we understand well. We believe we have strong access in many markets which should allow us to maximize the medicine.

Next question is from Graham Parry from Citi.

So I reiterate the best wishes for Harry, of course. Then a question on Kisqali and the outlook for the year. How much of the gross to net impact that was affecting the fourth quarter carries through into the next year because of a different channel mix versus how much is one-off? So to what extent does that give you an easy base for comparison in 2025 into 2026? Also, any thoughts you have on the risk that oral SERDs might pose to encroach on CDK4/6 combinations in the adjuvant setting?

I think the higher gross to net is a onetime effect where we saw higher Medicare utilization than we had forecast in 2025. We expect, as the early breast cancer launch continues to accelerate and our mix shifts to younger patients, this will net out back to where we historically expected. We should be fine from that point forward. Regarding the oral SERDs, we’ve had extensive discussions and feel confident that when reviewing the profile of Kisqali and feedback from physicians, they prefer a CDK4/6 inhibitor for patients who can benefit. They need to consider an endocrine therapy option; certainly, oral SERDs have the potential to become the standard of care in endocrine therapy. We know roughly half of patients in the early breast cancer setting in the U.S. are now on a CDK4/6, and we think this will maintain the opportunity to employ CDK4/6 therapy being the standard approach.

Next question today is from Seamus Fernandez of Guggenheim Securities.

I’ll echo, Harry, we’ll miss you for sure. Vas, hoping you could provide thoughts on the overall food allergy opportunity within your portfolio, where Xolair has done extraordinarily well. I’d like to understand your perspective, especially within your broader portfolio, not just the BTK.

We have a long history looking at food allergy, dating back to a medicine called QGE031, which was a high-affinity IgE. We were unable to show a stronger effect than Xolair in food allergy. Once we saw Phase II data for remibrutinib in food allergy, that changed our perspective. Now we're considering developing it as a significant market opportunity. We will share that data in the coming months, and with that, we see the possibility for a safe oral medicine given to patients who are often children at risk. We think this could be quite compelling. Overall, we see food allergy as a multi-billion-dollar opportunity with potential to make something major out of this.

Next question is from James Gordon at Barclays.

On pelacarsen, what does a win now look like? You talked about a lower event rate. What's the magnitude of efficacy? The design was for a 20% benefit in the broader population, a 25% benefit in a narrow population. Is that the minimum? Could a benefit not quite hit the mark still be commercially viable?

You’re correct, it is powered for 20% in the 70 mg per DL group and 25% in the 90 mg per DL group. We can win if we achieve a relative reduction that's lower than those targets. There is potential for commercial success even if benefits are not statistically significant, provided enough patients have no other options. We hope for a much higher CVRR impact at both cutoffs, but this will ultimately be data-driven.

Next question is from Michael Leuchten from Jefferies.

A question for Harry, please, given this is your last time with us. The SG&A expenses in the fourth quarter were extremely tight. Very good performance there, helped you to gear the margin in underlying terms. As I think about the margin for 2026, obviously, you do have Avidity dilution, but if that SG&A control continues, I struggle to see how you get as much dilution, especially if avidity doesn’t close as quickly as it could. So can you just talk about the repeatability of that SG&A performance in the fourth quarter into 2026?

Michael, any 2026 questions would be for Mukul. Historically, we always had a notable increase in quarter four, which we’ve now targeted in our efforts to avoid with extended holidays within the quarter. Mukul, your thoughts?

The SG&A cost control and productivity plans are something that has made us proud. As we approach the next 5-year journey, we'll continue this trend. Within the margin dilution prediction was accounted for, and we anticipate improvements in the second half of the year for operating income.

We'll take the next question, and this is from Thibault Boutherin from Morgan Stanley.

Just a question on Cosentyx and the dynamic in the HS market. It appears shares have been stabilizing between Cosentyx and the main competitor in terms of NBRx and total scripts. Is it fair to assume both drugs will grow inline with the market? The HS market should expect growth around 15%, so I want to know if that's the growth you’re seeing today.

Yes. We’ve observed stabilization in NBRx share. We expect this dynamic to continue, and both all brands will grow with the market. The market potential here is sizeable; the question is how effective we are in treatment accessibility. We see this as a $3 billion to $5 billion market opportunity, possibly larger if future competitors emerge.

We will now take the next question; this is from James Quigley from Goldman Sachs.

My thanks and congrats to Harry as well for the next chapter. My question is on the Lp(a) portfolio. You started a new Phase II trial for DII235. Firstly, what are the dosing intervals you are testing for the drug? Secondly, at the management event, it was said that if HORIZON were positive, it could lead to a move to Phase III. Are there other assets you’re holding back, waiting for HORIZON to move to Phase III? Is this Phase II a function of a pushout in HORIZON, or do you need more data beforehand?

For DII235, our partner, Argo Biosensors, has publicly released an annual dosing interval. We're prepared to move this study directly into Phase III, based on the HORIZON data set. This is our strategy; there’s no change in our plans. We have other earlier-stage cardiovascular programs we have discussed in the past. Our efforts are aligned with HORIZON readout to ensure we’re ready.

And the next question is from Peter Verdult, BNP Paribas.

Just a follow-up for you, Vas, on the pipeline. Regarding your cell therapy programs in autoimmune, I think some of them read out next year. Could you provide specifics on which ones and general sentiments regarding enthusiasm for these programs?

We remain enthusiastic. We have a huge effort internally on YTB, which is currently in pivotal studies, aligned with the FDA across four indications. There are follow-on programs now in proof-of-concept studies across four additional indications. Our first readout will be in SLE lupus nephritis with strong results from past studies, allowing us to quickly move forward on this research.

We'll take the next question, and this is from Michael Leuchten from Jefferies.

Vas, just on Scemblix, you helpfully provided the share data across therapy lines for the product; it seems plateauing in the first line in the U.S. What’s stopping continued momentum?

Our frontline share data is noisy due to the rare nature of CML. Most physicians only see one or two patients. However, we assess that our frontline share growth is ahead of plan with a solid path to reach 40% to 50% share.

So the last question today is from James Quigley from Goldman Sachs.

I've got one quick one on Zigakibart. The data has been pushed out a bit to have the eGFR data on the label at launch. What’s the rationale for a delay versus having the UPCR data first?

Given competitors' entrance into the anti-APRIL space, we questioned what would provide the most compelling data package. We felt that securing both proteinuria reductions and eGFR benefits at launch would offer a compelling proposition. If everything goes as anticipated, we should have three medicines with eGFR outcomes benefits across Fabhalta, Vanrafia, and Zigakibart, which will present a strong data set. All right. Thank you for joining the conference call today. We'll keep you informed, and I wish you all a great 2026.

Thank you. This concludes today's conference call. Thank you for participating.