We maintain our positive outlook for the expanded indication of Glivec/Gleevec as the first postsurgical treatment for stomach tumors by the European Medicines Agency (EMEA), and expect an approval by the US Food and Drug Administration (FDA) during FY 2009. The expanded indication is expected to further strengthen revenue growth for Glivec/Gleevec. On 21 January 2009, Novartis announced that it received approval for Tasigna, Xolair, Co-Diovan and Lucentis in Japan, the second largest pharmaceutical market in the world (Source: Espicom). We anticipate significant revenue growth for these products, going forward. Furthermore, we maintain our positive outlook for Novartis’ developmental pipeline and expect FDA approval for, QAB149 (Chronic Obstructive Pulmonary Disease (COPD)), ACZ885 (Muckle-Wells Syndrome), FTY720 (Multiple Sclerosis) during FY 2009 and FY 2010. Although the FDA has requested additional data for the approval of Menveo, a vaccine for infants, we believe the vaccine will secure FDA approval over the near term. On 30 March 2009, Novartis secured FDA approval for Afinitor (for advanced kidney cancer), which has potential for becoming one of the key products in its portfolio, going forward, as it addresses an unmet medical requirement and caters to a growing market. The company has made significant acquisitions during FY 2008, namely Alcon Inc. (eye care), Speedel Holding AG (for the future development of Tekturna/Rasilez, Protez, PTZ601) and Netkar Therapeutics for its pulmonary business. These acquisitions are expected to strengthen the company’s Research and Development (R&D) pipeline, with a concomitant increase in R&D expenses, as a percentage of sales, going forward. We also expect margins to be negatively impacted by the anticipated increase in Selling, General and Administration (SG&A) expenses, associated with the company’s policy of increasing penetration in emerging markets. The company has stated in its 4Q 08 and FY 2008 results release that it has achieved higher-than-anticipated cost savings in FY 2008, with Project Forward and remains on track to achieve further savings in FY 2009, positively impacting margins, partially offset by increase in SG&A and R&D expenses.

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