Document Details

# Novartis AG Novartis AG - Special Call - Novartis AG

Tuesday, November 28, 2023 8:30 AM

## Event Participants

#### Executives 10

Samir Shah, Vasant Narasimhan, Shreeram Aradhye, Fiona Marshall, Harry Kirsch, David Soergel, Unknown Executive, Angelika Jahreis, Norman Putzki, Je! Legos

#### Analysts 15

Andrew Baum, Richard Vosser, Graham Parry, Kerry Holford, Emily Field, Florent Cespedes, Richard Parkes, Peter Welford, Holger Blum, Seamus Fernandez, Unknown Analyst, Mark Purcell, Emmanuel Papadakis, Simon Baker, Eric Le Berrigaud

## Samir Shah Executive

So on behalf of Novartis, just want to welcome you all to our R&D Day here in London, and also to say a big thank you for making the time for all of you to come here and participate, and for everybody else who's on the web. So thank you. Before we start, the safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may ...

# Novartis AG Novartis AG - Special Call - Novartis AG

Tuesday, November 28, 2023 8:30 AM

## Event Participants

#### Executives 10

Samir Shah, Vasant Narasimhan, Shreeram Aradhye, Fiona Marshall, Harry Kirsch, David Soergel, Unknown Executive, Angelika Jahreis, Norman Putzki, Je! Legos

#### Analysts 15

Andrew Baum, Richard Vosser, Graham Parry, Kerry Holford, Emily Field, Florent Cespedes, Richard Parkes, Peter Welford, Holger Blum, Seamus Fernandez, Unknown Analyst, Mark Purcell, Emmanuel Papadakis, Simon Baker, Eric Le Berrigaud

## Samir Shah Executive

So on behalf of Novartis, just want to welcome you all to our R&D Day here in London, and also to say a big thank you for making the time for all of you to come here and participate, and for everybody else who's on the web. So thank you. Before we start, the safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause the actual results to be materially di!erent from any future results, performance or achievements expressed or implied by such statements.

For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that, respectively, were "led with and furnished to the U.S. Securities and Exchange Commission.

I think for the people who are here, they've got a printout of all the deck slides, and people on the web also can "nd it on the Novartis website. The agenda is a fairly packed agenda. We're going to begin with Novartis strategy and growth update from Vas, then have the Novartis research and development overview from Fiona and Shreeram. We'll then break for a Q&A panel. And then we go, after a longer break for co!ee and refreshments, we'll then go into the deep dive into the 3 main therapeutic areas, and we'll also touch upon neuroscience.

So that's cardiovascular-renal-metabolic, immunology, we'll cover neuroscience, and then we'll "nish o! with oncology. We've allowed plenty of time for co!ee and refreshments. So you'll have a chance to mingle and ask additional questions during the co!ee break to the speakers. The speakers are listed on Slide 4. Vas, obviously, CEO; Harry, CFO; Fiona and Shreeram, Head of Biomedical Research and Global Product Development and Chief Medical O#cer; Angelika, who is Head of -- Development Head of Immunology; Dave, Development

Head of Cardio-Renal-Metabolic; Je!, Development Head of Oncology; and Norman is here as well who's Development Head of Neuroscience and Gene Therapy.

And with that, I'll hand across to Vas. Thank you.

# Vasant Narasimhan Executive

Thank you all for joining today. We're really grateful for the time and look forward to giving you an update both on how the company's overall strategic outlook is looking, as well as to give you some insights into the R&D pipeline, as Samir outlined. And you'll have time to ask each one of our development heads questions along the way. I'm going to focus my comments on the "nancial outlook, overall big picture strategy, before handing it over to Fiona and Shreeram to go into more detail on the R&D portfolio. We believe Novartis today o!ers investors a di!erentiated pro"le for the short, medium and long term and it presents an attractive shareholder value creation opportunity.

We have a focused strategy that we've implemented over the recent years with 4 core therapeutic areas and 2+3 technology platforms. We'll be coming back to that repeatedly over the course -- upgrade, and I'll go through some of the details behind that, a 5% CAGR with 40% margin. And we believe, in the longer term, our ability to consistently deliver midsingle-digit sales growth. We've also seen, over the recent years, very consistent strong performance with respect to cash generation, sales and core operating growth. And lastly, we've worked hard over the last 5 years to become a leader in material ESG factors as re\$ected in various rankings now.

We believe we're on solid footing with respect to ESG. Now you've all tracked well over the recent decade how Novartis has transformed from a relatively broadly diversi"ed health care company in 2014, moving systematically over the course of the years today to a pure-play innovative medicines company. And what that's been able to deliver, I think, is an attractive shift in our overall "nancial outlook and "nancial pro"le. Our margin expansion has been signi"cant, moving from 26% to 36.9%, our Group free cash \$ow, these are 9-month numbers, \$6.8 billion to \$11 billion, as a percent of sales, 15.6% to 32.4%. And as we've outlined, we expect these trends to continue as we continue our march towards the 40% margin in 2027.

We've also been able to, as we made those changes, deliver strong operating performance. 7% sales growth, 2018 to 2022; 14% core operating income growth, '18 to '22. And then the 790 basis points of margin expansion. These are all continuing operations, innovative medicines numbers. So I think it nicely shows that as a pure-play company, we know how to do this well, we can deliver consistently over time, and we have the right "nancial pro"le, we think, for investors in the long run.

Now we rolled out last time we met together, a focused strategy, which we remain committed to. It's around focus in therapeutic areas, technology platforms, but also geography where we've elevated the U.S., and that's allowed us to really focus on our U.S. launches, as well as ensuring we fully resource Japan, China, which has become an important growth driver, as well as Germany. And we have our priorities to accelerate growth and drive those returns, strengthen our foundations, including the cultural transformation at the company, and be

relentless about driving operational excellence inside the organization. And we're also committed to our approach to capital allocation.

You saw this slide from Harry at the quarter. We continue to invest in the core internal business, \$45 billion of R&D over the '18 to '23 period; value-creating bolt-ons and I'll say more about that in a moment; a consistent growing annual dividend that we did not rebase post either the Alcon or the Sandoz spin, I think, supporting the powerful cash generation that we have at the company; and a steady approach to share buybacks, over \$30 billion in share buybacks, and we announced a new \$15 billion share buyback which we commenced in July 2023. So "nding ways to return capital to our shareholders. And along the way, we, of course, focused the group and you know the actions we took well. Now from a dealmaking standpoint, our focus remains on bolt-on M&A and BD&L., typically below the \$5 billion range.

We, of course, evaluate all deal options. But you can see here, we're very intent and intentional now, looking at each one of our core therapeutic areas, and asking, can we either deepen the pipeline, like we did with Chinook, or can we build out new capabilities like we did with DTx with the potential to target siRNAs into the central nervous system.

That's the approach we're taking, taking a much tighter lens, trying not to do deals to take us too far a "eld away from the focus areas that we've outlined. Now I mentioned earlier, and you saw in our press release, we are raising our guidance for the 5-year period, both for -- in terms of the sales CAGR and maintaining the 40% plus margin guidance, which includes absorbing corporate costs. So along the way, as we shifted the pro"le of the company, we're fully absorbing the historical corporate cost with a single margin for the organization, and believing we can deliver 40% plus in 2027. And I'd like to walk you through, in the next few slides, the dynamics that led us to make this guidance increase. So one, we continue to see strong momentum in our growth drivers.

When you net out the Xiidra divestment, which we closed in September, we have seen really strong performance this year as a focused organization on our key growth drivers. Kisqali showing very strong performance in the metastatic setting, but also now with the opportunity to move and expand into the adjuvant setting, and we'll, of course, be talking quite a bit about that later today. Pluvicto with a very strong uptake in its "rst full year on the market with potential now to expand signi"cantly in earlier lines. Kesimpta seeing a very solid launch trajectory in the U.S. and now expanding ex U.S.

where we're seeing very solid uptake of the medicine. That's given us con"dence that we can get to that 5% with these medicines in our hands. And it's also worth noting, when you take a broader look at the portfolio, the majority of the assets that drive that 5% growth are derisked. We do have Gx impact in the period. We continue to model Entresto with a mid-2025 LOE for modeling purposes.

Tasigna and Promacta also go LOE in the period. But then we have Kisqali, Pluvicto, Kesimpta, Leqvio, Cosentyx, Scemblix, all with the ability to give us that lift to overcome the generics - the generic entries and drive the dynamic growth that we expect. And we maintain, in this view, a probablized pipeline view: iptacopan, remibrutinib, atrasentan, pelacarsen, all are probablized when we give you this 5% outlook. And it will certainly be our ambition to fully realize both the approvals and, ultimately, the launches of these assets to drive even more

dynamic growth in the period. Now importantly, today, we'll be as much about that 5-year period as it is at the period beyond 2027, where we believe we can drive mid-single-digit growth consistently over time.

That belief is underpinned, "rst and foremost, by the derisked in-market brands and the pipeline -- and the LCM extensions, which we'll talk about over the course of the day, but also a broad range of pipeline assets, which we expect to be able to "le in the '22 to 2027 period, and then with additional "lings thereafter. We'll go through many of these assets over the course of the day. Our ability to deliver that consistent mid-stage pipeline delivery will be what enables us to deliver those 2027 and beyond growth numbers.

Now I did want to walk through some of our peak sales guidance. We did make some shifts on the peak sales guidance from what we've historically told you. I'll walk through this in a bit of detail because this will be our opportunity to address some of the commercial topics during the day. Entresto, we continue to see very strong dynamics in the U.S., in Europe, but importantly, now with hypertension and heart failure, in China and Japan. That allows us to raise our peak sales guidance even with our current LOE assumption to \$7 billion now for Entresto.

With Cosentyx, we're maintaining our \$7 billion peak sales guidance. And the 2 real important drivers now we are seeing for Cosentyx growth are both the launch of the IV indication in the United States where we see strong uptick, as well as the hidradenitis suppurativa launch around the world, where we've been able to maintain a clean label relative to our peers. And we think this is going to be also an important opportunity for the brand. We, of course, have other life cycle management beyond that, and we have a slide later in the document to go over with you. Kesimpta, dynamic growth.

Our big opportunity here is to grow with the B-cell class as the B-cell class grows around the world, but also to continue to try to gain share. We have the ambition to get to 50% B-cell class share. That is something that will take us time. But if we can get there, that will enable Kesimpta to well exceed a \$4 billion peak sales goal. Now with Kisqali, we are performing extremely well coming out of the ASCO data last year in 2022 in the metastatic setting.

We're now approaching 50% NBRx share in the U.S. in the metastatic. And then also in a market leadership in multiple markets in Europe. That allows us to give you now guidance on the metastatic setting of \$4 billion. And of course, we'll separately talk about the adjuvant setting in a moment.

And then lastly, Pluvicto and Leqvio, we maintain our multibillion-dollar guidance. For Pluvicto, this is in the vision population, we can guide now that we expect, in vision, we have multibillion dollar potential. And with Leqvio, while the launch has been slow, we are now starting to see traction in the U.S. and Europe, but also now importantly in China, and soon to be launched in Japan, which gives us con"dence we're on the mid- to long-term trajectory want to be on for Leqvio. Now what's exciting, I think, is the opportunity to expand further.

I already mentioned Kesimpta and Cosentyx. But with Kisqali, the multibillion dollar potential of the adjuvant setting. With Pluvicto, multiple earlier line studies, importantly, PSMAfore, PSMA addition, as well as an additional study in the oligometastatic setting, which Je! will

talk about later today. And then with Leqvio, we have the opportunity with the outcome studies that we will read out through '26, '27 and '28 to give this brand a broader data opportunity as well as to expand into primary prevention. Now just saying a high-level word, because you'll hear this multiple times throughout the day, but our thinking in each one of our therapeutic areas is to be very, very clear about the diseases we want to go after, and making sure we have alignment in research, development and commercial on those diseases.

If we want to enter or exit a disease, that's a company decision, and that's really a shift from where Novartis was historically where we had a lot more dispersion into the decision-making on which diseases to play in.

We have anchor brands in each one of those therapeutic areas, which gives us the commercial and development and medical a!airs capabilities to be con"dent we can launch future products in the space. And then lastly, we have assets which we've already shown you now in the -- with submissions in the 2027 time frame to enable us to continue to build that therapeutic area strength for the long run. Now these assets as well as you'll hear over the course of the day have signi"cant sales potential. I won't go through it here, but I think the real point being that we believe in these assets and we believe they have signi"cant potential. Some of them are relatively new to the portfolio.

Atrasentan we added through the Chinook. Lutathera was not one we were expecting, with a post -- a top line data readout, which we gave you with full data in Q1. We're excited about the potential of Lutathera. And then, of course, other brands that you know well and we'll talk about today. I do want to highlight 3 opportunities we believe that at least have the potential in the mid- to long run to give us the opportunity to have more breakout growth if they ultimately deliver their scienti"c potential.

Fiona will go through in detail the power of radioligand therapies where we think the therapeutic index of managing the safety with a high-e#cacy cancer medicine allows us to go after a range of solid tumors, and you'll see the breadth of the pipeline later today. CAR-T and immunology is an exciting space, very early, a lot to be proven. But if the potential of achieving a B-cell reset in these very severe immunological patients and allows us to go across the full range, this is a very exciting opportunity with potential to really deliver deep remissions for these patients. And then thirdly, with siRNAs, where we have a position with Leqvio. We've done a number of deals.

We believe both in neuroscience and cardiovascular disease, we have the opportunity to expand over time to infrequently administered high-e#cacy medicines. I did want to say a word about our manufacturing transformation. We've not talked a lot about it, but it's been, I think, a real success story in the company. We've moved from, especially with the spin of Sandoz, a network of 70 sites down to 30 sites. It's much more streamlined and it has really unique capabilities.

We're the largest producer -- at least have the capacity to be the largest producer of cell and gene therapies. We are the largest producer of radioligand therapies, the largest producer of siRNAs. We have a scaled capability in each one of these advanced technology platforms, and we've delivered strong quality and compliance performance over these years. This also has allowed us to build a bespoke CMO business, which really targets really, I think, some of

these unique technologies and leverage our manufacturing capabilities to deliver supply to other companies. In closing, I did want to say, again, a word about our building trust with society e!orts.

I hope many of you got a chance to participate in our ESG Investor Day, or members of your "rms. We continue to think hard about what are the material factors that matter for a company like Novartis. We work hard to think about how we're going to mitigate those risks systematically. And then we always try to tie it back to the value creation in the company. And now, as I mentioned, you see us typically at the higher end of the rankings or at the top of the rankings as a "rm.

I think that shows that we're doing the right things. It's obviously a long battle that we need to "ght in many of these areas, but that's one we're very, very committed to. So in closing, before handing the baton o!, I did want to come back to where I started. I hope I've given you the case that we have as a focused company with a focused strategy, clear and attractive growth prospects in the next 5 years and beyond, and that's the conviction we want to give you over the course of the day. The proof that we've delivered strong returns and have the ambition to continue that performance, and the ESG leadership that we've delivered.

So with that, I'll actually hand it over to Shreeram and look forward to taking your questions over the course of the day. Thank you very much.

## Shreeram Aradhye Executive

Thanks, Vas. Good afternoon. As Vas pointed out, the purpose of our company is to deliver transformative medicines in areas of major unmet need in the therapeutic areas that we choose to focus on. And over the -- in this session, I, along with my colleague, Fiona Marshall, plan to share with you our overarching R&D strategy, the rationale behind why we have picked the therapeutic areas that we have chosen to work on? How we deploy our platforms in the service of the indications in those focused therapeutic areas?

And how we work together to ensure that we are delivering on R&D productivity? Over the past 18 months, what has been very gratifying to see as we all work together is that all of our development plans fundamentally pay attention to what evidence is going to be required for success in order to secure approval, access and rapid adoption into clinical practice in the 4 geographic areas that we choose to focus on. At the heart of our ambition at Novartis are our people, who bring deep expertise in the areas that they specialize in and a relentless attention to the purpose that we seek to work on. At this point in time, our clinical portfolio has 103 programs, starting from Phase I, of which 83 are in areas of speci"c high unmet medical need that we choose to prioritize and are in con"rmatory development. We have more than 15 submissions coming up in the coming 3 years in these -- via these programs.

While we've been industry leaders in having delivered the largest number of new molecular entities being approved by the FDA over the past years, we are now equally focused on the value that we provide from these pipeline to patients as well as shareholders.

Looking at what it has done, what has it meant for us to focus on these 4 therapeutic areas that we chose to focus on? So cardiovascular, renal and metabolic; immunology; neuroscience; and oncology. We pick therapeutic areas that we have had a long presence in and have had the full range of functional capabilities across the organization in research, development and the commercial organization to allow us to be the ones that are able to work in those areas with focus. Having streamlined our portfolio over the past -- since we last got together in 2021, by over 30%. While maintaining our R&D spend, it has allowed us to now invest all the resources necessary to ensure that those programs that we choose to focus on are executed with excellence with no compromises on the actions needed to deliver value.

It also allows us to keep building compounding capabilities on the areas that we choose to work in at all levels. And we believe that those compounding capabilities translate into better judgment and better decision-making that then has a greater likelihood of delivering success for our pipeline. Let me now take you at a high level through the rationale for our strategies in each of the therapeutic areas that we have chosen to work in. In cardiovascular, renal and metabolic, the core diseases that we choose to focus on, include heart failure and hypertension. We've been in that space for a very long time.

We've taken on the mandate of addressing atherosclerotic cardiovascular disease, which remains a signi"cant area of unmet need. And we have chosen to then pursue our options into renal diseases, getting -- starting with glomerular diseases on the back of iptacopan. A fundamental premise of our cardiovascular strategy to reduce CV risks is the premise that the main reason that we have not been successful in lowering cardiovascular risk as successfully as we could have been, is because patients do not take medicines that lower either their LDL or manage their blood pressure when they happen to be oral medications that are taken on a daily basis. On the back of inclisiran, we have successfully shown that an infrequently administered product, twice a year with sustained reductions in LDL has the potential to meaningfully transform cardiovascular outcomes, and those trials are now ongoing. You will see that theme play out in the details when we get to the therapeutic area later.

In heart failure, we aim to further improve outcomes by targeting new mechanisms of action, like direct agonism of NPR1. On renal, Dave Soergel, my RDU Head for Cardiovascular, Renal and Metabolic will go through the details of how we have built upon iptacopan and then acquired additional assets to target complex glomerular diseases that lead to end-stage renal disease. And we opportunistically will explore areas like atrial "brillation that are in a very early stage in the preclinical setting with a focus on rhythm control. In immunology, building upon our success with Cosentyx, where the focus now having just secured the approval for Cosentyx in hidradenitis suppurativa, we are focused on delivering the 3 remaining life cycle management indications that are coming up. Having done that, we now believe that the remaining unmet needs in immunology are in di#cult specialty diseases that have had no meaningful treatments, like Sjogren syndrome, like lupus, like lupus nephritis, like chronic spontaneous urticaria.

And we aim to deploy our understanding of immunology built over many decades in the service of meeting the needs of those patients, as you will hear in the presentations coming up. We are excited about taking our many years of experience now with our next-generation CAR-T therapies and applying them to deliver potential immune reset to patients with severe refractory autoimmune diseases. We'll talk more about that in the later presentation.

In neuroscience, the diseases we aim to target are multiple sclerosis, selected neurodegenerative disorders and neuromuscular diseases. And our fundamental goal there is to "nd interventions that allow us to modify those diseases so that we are able to ameliorate the risk of disease progression. We have a number of programs ongoing of 10 programs that are in clinic, with approximately 50 trials planned. And while we will not cover neuroscience in depth today, Norman Putzki, our Neuroscience Development Head is here, and will be happy to take questions. We also, of course, will build upon the learnings from our experience with Zolgensma and deploy all of those learnings in gene therapies deployed against these neurological disorders.

In oncology, we have chosen 3 main solid tumors: breast, prostate and lung, and then our long-standing heritage in hematology. And the principle that we want to live is how can we take our products and move them into earlier lines of therapy into earlier stages of disease so that we have the possibility of delivering to patients a treatment-free remission or a cure. And you'll see that theme play out along the various presentations that we will go into in-depth. For RLT, we'll spend a lot of time talking about the RLT platform, which o!ers this unique precision delivery of radiation in a see-what-you-treat paradigm as a way of addressing both earlier lines of solid tumors as well as single products that could address multiple tumors. Fiona will be going over that in more detail in the next section.

And with that, Fiona, let me call you to the stage to go over our platforms.

## Fiona Marshall Executive

Thank you very much, Shreeram. So very happy now to really take you through some of the platforms that we're excited about. Importantly for me, the platforms must align very closely with the disease areas of interest. So rather than doing platforms for platforms' sake, we do platforms because we really believe that these advanced platforms and technologies can target some of the underlying drivers of disease and give durable responses in quite often di!erentiated ways from low molecular weight.

So traditionally, Novartis has had a heavy emphasis and leading chemistry expertise. We still do have that still strong chemistry expertise, and there are many targets that still are best drug with low molecular weight compounds. And we do chemistry in all of its guises, so not just directly acting inhibitors and activators, but allosteric modulators, covalent modulators. There are many things now, targeted protein degradation, that you can get compounds to do. So that will always be part of our portfolio.

But as you can see here, we're shifting resources signi"cantly towards biologics. I'll talk to you a bit about our biologics capabilities, but also these other platforms that Vas has already told you about. And you can see already increased resources both in research as well as in development in preparation for this. So in the case of biologics, again, we believe that biologics can give very durable responses, targeting important drivers of disease. Of course, we brought monoclonal antibodies to market in the case of Cosentyx, for example.

But there are many other ways of using protein engineering now to deliver advanced biologic capabilities. So proteins themselves and engineering natural proteins to give long-lasting e!ects, di!erent antibody formats, antibody-drug conjugates and multiple speci"c

### antibodies.

So within discovery, of course, what we're doing is really try and build the next wave of technologies with our own proprietary expertise. We are working on next-generation ADCs. We're very much leveraging AI in this space to optimize the properties very rapidly to develop new biologics, but also incorporating early on in research all of the important pharmaceutical components in terms of scale up, how we deliver those, how their duration is optimized. Now as I mentioned earlier, all of these platforms for me must align with our core therapeutic areas. We want them to be very reproducible and robust, so that when we bring a candidate forward from research, it can easily be picked up by our technical R&D to scale up.

We know how to do the safety testing, we know how to do the dose response "nding. These may seem trivial when it comes to low molecular weight, these are not trivial exercises for some of these complex modalities. You still have to understand what the dose is, what the therapeutic index is. And we really have built incredible, robust expertise in all of these modalities now. So this, I believe, gives us really a sustained competitive advantage and these are scalable.

And you can see, of course, these di!erent modalities now. We have the path"nder in di!erent disease areas like Leqvio, RLT, but we're also bringing up these di!erent modalities across the rest of our therapeutic areas. So Vas has already shown you this slide, really by way of introduction, I'm just going to go into a few more details on each of these important platforms. So starting o! with radioligand therapy, and you'll be hearing more about Pluvicto and what we're doing there. But for us in research, what we're trying to do is now really map surface proteins on di!erent cancer cells, identifying unique targets.

For some of these, we know from previous experience of what are selectively expressed on cancer cells, but really now understanding what makes a good target for radioligand therapy. We then design the vector which can be a low molecular weight molecule or a peptide, even a protein, that acts as the vector. And then the bene"t of RLT is you then have a di!erent payload that you can bind in, depending on the di!erent radioisotopes. So "rst of all, we can add in an imaging agent, gallium, that allows you to do PET imaging. This can be used for diagnosis, patient strati"cation as well as follow-up.

Then using the same ligand, but now putting in di!erent radioisotope, lutetium. Lutetium is really the radioisotope that we have the most depth of experience with as an RLT really shown to produce e#cacy and safety. We know how to manufacture it. And so you have this theragnostic pair, as it called, this idea, if you can see it, you can treat it. So this is really what our strategy is, is really now to build a pipeline of di!erent radioligand therapies, exploring novel cell surface targets for solid tumors, really building on not just tumor cells but also cells within the tumor microenvironment.

So for example, cancer-associated "broblast. We have the FAP inhibitor. And we built a really advanced radioligand therapy preclinical laboratory in Basel that allows us now to develop new RLTs, test them out, really understand the mechanisms of action that are occurring, and also what makes some of the best combination therapies with RLT. And then continue to extend this also through business development. So each of the components, we're really taking one at a time and iterating on each of these, "nding new targets, "nding new vectors.

Some of this is done in collaboration, for example, with PeptiDream, with Bicycle Therapeutics, with molecular partners, and then looking at di!erent isotopes. Now again, these complex modalities are not trivial in terms of scaling up. And so really, I think this presents a barrier of entry to other people who would like to move into this area. And the way that I think about it is, because we do have clinical trials network, we do have this discovery lab to test out di!erent combinations, we've now got R&D manufacturing that allows real sort of delivering to patients, this allows us to be really a preferred partner for biotech companies that are interested in moving into this area. And again, you heard from Vas and Shreeram about really the depth of human capabilities that we have across all of these components.

So that allows us then to build a continued portfolio, building on Pluvicto, Lutathera. Of course, in each of those cases, we continue to take those into di!erent settings, di!erent tumor types, but also then a range of di!erent RLT drugs coming forward, many of which have opportunities across multiple di!erent tumor types. So moving on then to CAR-T and cell therapy. Again, really building on the history that we had with CAR-T, really the "rst entry in Kymriah but by studying that from a research point of view, understanding what were the drivers of e#cacy led us to this understanding that the stemness of the T-cells within early CAR-T was what was the real driver of e#cacy. So this produces really the bene"t of having research, working with development, getting clinical data back, and also then incorporating manufacturing together.

And I think this is the sort of thing that really only a big pharma has all these components that can come together. This led us to really design the T-Charge second-generation platform where we very much optimized the stemness of the T-cells by reducing the manufacturing time, going into patients much earlier with a lower dose, and that expansion actually occurs in vivo. And already, we've seen the durable e#cacy that the T-Charge platform can produce. So we're expanding really our footprint o! CAR-T, as you heard, into other indications, particularly severe autoimmune disease, potentially neuroscience. But we continue to progress CAR-T in oncology setting.

So these are 2 that are using the T-Charge platform, PHE, which is our BCMA T-Charge in myeloma, YTB323, which is our CD19 T-Charge. And again, we've shown that the concept of T-Charge to produce durable responses is playing out, and you'll hear a bit more about this from Je! later. And then more recently, the opportunity for CAR-T in solid tumors led us to the acquisition of this DLL3 CAR-T from Legend. And then again, Angelika is going to talk to you about how we are very excited about the concept of the B-cell reset in autoimmune disease.

Again, CAR-T, like RLT, really not a trivial modality to be scaling up and manufacturing, really, again, leveraging the foundational capabilities, the experience that we've had of working in this area for being really the CAR-T pioneer has allowed us to build up CAR-T networks, to build up the manufacturing platform and really having global operational capabilities. And again, something that is very di#cult for smaller companies to achieve. And so here is our pipeline. I've mentioned all of these already, and you're going to be hearing more about them and look forward to having some discussion around these.

So moving on then to xRNA, and again, building on Leqvio, I think most of you here probably

understand how RNA works. But we've been doing a number of di!erent -- concentrating on a number of di!erent aspects within the research group of really how to optimize xRNA. So again, using chemistry, around the sequence, how do we optimize the durability, the stability, and then what delivery vehicles do we use? Of course, we're very good at this now for hepatic delivery, and we have the ability to look at di!erent combinations. The interesting thing from the xRNAs is that you can combine multiple ones together in a single formulation with no detriment to each of the components.

So it's very amenable to combination therapy. And we think this gives real opportunity in managing multiple risk factors in cardiovascular disease. But of course, where we want to do, because how many di!erent targets would be the potential to knock down with xRNA, we want to be able to get extrahepatic delivery into multiple di!erent cell types of interest. So really, build -- this is our strategy here. First of all, building on outcomes in cardio, renal and metabolic disease, adding into Leqvio, not just PCSK9, but Lp(a), then multiple other ones coming forward.

Again, continued focus on durability. We know we can get once every 6 months. We've got the promise of a longer duration than that, potentially once a year, combinations, and then the extra tissue targeting. And this has led us to acquire a company called DTx. So they have a FALCON platform.

This is a fatty acid conjugated to the RNA. And it allows uptake and delivery to several of the di!erent tissues depending on the particular fatty acid that you have. And the most advanced program there is in Charcot-Marie-Tooth disease. So really interested in opening up other tissues that fall within our disease areas, myocardium, kidney as well as CNS. Again, building this platform portfolio, primarily, "rst of all, in cardiovascular disease, but also real opportunity in neuroscience, patients who have severe neurodegenerative diseases like Alzheimer's disease, to be able to give those patients once a year or twice a year injection is a huge bene"t over multiple injections, which is very di#cult for the carers, for example, or particularly people who are in residential care.

And we think some of these platforms that we're delivering now o!er that opportunity, both in rare diseases like CMT1, but also in these broader disease areas.

Okay. So that's a bit of a lightning. You'll be hearing a lot more about this going forward. And I'd like to invite Shreeram back up to the stage just to close out this section.

# Shreeram Aradhye Executive

Thanks, Fiona. I think you have a very good sense now for what it is that we have chosen to work on, but success comes from also being focused on how we do it. And we truly have transformed our ways of working together and our focus on relentless productivity. And it comes through paying attention to the details and being committed to operational excellence. You've already heard about how we went about acquiring the 2 assets from Chinook, which came on the back of a streamlined organization, building upon internal knowledge that was gained from the iptacopan rare glomerular disease programs, and then being able to successfully assess the value of the 2 assets that Chinook had to enter target IgA nephropathy.

If I wanted to -- on the second column there, if I had to tell you and give you a little \$avor for what it takes to make sure that we can succeed in taking on a program in a di#cult disease area to work in, like Sjogren's syndrome. The fact that a seamless organization and translational medicine has been working in this space in partnership with the development team and literally paying attention to all levels of details, for which centers should we work in, how do we build centers, how we train them to be able to give us the data in a reliable manner? It's the attention to all of those details that then in an organization that gets focused, translates into these trials actually recruiting nearly 6 months ahead of the original plans in terms of the Sjogren's Phase III. We already heard a lot about the YTB autoimmunity plan, which really is one team within Novartis now across research and development and the U.S. organization as well as our major geographies, to bring the right centers together so that we can connect the hematologists with the rheumatologists to be able to launch our Phase II plans.

You will hear some more about it.

And "nally, I want to say that at the heart of it all for productivity, we are focused on making sure that the programs that we progress bring value. And the value conversation happens right at the start, from having clarity on what drives value, what's going to be necessary for success, and how that informs the plans.

We, of course, are -- so this is really a new way of working where we are truly working together as an integrated organization. And the same applies to our deployment of the AI interventions that we deploy to enhance our performance in R&D. Fiona and I actually jointly govern the entire R&D e!orts and how we are deploying AI. We pay as much attention to what tools we are deploying as much attention to the data that we're deploying them on. And whether they are in the early-stage applications, in the discovery stage or interventions that I'm overseeing on how we might use AI to enhance our performance in trials, it's a seamless way of working that pays relentless attention to what is immediately an intervention that has impact and then how do we scale what works.

So with that, I think -- I hope that we have provided you with a good sense for -- on this R&D Day as a pure-play medicines company of the focus therapeutic areas we're working in, enabled by our di!erentiated technology platform, and we're on our path to deliver high-value medicines addressing major unmet needs. With that, let me invite Vas and Harry back for the Q&A session.

# Vasant Narasimhan Executive

Very good. So we have about 40 minutes for Q&A. I'd suggest, please limit yourselves to 1 question and we'll make multiple rounds as we go. So start with Andrew and we'll work the way around the room. Andrew?

# Andrew Baum Analyst

It's Andrew Baum from Citi. As we've discussed before, Novartis has a history of being the "rst adopter across novel technologies. And often, it hasn't worked, in the case of Pluvicto and radionuclide it has. Thinking about your autoimmune e!orts with the CAR-T, you won't "nd anyone who's more -- who's less excited -- no, who's less excited -- no, more excited than I am, in terms of the potential for CAR-T and autoimmune. But 1 thing that troubles me is allo-CAR-T and extent this represents an existential risk, not just for you, but the other autologous that are in development.

And I know in oncology it's an experiment that was tried, but this is a very di!erent concept. So given you're opening very large programs, large trials, it's going to take a lot of bandwidth, how do you handicap the risk of competition from the allo?

### Vasant Narasimhan Executive

Do you want to take that, Fiona?

### Fiona Marshall Executive

Yes. I mean Andrew and I were talking about this topic outside. And I think the fact that allo hasn't really delivered on the promise in oncology. I think we can learn a lot from the oncology setting across to the immunology area. Because we essentially are trying to do the same thing, which is to take out B-cell population.

And so for us, we're concentrating on CAR-T. We believe that that's the right strategy. It's already got some very encouraging data so far, which we believe that we can build on. And that's our area of focus.

# Vasant Narasimhan Executive

Yes. I mean I think the 2 points I'd add. So I think we have to be very sensitive to the fact that both allo and also bispeci"cs, there's many ways that this can go. And we're trying to build the capacity to -- we lead with CAR-T because we think that's where, as you know, the SCHOTT labs data really builds on. Go broad, try to be a leader and get to those indications as fast as we can.

But behind that, be realistic that -- and I think Angelika can talk about this a little bit later, that we might have to use other therapies, because as you want to move earlier lines in severe immunological disease, having bispeci"cs, maybe allo if they can get past some of the safety issues, that are going to have to be part of the portfolio. So it's on our minds. I have to say that right now in the race, we think as the "rst step is to win the CAR-T therapy race in some of the key immunology indications. Richard?

# Richard Vosser Analyst

Thanks. Richard Vosser here from JPMorgan. So just thinking about that mid-single-digit sales growth in the longer term, is that a CAGR from '27, or is it an annual ambition? And what would you say is the biggest driver in the pipeline of con"dence in that midterm or longerterm growth?

# Vasant Narasimhan Executive

Certainly, our thinking is a CAGR, because obviously, with individual years in that period, of course, we will have a Cosentyx LOE, which we'll have to overcome. But I think it's not 1 asset. I think it's the constellation of things I tried to outline at the outset. I mean you have medicines like Kisqali, like Kesimpta, Leqvio, Scemblix that have a long runway and that can take us well

into the early 2030s. You have the new assets -- new indications that we talked about, including for Pluvicto and Kisqali.

And then you have the pipeline assets, which we'll go over the course of the day. Certainly, I think the thing we'll have to navigate is the IRA. I mean, certainly, for us, IRA is not a material impact through this next 5-year period, but it starts to become an impact depending on how the policy evolves. So we're going to have to, of course, deliver not only with internal innovation but also to look at external innovation as well to bring in. We think, overall, when we look at the constellation of assets, we have enough here to get to that mid-single-digit growth rate consistently over time.

I think we just have to build more conviction that whether some of the assets like you see here today, like VAY, like our RLT platform, can really drive that growth longer term. Graham?

# Graham Parry Analyst

I'm just going to follow up from Richard's question actually there. So on that growth rate post '27, is that taking you out into the early 2030s? So what's the kind of time frame that you're thinking? So you've always got big LOEs, Kesimpta and Kisqali in 2030, 2031, which are actually a big part of the current growth rate? Are there any assumptions built into that, that you could extend patent life on either of those assets?

So Novartis in the past has been, I'd say, quite innovative in its patent strategies, both with small molecules and biologic therapy. So should we be thinking this is a mid-single digit through those LOEs? Or is this really a guide up to 2030 that you really -- or an aspiration up to 2030 you're giving us?

# Vasant Narasimhan Executive

Yes. The way we modeled, we model in 5-year increments. So we look at '27 to '32. And in that time period, we assume the LOEs that we currently have, so that -- as model. So you have '29 for Cosentyx.

We have Kesimpta longer. Of course, we will try to protect these assets as long as possible. Kisqali goes at di!erent time points as well. And it's important to note U.S., Europe, China, Japan, all go at di!erent time points. Entresto goes in Japan until 2033, I believe.

So there's, of course, a lot of dynamics.

But my guess is the biggest di!erence between our view and the external view is on the pipeline assets. And it's really going to come down to the conviction we can build on the midstage pipeline over the discussion today. Harry, anything you want to add?

## Harry Kirsch Executive

Yes. Maybe just a little reminder, right? Most of the consensus or the analysts said, analyst community 1 to 2 years ago thought that the current midterm 5 years, we would grow 1%, right? Now everybody is asking for 4%, 5%. So today, you've got a 5%, right?

Just a year, 1.5 years. So I think it comes down to the fundamental conviction. Are we able to have these pipeline assets have good BD&L and M&A to support our 4 therapeutic areas to

bolster that growth? Within 1.5 years moved up from 1% to 5% or 4%, the consensus is now, right? So I think that's important because everybody knows the LOEs.

LOEs are not as cli! as actually most people think, right? The di!erent geographies happened. We have a lot of tailend [indiscernible] still \$1.5 billion. Just think about that, right? So with all of that, it's our fundamental belief that we -- with this pipeline with a normal modeled intake from bolt-on M&A, we'll be in that clearly a mid-single digit.

But it's a big -- these are assumptions, right? That's why most people don't model longer than 5 years. We do that. I think 4 or 5 [indiscernible] do that. And we are convinced we have the pipeline innovation power to grow.

# Vasant Narasimhan Executive

And I think one of the things we have to deliver on, as Fiona mentioned and Shreeram mentioned, is the RLT pipeline will start to mature at the end of the decade. So if we are successful in moving this beyond Lutathera and Pluvicto, you will have at that point in time, FAPI, let's see about some of the other targets, bombesin-folate, et cetera, start to mature. Alongside that, we would hope that if we see transformative e#cacy in CAR-T therapy and immunology, you'll start to get those approvals as well.

We've seen with Pluvicto, "rst year ramp, I mean, it's approaching \$1 billion in its "rst full year. So if we can hit those RLTs with the right e#cacy and safety, obviously, the ramp is very fast. And I would expect similarly CAR-T with immunology would be very fast if we're able to really deliver durable remissions in these patients. So let's go maybe to the back here. I think -- see who that is, light in my face.

# Kerry Holford Analyst

It's Kerry Holford from Berenberg. It's on margins. A number of your global peers suggest margins, operating margins, in the 40% plus range are not desirable, and perhaps are indicative of not investing enough in the pipeline to drive future sustainable growth. So in addition to that target, you also have an LOE period to transition through to 2027. So I wonder if you could talk us through the thinking behind wanting to grow margins from here over that more tricky period, and why you are not perhaps looking to grow, at least ahead of sales, your R&D, internal R&D budget, or indeed perhaps that you're looking to supplement more of it from external sources.

What's your thinking behind that, please?

### Harry Kirsch Executive

Yes. Thank you very much, Kerry, for that way of question. Because usually, the question comes, why is it not much more than 40%, right? And I'm basically answering along the lines what you just outlined, which is we always want to make sure that we are investing into the pipeline and into the launches and the top line -- to optimally support pipeline and top line, of course. And so we don't want to be cornered by any short, mid- or long-term margin guidance.

But on the other hand, we are at 37% basically, right, in the 9 months this year. We have made

a lot of progress over the last years. And actually, if you just draw a straight line, that we would be quite beyond 40%. But what we say is, and my conviction is, also the moment we get to the 40%, I think that is with good productivity, we are leaning out the organization which we have done and all of that, but we always invest in top line and pipeline. Beyond 40%, I believe it has to do a lot with the product mix.

And we are -- we don't want to forgo areas which may have a little bit lower gross margins, if you will, right? Because these are good businesses and so on. So that's why 40% we see without any problem, if you will, without a compromise in terms of R&D investments or large investments beyond that, we are careful. And the R&D budget is growing. I saw 1 slide here, there is -- and if we have even more Phase IIIs and fantastic in-licensings or bolt-on M&A, we will not hold back R&D investments because of margin.

But we have also areas where we can drive further productivity, as we have shown you over the last few years. So that's why we hold on to this 40% plus, and the plus depends on the product mix.

### Vasant Narasimhan Executive

So then maybe here in the front, Emily?

### Emily Field Analyst

Emily Field from Barclays. I just had a question on sort of prioritization between small molecule and large molecule in the R&D pipeline. You mentioned by 2030 that you see a big shift moving to biologics. But sort of when we think about some of the pipeline programs that we may be launching then, by then, whether it be iptacopan or remibrutinib, we think, at least personally think of Novartis as being more in the small molecule space. So is this sort of an earlier portfolio shift that because of IRA you're shifting more of the focus to large molecule?

### Fiona Marshall Executive

Yes, I can start from the research point of view. I mean, it isn't just the IRA. It's actually the types of treatments that we want to bring to patients that have really durable e#cacy and are really targeting the underlying drivers of disease. So often these modalities give you that real bene"t in those types of settings compared to small molecules, which may be more symptomatic treatment. So that -- it's really what we're trying to achieve in patients that is as much driving this change and the leadership expertise that we have in these areas.

So certainly, it's changing the way we're doing research, but also business development as well. So we look at what's the right answer from business development across our whole portfolio.

#### Vasant Narasimhan Executive

And I think, certainly, your question on the IRA, it's on our minds, but I think we follow the science "rst. And I think the science is what's driving the shift. I would say that we are systematically evaluating pipeline assets to ensure we factor in the IRA impact. And certainly, assets that are small molecules, predominantly for the elderly, that are not single indication rare diseases, are just simply harder to make sense when you evaluate them versus

alternative opportunities. And I think that's not unique to Novartis.

That's an industry-wide shift we're going to see, I think, over the coming years.

#### Fiona Marshall Executive

And it's maybe worth adding, it's not just the IRA. I mean in research now, we actually have commercial input on all projects that we start to make sure that we're aligned that these are going to be the right size for Novartis that the development team are enthusiastic about taking those forward as well.

#### Vasant Narasimhan Executive

Florent?

#### Florent Cespedes Analyst

Florent Cespedes from Societe Generale. Vas, could you elaborate a bit on potential inorganic growth, which areas, which kind of products we could look for to strengthen the pipeline existing portfolio?

Vasant Narasimhan Executive

Inorganic, you said?

#### Florent Cespedes Analyst

Yes, inorganic. Inorganic.

#### Vasant Narasimhan Executive

So I think there's a few important shifts we've made. One, I mean, historically, we've had a pretty broad purview of deals that -- and when we've sometimes brought in assets that were outside of our core areas. And I think looking hard at those, sometimes those have not worked well. I don't think Xiidra in the end, with the test of time, was a good deal. We didn't have the expertise to really, I think, make the most of that asset.

So going forward, we really try to focus on therapeutic areas that we listed here are the diseases -- I mean the hunting list you can think about is the diseases you see on these charts. And to do a deal outside of those diseases has to be something that we, as a leadership team, "nd so compelling that we're willing to move away from that. So we're saying, focus on those core therapeutic areas. We're looking for new technology capabilities that we can bring in. Certainly, I think as Fiona mentioned with DTx and lipid technology to target siRNAs.

We didn't have an RLT for FAPI, so we went and got one from Clovis. And so we're trying to augment our core technology platforms. And then we're trying to stay very disciplined around that. And that means saying no to a lot of deals, but we think there's enough there within that space to "nd enough attractive opportunities. I mean Chinook was a nice one.

Iptacopan is in renal. We have a pipeline in renal. We bring in Chinook. We get 2 Phase III renal assets, 1 of which has read out positive already as well as, I think, 3 or 4 preclinical candidates that Fiona is now working on. So that's the kind of pro"le of opportunity we're looking at now.

Just right behind you. It's Richard.

## Richard Parkes Analyst

Richard Parkes from BNP Paribas Exane. If I think back to the -- your R&D Day in 2019.

# Vasant Narasimhan Executive

Which was in this hotel, by the way.

## Richard Parkes Analyst

Yes, it was. I think you outlined a wave of mid-stage pipeline assets that we're about to move into Phase III, including iptacopan, remibrutinib, pelacarsen, and all of those assets are the same sort of lynchpin that we're going to be talking about today. But in today's presentation, I get less of a sense of kind of high-conviction, mid-stage assets that you're expecting to move to late-stage development. So I'm just wondering, is that just a re\$ection of where you are in your cycle and you're more con"dent about near-term growth? Or is it going to take a bit more time for the new, more focused Novartis kind of structure to embed in terms of R&D?

So just talk about your conviction about that next wave.

### Vasant Narasimhan Executive

Yes. I mean I can start and maybe, Shreeram, you can add. I think, one, we wanted to gear this day to assets that are very close to licensure, right? So to help really provide the markets with a deeper understanding of assets we're going to launch in the next 3 years. And that's how we've geared things today.

We are seeing, I think we will touch on, and Shreeram will try to touch on needs of the therapeutic areas, some assets that are advancing, and we think that can also generate attractive value. I would say though it is indicative of another shift. I mean in 2019, we still had a lot of things in our pipeline. And we've really tried to focus down and say, rather than have lots of assets, really maximize the assets that we have. So Pluvicto now goes into 4 indications.

Iptacopan goes now across 6 or 7 indications. You'll see later VAY across 3 oncology, 3 immunology indications. So I think it's much more about going deeper on assets where we see a lot of opportunity and continuing just to feed more Phase II assets into the pipeline, rather be patient enough to see assets that we can build into very signi"cant medicines.

# Shreeram Aradhye Executive

The only thing I'll add, Vas, is that there's now complete alignment and clarity between Fiona and myself on the Board that we chair as to what is going to be the data that is going to be the basis for actually moving a product forward into Phase III. So there is a series of assets that we govern together, that we have complete clarity on what we expect to see.

### Peter Welford Analyst

It's Peter Welford, Je!eries. Just a question really on siRNA. I guess there's 2 aspects to this. One is, does the belief that you're now going to go over every 6 or every 12 months' therapies re\$ect management's, I guess, sole belief now that there is going to be success of Leqvio commercially? And this idea can work in both the U.S.

and rest of world? So you do want R&D now to continue driving that? And related to that, is the focus in R&D now taking existing known mechanisms and turning it into those therapies? Or are you going against bigger picture? And particularly, I'm thinking metabolic, where I don't think you've really got anything yet in metabolic using this perhaps paradigm.

# Fiona Marshall Executive

Yes. I mean, yes, we do believe in the future of Leqvio and really in the future concept of being able to give these very long-lasting high-compliance adherence, managing as many di!erent risk factors as possible in combination. I mean we think this has a remarkable opportunity in managing cardiovascular risk reduction. So in doing that, in research, yes, we're taking a combination of known risk factors as well as novel ones that may come from human genetics, for example.

## Vasant Narasimhan Executive

And I think to the question on Leqvio, it's certainly slower than we hoped for. But we are seeing all of the signals that we're building a large prescriber base, we're seeing greater depth. And I also think we're seeing the beginnings of interest in other large markets. I mean Japan, China, as I mentioned, very early days, but we start to see traction. And so I think that gives us con"dence that eventually we'll get to the point with the outcomes trials with moving into primary prevention, with maybe in some geographies even being frontline ahead of statins that having -- it's every 6-month or eventually every-year alternative is going to be the way to go in cardiovascular disease.

And we believe a better path in pursuing orals in this particular therapeutic areas, that, hence the pivot. And we're trying to build the pipeline, and hopefully we can demonstrate that to you in the coming months and years, that there'll be more and more assets entering the clinic in siRNAs. Right here in the front. Holger?

## Holger Blum Analyst

Yes. I'm Holger Blum from Patinex. A question on the portfolio focus that you've shown pretty impressive shrinkage from 155 to 103, I guess you won't reduce it by 50 over the next year. What is the right target size you have in mind? And maybe you can explain a bit how the year has evolved, how many of these projects did fail, how many you just decided not to fund anymore, and how many could you rescue maybe by partnering out, maybe having optionality via milestones later on?

And last one to that is the business development side probably added to the portfolio that would -- in that 103, how many were added by business development?

# Shreeram Aradhye Executive

I mean I would say that the size of the portfolio seems to be at the place where we think it's

the right place to be, for an organization that focuses in the areas that we choose to focus in and around 103 clinical stage programs, of which 80 are in con"rmatory development. I would say that the reductions happened both as a result of speci"c data readouts where we had very clearly applied our thresholds for what we think needs to be seen for the product - the program to progress forward. And there were others, like Vas said, where we were perhaps working in areas that we were not currently planning to focus on. So some of those went on to the list for potential to divest. There have been those.

And then in terms of, I think, entries from the external world, other than Chinook, a large number of them currently have been mostly early-stage. But I think for the most part, this 103 now re\$ect a rationalized version of portfolio that pretty much has come from within.

### Fiona Marshall Executive

Yes. And I mean I think an important component is how we actually did the portfolio review, and it did involve myself, Shreeram, Ronny from the strategy team as well as commercial input, looking literally through the entire portfolio and discussing where we thought the high value was for Novartis, where we were well set to take it forward and have a lead. And so taking all the factors together was how we made the reduction.

## Vasant Narasimhan Executive

I mean some of the consequences, and Shreeram talked about it, one is a clinical portfolio, but Fiona and her team have done a great job also rationalizing down the research portfolio. I mean when we benchmarked ourselves with the new R&D leadership team, we were at the top of the chart in a number of assets, number of preclinical programs, number of trials. But that also meant we had some of the lowest resourcing per project, lowest number of chemists drugging, kind of drug candidate.

And so by making this shift, keeping resources growing in R&D, but now dramatically reducing the pipeline size, we actually put more resources against our clinical stage assets, against our early product portfolio, which we hope will then accelerate and help us "nd the assets that we really want to go after. I mean, right now, we're about peer median, we think, and that's reasonable. We don't necessarily want to go lower. But we don't -- no longer want to be the company that's highlighted with the most of everything, because that's not the battle we want to win any longer.

Please. Seamus.

## Seamus Fernandez Analyst

Seamus Fernandez, Guggenheim. So just trying to get a sense of just the dynamics of the overall P&L as we move forward and sort of the spending as we see it going forward. To me, it kind of looks like the incremental sales is almost \$owing exclusively straight through as you increase the sales margin. So just trying to get a better sense of how to think about gross margin progression, R&D, to some degree SG&A, but also we got some surprises on the tax line from some of your peers, wondering how we should be thinking about below-the-line dynamics as well given Novartis' very compelling...

### Vasant Narasimhan Executive

The right man for this question is Harry.

### Harry Kirsch Executive

Thank you, Seamus. Finally. No. But I think when we think about our current situation, margin close to 37%, to the 40%. I do expect the margin improvement almost exclusively to come from SG&A.

And basically, as we described that the majority of the sales growth basically falls through given that we will have some incremental SG&A investments, but basically growing signi"cantly below the top line, right? So that's the majority.

On the gross margin, I expect that to be roughly stable. We will work continuously on, of course, manufacturing, supply chain e#ciencies. But we have some growth drivers that have a bit higher royalty burden, which is also part of the cost of goods. So kind of \$attish, plus/ minus gross margin. And then on R&D also, in average, right, it's never a formula, as I mentioned.

We will always invest in great programs in R&D. But that R&D roughly growth with sales, so there will be R&D increasing, and we will be in the range roughly of 19% to 20% of sales. Again, not a formula. We will maximize value always and invest. But a long story to say, SG&A will be it.

And I think that's also the power, of course, in research, development and business development to have 4 therapeutic areas with clearly de"ned diseases. But the same is true on the commercial execution so we can leverage much better our commercial infrastructure as we resource allocate from maturing products into new launches and prelaunches. So much more e#cient commercial execution, if you will. And in\$ation is not such a big deal, and we have productivity programs to o!set it. So all of that is well under control.

From the taxes, we have been in the range of 15.5% to 16%. I think there will be a little bit of increases maybe if the OECD Pillar 2 gets increased, but nothing signi"cant. We have a few products, we have few SIP, but again, in the long term, I see ourselves in a core tax rate of 16% to 17%. But short term, the range of 15.5% to 16%. So not a big deal from the bottom line in terms of below [indiscernible] and quite manageable.

## Vasant Narasimhan Executive

Very good. Let's go to [ Eric ], and then we'll come over to the web.

## Unknown Analyst Analyst

On your slide talking about the new modalities, there are 2 magic words with ADCs and multispeci"cs. We're not necessarily aware of how advanced Novartis is into those 2 "elds where some of your peers are already into the market with some products. So could you maybe say where you are -- what's the most advanced product for each of those 2 modalities. If you have everything you need internal or if you need to make some [ BD ] acquisition, should we expect Novartis to be active in those 2 "elds in terms of [indiscernible]?

### Vasant Narasimhan Executive

I'll give this to Fiona just to...

### Fiona Marshall Executive

Yes. I mean we do have everything we need to deliver these -- both of these modalities. We have but a number of ADCs in our portfolio. And we have taken ADCs into the clinic, but we haven't disclosed those yet. And of course, we're learning where would be the best use of ADCs relative to RLTs?

And so -- what was the other model?

#### Vasant Narasimhan Executive

Bispeci"cs.

#### Fiona Marshall Executive

Bispeci"cs, yes. I mean, we are doing a number of di!erent bispeci"cs across multiple di!erent therapeutic areas, particularly in immunology, for example, where we see the value of combining known validated targets with the novel additional targets that bring synergy. And certainly, in the oncology area, we've talked about di!erent immune cell engagers, whether that's T-cells or other immune cells within the tumor microenvironment. That's something that we have really quite a robust portfolio coming through.

### Vasant Narasimhan Executive

One of the things we want to highlight though, and hopefully you get a sense throughout the day, is we believe RLTs have a unique therapeutic index. And so when you look at the safety pro"les, at least to our eyes, and you see some of the topics that come up with ADCs, particularly with respect to lung, but as you know, other AEs with ADCs in general, thus far with lutetium-based RLTs, we see some salivary gland and we see maybe a little bit of bone marrow, very manageable. And one of the reasons we think Pluvicto is taking o! as well as it has in the United States is the safety pro"le. And so what you have is a high e#cacy medicine that actually has a safety pro"le, when you look at the data that we presented at ESMO, the overall AE pro"le was not far o! -- or actually looked across trial comparisons, but better than the ARPI that we had in that trial in terms of the AE pro"le. So you're having a medicine then that not only is looking good in late line settings post-chemo, looks good pre-chemo.

But what that allows you to do is maybe move RLTs into much earlier lines of therapy, because nobody is going to take the risk of a death in early cancer patients who can be treated by alternatives. But we can take RLT all the way, as Je! was talking about, to the oligometastatic setting. You'll see with the top line data we presented on Lutathera, that we'll present in January, we can move that up to the frontline setting, and it's all underpinned by the safety. So I think our core belief is we can get high e#cacy with an attractive safety pro"le given the therapeutic index we see with RLT. I think we want to go to the web.

Is that right?

### Samir Shah Executive

Yes. There are 2 questions from the web. The "rst one from Rajesh at HSBC. His question is, can you please elaborate on the criteria for moving assets to Phase III? What are the main parameters you're looking at?

And how does it di!er from the past? And then the second one is from Steve from Cowen. Management has stated that one of the virtues of RLT and CAR-T is that they have manufacturing and logistics MOATS that hedge against competition. Should we think about these products as e!ectively having no meaningful patent expirations such that when we come to Novartis 2040 R&D Day, we will be learning about new products in the pipeline being added to a portfolio of legacy RLT and CAR-T products that are still growing?

#### Vasant Narasimhan Executive

All right. So well, I ponder Steve's question, let's start with Shreeram and hopefully, an easier one...

#### Shreeram Aradhye Executive

I mean, I think the decision-making for what we look at to move a program into Phase III is quite simply evaluating the data that has been delivered from our Phase IIb studies, evaluating the competition and how the world has evolved, and then assessing our probabilities of success towards delivering the target product pro"le that we believe is going to be essential for us to be able to get approved, gain access and move into rapid clinical practice.

#### Vasant Narasimhan Executive

[indiscernible] the threshold still on the sales that we use now.

### Shreeram Aradhye Executive

Well, yes. And our expectations are that we only will develop products that have peak sales of \$2 billion in order to move them into full development.

#### Vasant Narasimhan Executive

And the thresholds we use are, for an asset, we want the total asset potential to be over \$2 billion and an indication level over \$500 million. I mean that's what we -- now. Do we adjust if there's an opportunity to build on Cosentyx or will we -- yes, we will. But in general, our expectation is, if we don't have a case for the asset to be over \$2 billion peak sales, then that's probably not an asset that will make sense to help Novartis grow given our -- the size and scale of the company. So I think, Steve, to your question on MOATS, we certainly believe that in RLT and to some extent as well in cell therapy, we've built unique capabilities.

If you take RLT right now, we have 2 manufacturing facilities in the U.S. We have facilities in Europe. We've already announced -- just I announced 2 weeks ago that we'll be building a facility in Japan. And so we're building up a global network of RLTs, which we think will make us completely unconstrained. Even today, we are unconstrained from a supply standpoint.

We can supply all the markets for whatever demand is needed. And more importantly, our ability to deliver now within 5 days for Pluvicto, 3 days of Lutathera, and get those doses even the day before, so that means you have 2 days and 4 days, to the clinic is getting up to very high levels. The trailing, I think, 6 weeks were 100% on-time delivery in the United States. That took us 2 years of "guring it out, lots of learning, lots of mistakes. So I think that capability is real, and that know-how is real and not easy to replicate, and there's a lot of know-how tied up on that.

I would be, though, I have to be clear though, there can be other players who develop RLTs and develop CAR-T therapy. So we will face competition. So it's on us to keep life cycle management coming up with better products continuing to develop. But our expectation is that, as we build out the capability, that hopefully an RLT center knows Novartis will provide the full range of, hopefully, not only lutetium, but actinium-based therapies across the range of potential targets, they don't need to go to another place and work out the complex logistics with another company. And we hope as well with CAR-T therapy and immunology, we can build that up as well and keep a steady \$ow of assets coming through for -- I'm willing to sign up for, let's call it, the mid-2030s.

I don't know about 2040 yet. But we'll see how things go. So I think do we stop here, Samir? One more question. So who has not asked a question yet?

Maybe in the back? I think...

### Mark Purcell Analyst

It's Mark Purcell from Morgan Stanley. The RLT leadership presents a really exciting opportunity. But as you mentioned, to get sort of stable long-term remissions, you sometimes need combination therapy. And in the past quarter, you've pivoted away from immuno-oncology, for example. So can you help us understand, I mean, you can't invest in every oncology technology, but how are you looking to sort of build combination assets with RLT?

And then a speci"c sort of follow-on, in terms of PSMA, ADC versus PSMA RLT, is that something that is an exciting complementary approach for you or do you see it as competitive?

### Vasant Narasimhan Executive

So I think, Mark, I'll answer just at a high level, and I'll leave it with Je!. Je! will be the right person, I think, to give you a more detailed answer on this. We are -- we do acknowledge we're going to need to be able to do combination therapies. We are already running combination trials, for example, with Lutathera and a PD-1 inhibitor in small cell lung cancer. We're looking at other combination studies as well in the prostate cancer space.

Now we are doing those through third-party assets because we don't have -- obviously, a PD-1, we gave back the rights to BeiGene. But I think combinations will be important given certain diseases to really get to deep responses, and that's a capability. So maybe, Je!, you could pick that up in more detail in a moment. So we'll take a break here for how long, Samir? All right.

Until quarter past, and then we'll continue from there. So thank you all very much. [Break]

### Shreeram Aradhye Executive

All right. Well, welcome back, everyone. So now we start going deeper into each of our 3 chosen therapeutic areas for the day. The plant -- I have with me Dave Soergel, who many of you know, development head for cardiorenal metabolic development unit, himself a card carrying cardiologist for many years and a drug developer, both in the biotech and large industry setting for a long time. So my plan is to go over 3 assets at a high level with you quickly, namely Leqvio, pelacarsen and XXB.

And then Dave plans to do some deep dives on iptacopan as well as atrasentan. As we discussed earlier, our core premise in reducing cardiovascular risk comes from our ability to address challenges with adherence with the premise, again, that the use of antisense oligos or siRNA to reduce cardiovascular risk factors over an extended period of time with infrequently administered agents gives us the best potential for meaningful reductions in cardiovascular risk. We -- on Leqvio, we've had a lot of discussions, the relationship of LDL lowering and its bene"ts from cardiovascular outcome are well established. We have multiple large cardiovascular outcome trials now running on Leqvio. On the left side of that slide, you see the data that were used in order to design those trials, the premise being that the longer you maintain a lower LDL level, the better the cardiovascular risk reduction, which is -- the magnitude of which can be de"ned by Mendelian randomization approaches where you can evaluate what this might look like over an extended period of many decades on the upper line there with meta analysis of shorter randomized trials, which still, on average, about 5 years of medium showing the other magnitude.

And our trials are actually explicitly designed to evaluate potential bene"ts on cardiovascular risk reduction in that [indiscernible]. Our 2 secondary prevention trials, ORION-4 and Victorian-2-prevent are enrolled and running with data expected as we said, in '26 and '27, and V1P, our primary prevention study is expected to read out in 2029. Dave and I often have this discussion about how running large outcome trials takes discipline and taking attention to the details in terms of the population enrolled as well as the event rates and how they are accumulating, but above all, also the responsibility to urge -- to resist the urge to want to close those trials out early because I think we have one shot at being able to establish the magnitude of the bene"t that we can accomplish with an intervention like Leqvio. And pleased at the present time, we aim to complete these trials as planned and to be able to provide the practicing physicians the necessary information that guides their practice in the use on a daily basis. We're proud to say that Lp(a), which, of course, is an independent genetically determined risk factor for cardiovascular disease, 1 in 5 people worldwide with an elevated Lp(a).

Traditionally, not paid much attention to because people did not have any real means of addressing this risk, but o! late, perhaps driven by the increasing interest in agents that can lower Lp(a) where we are at the leading edge with Pelacarsen, our GalNAc conjugated ASO lowering Lp(a) levels successfully as shown on the right side of that slide in our Phase II studies and now being evaluated in Horizon, our ongoing Phase III study which has the potential to be the "rst trial to demonstrate the bene"ts of lowering Lp(a). The recruitment is complete. The trial is running. We expect the primary readout in 2025. And then "nally, keeping with the theme of long-acting agents that allow us to treat a cardiovascular risk factor and coming into hypertension, XXB is an early stage program.

It's just delivered Phase I data that we presented at the AHA and we are in the early stages of recruiting a study in resistant hypertension in Phase II and plan to evaluate in heart failure in a study -- in a Phase II study that we'll start next year. But XXB is a monoclonal antibody that is a direct agonist at the natriuretic peptide receptor 1. We've learnt a lot about this biology through our work on Entresto and we believe that the agonism of NPR1 in a noncompetitive manner with the endogenous ligands via XXB has the potential to have the bene"ts that are outlined on the right side of that slide. Just 1 small slide to show you the early data that we presented at the AHA where in this Phase I healthy volunteer study, where ambulatory blood pressure was monitored after a 240-milligram single dose you see a highly e#cacious reduction in blood pressure of about 18 millimeters of mercury systolic, nice lowering over a 24-hour period and the restoration of night time dip, which is part of the physiologic response that is important. Again, early times.

We will look forward to generating more data in patients with both hypertension and heart failure before de"ning the next steps on this program. So with that, let me hand over to Dave for iptacopan and atrasentan. Excellent. I'll go and sit there since you want to see a lot of things, okay?

# David Soergel Executive

Well, it's great to be here with everybody this afternoon. And it's especially a pleasure to provide an update on iptacopan which will be our "rst order of business. And then our second order of business will be to talk a little bit about the evolving IGA and lab -- landscape and speci"cally about how iptacopan, atrasentan and zigakibart all "t into that evolving landscape. . So "rst we'll touch on iptacopan.

Iptacopan, as you'll recall, is our oral Factor B inhibitor targeting disregulated activation of the alternative complement pathway. We believe it has the potential to become the preferred treatment in several rare complement-driven disorders in both hematology and nephrology. And today, I'll focus on 3 of these opportunities, paroxysmal nocturnal hemoglobinuria or PNH, where we anticipate a U.S. FDA decision soon. And where iptacopan, we believe, could be practiced changing the management of these patients.

Second, IgA nephropathy, where we anticipate a "ling for accelerated approval early next year and where we recently released top line results. And then C3 glomerulopathy, where we expect Phase III data imminently from that trial. So "rst, let's start with a reminder about iptacopan's mechanism of action because it really is sort of fundamental to understanding why we're in all of these diverse indications with iptacopan. So the complement system is a component of the immune system that clears foreign matter from the body. And there are 3 ways that the complement system can be activated.

First, by antibody antigen complexes, which is depicted in the "gure on the left, through the classical pathway; second, by microbial surfaces via the lectin pathway; and then third, by the alternative pathway, which is a constitutely active surveillance mechanism always looking for

4 materials to clear from the body. The alternative pathway ampli"es the alert that there's foreign material present and mobilizes the system to clear it. And Factor B plays a critical role in this ampli"cation sequence and inhibiting Factor B with iptacopan dampens this alert signal but leaves the classical and lectin pathways active. In contrast, C5 inhibitors, which work on the distal end of this sequence inhibit the formation of the terminal membrane attack complex, or MAC, which more completely inhibits the function of all 3 pathways. This regulation of the alternative pathway is an important factor in several rare complement-driven diseases, and we're pursuing several of these depicted on this slide in the iptacopan development program.

In each case, complement and speci"cally the alternative pathway has been implicated in the disease pathophysiology. And in each case, the current standard of care is either subpar or, in some cases, nonexistent beyond supportive care. So we think there's a real opportunity in these indications for a better medicine like iptacopan. So now let's turn our attention to paroxysmal nocturnal hemoglobin area, which I will from now on refer to as PNH. PNH is a complement-driven disease characterized by hemolytic anemia, thrombophilia and bone marrow failure.

And in PNH, abnormal hemopoietic stem cells produce blood cells that are unable to prevent complement from activating on their surfaces. And so when complement adheres to these abnormal red cells, they're lysed, and this produces the hemolytic anemia that's part of the disease state. Anti-C5 antibodies were an important advance for these patients but there remains signi"cant unmet medical need as depicted on this slide. Over 80% of patients - surprisingly, over 80% of patients treated with this anti-C5 compounds do not achieve normal hemoglobin levels, and half of these patients, so 39% of individuals remain transfusion dependent. Many patients because of this anemia continue to experience debilitating fatigue from their anemia.

So why do we believe that iptacopan is going to be a meaningful advance for these patients? And basically, it's because of its mechanism of action. So in untreated PNH, red cell hemolysis results from the activation of the membrane attack complex that I referred to in the previous slide and shown in the bottom of the "gure again. This results in anemia, free hemoglobin in the blood and elevated LDH. And this is what characterizes so-called intravascular hemolysis, these sort of 3 features.

In PNH, C5 inhibitors e!ectively prevent the terminal step that leads to intravascular hemolysis. However, the problem is that inhibiting C5 doesn't prevent the ampli"cation via the alternative pathway. This results in coding or opsonization of abnormal red cells with C3 fragments which marks them for clearance by the reticular endothelial system in the liver and the spleen. This is called extravascular hemolysis. 80% of C5 inhibitor patients continue to have anemia, as I mentioned before, and therefore, could bene"t for more e!ective inhibition of extravascular hemolysis.

And based on our Phase II data, we expected that iptacopan could be an oral monotherapy for PNH as it e!ectively appeared to control both intravascular and extravascular hemolysis. And the Phase III data reinforced this expectation. So in treatment-naive patients and in C5 inhibitor treated patients with anemia, oral iptacopan was highly e!ective at addressing

anemia, preventing the need for blood transfusion and improving fatigue. Apply PNH, which is summarized on the right-hand part of this slide, enrolled patients with residual anemia despite treatment with C5 inhibitors and randomize them to continue use of the C5 inhibitor or to iptacopan monotherapy. At 6 months of treatment, 82% of patients treated with iptacopan experienced a clinically important increase of at least 2 grams per deciliter in their hemoglobin and 68% of individuals experienced a hemoglobin level of at least 12 grams per deciliter, which is a near normal level.

And this compared to only about 2% of those treated with C5 inhibitor infusions. Similarly in treatment-naive patients in the Appoint trial, which is on the left-hand part of the graphic, over 90% of individuals experienced at least a 2-gram per deciliter increase in hemoglobin and almost 63% experienced a hemoglobin level of at least 12 grams per deciliter, while almost all patients avoided the need for red blood cell transfusions. And in both populations, we saw clinically important increases -- improvements in fatigue in both of these populations. So these are the results that have led experts in the PNH "eld to extol the iptacopan as a potentially groundbreaking new therapy for patients and a practice-changing option because it showed that oral iptacopan was as or more e!ective at treating PNH than infused C5 inhibitors. So with iptacopan, we have the opportunity to rede"ne the treatment paradigm in PNH.

Today, of the 6,000 patients living with PNH, about 30% are treated with complement inhibitors and iptacopan has the potential to be a more e!ective treatment for the many C5 inhibitor treated patients with residual anemia. The remaining 70% are not treated for a variety of reasons, including milder symptoms and preference to not have infusions. For these patients, based on our data to date, iptacopan should be a safe, e!ective and more convenient option. And therefore, there's a possibility that we could increase the treatment rate in this 70% untreated group. And of course, new patients could start iptacopan from the beginning when they're diagnosed.

So we're excited about iptacopan's potential to change the lives of people living with PNH for the better. So now we will shift gears and talk about another rare complement-driven disorder but this time in the kidney, C3 glomerulopathy. C3G is a severe primary glomerulopathy that's primarily diagnosed in people in their teens and 20s. So these are young individuals with their whole lives in front of them. And as you can see in this "gure on the left-hand panel of the slide, kidney survival in these patients is dismal.

About half of patients, 50% of patients require dialysis or a transplant within 10 years. So the time when they're requiring a transplant is when they're in their 20s and 30s. So absolutely devastating. And even worse, if a patient does get a transplant, there's a high risk of having the disease recur in the transplanted kidney. C3G is driven by genetic or acquired factors that lead to complement activation and deposition of activated C3 in the glomeruli.

And this causes in\$ammation, scarring and loss of kidney function on the trajectory that you see there. So despite this high unmet medical need, there are no speci"c treatments available for C3G. Care is geared to attempt to preserve kidney function for as long as possible and avoid transplant and dialysis. And it really consists solely of ACE inhibitors and angiotensin receptor blockers, and they may extend to immunosuppressants if symptoms

persist, but despite the fact that this looks like a very well organized and rational treatment paradigm, there's actually very little data to support any of these treatments in C3G. So this o!ers us an opportunity with iptacopan, we think, to o!er an alternative for patients that can really improve their lives and extend the lives of their kidneys substantially.

And the data from the Phase II study increased our con"dence in iptacopan's potential in C3G. C3G patients who had not yet been transplanted [indiscernible] individuals with native kidneys. We saw a large improvement in proteinuria on the top part of the right-hand part of the slide, stabilization of renal function and normalization of serum C3 levels, both at 3 months and a 1-year follow-up. And importantly, in patients with transplanted kidneys, we saw a similar stabilization of renal function and normalization of serum C3 levels. And as you can see on the bottom part of the right-hand part of the slide, we also saw a dramatic reduction in pathologic C3 deposition in the glomeruli of individuals with the diagnosis.

So now we are eagerly awaiting the results from the APPEAR-C3G Phase III study, which we expect very soon. This trial includes patients with native kidneys, biopsy-con"rmed C3G and proteinuria despite optimized ACE and ARB therapy. Patients were randomized 1:1 to iptacopan or placebo, and the primary endpoint is proteinuria at 6 months comparing iptacopan to placebo. The patients then may enter an open-label treatment extension period for another 6 months. And as I said, we expect the data in December.

So any time now. So our plans for iptacopan and C3G are summarized here. As I mentioned, APPEAR-C3G, we expect the data soon, and we would anticipate with positive results to conduct the U.S. "ling in and 2024 on the basis of that study. We've also studied another Phase III study in immune complex membranoproliferative glomerulopathy or IC-MPGN.

IC-MPGN is a close relative of C3G, but it's a distinct histopathological entity and similarly, doesn't have a speci"c treatment option. So it gives us an opportunity, again, to expand the treatable population with iptacopan with a therapeutic that we think could be targeted for these individuals. So to wrap up iptacopan then. So this is a broad and dynamic development program, as you can see, and is designed to bring innovation to patients who currently don't have good options to manage their complement-driven diseases. I'll call your attention on this slide just to the key milestones expected for each of the indications on the bottom part of the slide there.

As mentioned for PNH, IgAN and C3G, we have the near-term milestones that I mentioned. For aHUS, we have an ongoing Phase III study and expect submission enabling readout in 2025. And IC-MPGN, we just started and expect to read out in 2016. So a lot going on with this program. Okay.

So changing tack a bit now and discussing IgA nephropathy in some depth. And we'll include iptacopan here as well as the recently acquired medicines from the Chinook acquisition, atrasentan and zigakibart. So IgA nephropathy or IgAN, is a rare progressive kidney disease that strikes people again in their "rst few decades of life, so people with a lot of life in front of them. There are approximately 180,000 people in the U.S. living with IgAN with an annual incidence rate of about 7 to 20 per million.

The classical presentation of IgAN is gross hematuria associated with an upper respiratory

illness though many patients actually just have microscopic hematuria or proteinuria when they're "rst seen. So it can take many years to make a de"nitive diagnosis in these patients, which is ultimately made by a renal biopsy. In IgAN, the key risk marker for disease progression is proteinuria. Reducing proteinuria is an important clinical goal for practitioners and the U.S. FDA has recognized proteinuria as a potential basis for accelerated approval provided that the bene"t on kidney function is con"rmed through longer follow-up of a Phase III study.

So IgAN is a great example of how a deeper mechanistic and clinical understanding of the disease can drive innovation. And over the past few years, there have been -- there's been a wave of innovation in this disease that will provide treatment options for many patients. And we think the 3 medicines that we have in our portfolio now will be great options for individuals living with IgAN.

So the pathophysiology of IgAN has been described as a 4-hit model. At the root of IgAN on the far left of this slide is the formation of abnormal galactose-de"cient IgA by plasma cells and mucosa. And this is typically described as Hit 1. The inciting factor or factors that causes this abnormal production of IgA is not known, but in many cases, are present concurrently with a URI, upper respiratory illness, as I mentioned earlier. And this is why the mucosal immune response has been implicated in the pathophysiology of the disease.

The second hit then is an autoimmune response to the abnormal IgA. So formation of cell - of antibodies to the abnormal IgA that's been produced by the plasma cells. And then formation of immune complexes which often contain complement fragments is Hit 3. Hit 4 is an immune complex deposition in the glomerulus and activation of the complement producing in\$ammation, scarring and renal dysfunction. And so iptacopan acts at this "nal hit, preventing activation and ampli"cation of complement and potentially reducing renal damage.

So looking at the similar schematic with the 4 hit model and showing this time where atrasentan and zigakibart work, I think you can see from this "gure, that these 2 molecules work in very distinct places compared to iptacopan. Atrasentan is an endothelin receptor type A inhibitor and zigakibart is an APRIL antagonist. And they act at distinct steps in the disease pathophysiology and have the potential to work in a complementary manner along with iptacopan to preserve renal function. So atrasentan, which is on the far right of the slide, intercedes at Hit 4, but it doesn't in a very di!erent way than iptacopan does. It reduces intraglomerular pressure so it has a hemodynamic e!ect of the glomerulus, which reduces the load on the remaining glomeruli and allows them to function normally for longer.

It also reduces in\$ammation within the kidney. Iptacopan, by contrast, doesn't have a hemodynamic e!ect, but it does reduce in\$ammation by inhibiting complement activation, as I mentioned in the previous slide. Zikakibart, by contrast, acts at Hit 1. It -- APRIL is a key survival factor for plasma cells that produce the abnormal IgA. And so by antagonizing APRIL, you fundamentally intercede at the root of the disease by inhibiting the production of abnormal IgA.

Ultimately, when you think about it, these patients live for 40 or 50 years after they're diagnosed, and IgAN is a progressive disease. So it's very likely that many of these patients are going to require multiple modalities of therapy as they go through that journey over the next several decades of their lives. And we're excited to be able to o!er many di!erent options for patients depending on where they are in their disease state and whether or not they need additional therapies. So we've reviewed in the past the very compelling proteinuria reduction data from our Phase II study with iptacopan and so now we've had the readout from the Phase III APPLAUSE study and have shown that treatment with iptacopan compared to placebo results in clinically meaningful and highly statistically signi"cant reduction in proteinuria, which as I mentioned, is a key marker for disease progression in patients with IgAN. So with these data in hand now, we're planning for a regulatory submission for accelerated approval in the U.S.

in the "rst half of next year. The trial will continue in order to con"rm iptacopan's bene"t on GFR at 2 years as required by the U.S. FDA. So just to be clear, why haven't we shown any Phase III data? We've issued press releases about highly statistically signi"cant results and a big treatment e!ect, but we haven't actually shown you any data.

And that's because we have an ongoing con"rmatory trial that remains blinded. And we are - we have an agreement with the U.S. FDA that we have to be very careful about what data we put in the public domain for an ongoing clinical trial. So any data that we released will be done in -- after consultation with the FDA in order to maintain study integrity. So atrasentan has also shown signi"cant reductions in proteinuria in the Phase II AFFINITY trial.

Here, you see the treatment with atrasentan reduced UPCR by over 54%, suggesting that it too could be an e!ective agent to preserve kidney function in IgAN. Now note, these are Phase II data. This is a single-arm study with relatively small numbers. So the e!ect size looks large, and that gave us a lot of con"dence when we're looking at the medicine before we made the acquisition. The other important thing beyond the proteinuria reduction that we saw in IgAN patients was the safety pro"le of atrasentan.

So there's been extensive experience with atrasentan in di!erent indications. And the most relevant other indication that atrasentan has been explored in is diabetic kidney disease. And this gave us a lot of con"dence, both with respect to the overall safety of atrasentan as well as very speci"cally the liver safety of atrasentan because other endothelin receptor antagonists have had issues with liver safety in the past. So last month, we read out the 9 month interim analysis also for the Phase III ALIGN trial. So in patients with biopsy-proven IgAN, on optimized supportive care with ACEs and ARBs, atrasentan reduced proteinuria, again, to a clinically meaningful degree that was highly statistically signi"cant.

And as with other IgAN trials, it will continue to completion to 2025 to con"rm the bene"t on renal function. And again, we submit -- we would anticipate submitting in the U.S. for accelerated approval in the "rst half of next year. So in addition to the Phase III readouts that just occurred, we've also started our Phase III trial with Zigakibart called it BEYOND. So there's really a lot to be excited about in the IgAN space right now.

And we have an opportunity, I think, to really change the lives of IgAN patients and prevent the progressive decline in renal function that these individuals experience and ultimately prevent the need for dialysis or transplantation. Thank you very much. Let's go to Q&A.

### Shreeram Aradhye Executive

Yes. So I think we have 15 minutes or so for Q&A. So this is now a dedicated Q&A on this portfolio. Happy to take questions.

### Richard Parkes Analyst

Yes. Richard Parkes from BNP Paribas Exane. On IgAN, can you help us understand like 180,000 patients, quite a lot of patients for a rare disease's drug. So can you help us understand how we segment that as more likely eligible patient population? And then adding to that, you talked about it being a heterogeneous disease, and we've obviously got multiple mechanisms that they're likely to work.

But where are we with biomarker development that might help us understand which drugs might work better in which patient populations?

### David Soergel Executive

Yes. I mean I think the second part of your question "rst. I think the -- that's an active area of research. I think as new therapeutic modalities have come forward, there's been a lot more interest in biomarker development. We were both at ASN actually, American Society of Nephrology, last month, where there were a lot of interest -- there's a lot of interesting work trying to subsegment this population.

It's still early, though. So -- but we're obviously keeping our eye on that space very carefully. With respect to the "rst part of your question, so the 185,000 patients were diagnosed with IgAN. So as I mentioned, there's a bit of a diagnosis conundrum here, right, because patients with very minimal proteinuria tend not to be diagnosed until very late in the disease, right? So the symptoms are very nonspeci"c because essentially a proteinuria and you have abnormal renal function at some point on the lab test.

However, of the 185,000 patients who are diagnosed, we estimate about 30% have substantial proteinuria, so greater than 1 gram per day. which puts them at the highest risk of progression to renal failure. So if you look at the numbers that we were describing, the individuals who have 1 gram per day proteinuria or above, those are the individuals who tend to progress to end-stage renal disease and require transplant.

### Shreeram Aradhye Executive

Maybe I'll just build on that a little as the nephrologist here. So if you think about IgA nephropathy and the injury that happens that results in protein leaking from the kidney, the single biomarker that actually was the predictor of greatest risk was the amount of protein. So the patients with more than 1 gram a day. The traditional management of these patients has been based on the use of renin angiotensin system blockears, so ACE inhibitors or ARBs, as the basic way of reducing the hyper"ltration happening in the remnant parts of the kidney and thereby protecting those nephrons from declining function over time. Added to that is recent data on SGLT2s playing a role in chronic kidney disease progression.

So what we see is that atrasentan with its mechanism of action is likely to be more liable to be used more in the foundational space, whereas zigakibart and iptacopan both has been

drivers of potentially interfering with actual pathogenic mechanisms of injury may be worked -- may play a role in a di!erent part of the treatment paradigm, pending the availability of course, of the full data sets. When we were at ASN, the question you asked, which is how will we manage patients with which kind of treatment was top of mind given that this is one space where with the FDA having introduced the use of a surrogate endpoint, there's a lot more innovation happening. And so a lot of people are now working on "guring out where is the best treatment say for which patients. Next question?

## Emmanuel Papadakis Analyst

Emmanuel Papadakis, Deutsche Bank. Maybe following on iptacopan, just in terms of clinical di!erentiation, the UPCR data in Phase II was not particularly di!erentiated versus several competitors, some of which have already reached markets. So your optimism that the UPCR data [indiscernible] Phase III will look materially improved. We've also seen some mixed conversion of preliminary UPCR into subsequent EGFR results. Is it that you're more con"dent perhaps on converting and initially moderate UPCR bene"t into subsequently good EGFR.

So just help us with the concept there? And then maybe a quick follow- on [indiscernible], if I may. You highlighted the safety database, you hope to avoid a black box and REMS that unlike it's -- sorry, atrasentan relative to [indiscernible].

### David Soergel Executive

So starting with the second question "rst on [indiscernible]. I think you're referring speci"cally to the black box warning and REMS on liver safety monitoring. Yes, because there are other warnings on endothelin receptor antagonists. So yes, based on what we saw in the SONAR data and subsequent publications of the experience in that very extensive patient population, there did not appear to be any liver safety issues identi"ed in that study. The second thing that's important is the chemical structure of atrasentan is di!erent than other endothelin receptor antagonists that have liver safety issues.

So we believe that on the basis of those 2 things, both the clinical data and the structural makeup of the medicine that we'll have a good chance of avoiding. Of course, it will bear discussions with the FDA when we go to the registration. Your "rst question was around the Phase II data with iptacopan. So the "rst thing to consider is that iptacopan is a fundamentally di!erent mechanism of action than any other therapeutic intervention in IgA nephropathy. So it would work on top of ACEs and ARBs, it would work on top of SGLT2s, work on top of atrasentan, zigakibart, take your pick because it works at reducing the in\$ammation in the kidney that's produced by the immune complexes.

So the degree of proteinuria reduction we saw was actually excellent in the Phase II study. The initial release that we talked about was at 3 months. So remember, if you look at 3 months data, you would expect that improvement to grow over time. And indeed, when we looked at the 6-month data and the 1-year data, it did -- the reduction in proteinuria continued to get better. So I think we were very positively -- we view the proteinuria data very positively from the Phase II study.

And then, of course, we just issued a press release from the Phase III study that said, that the

results were clinically signi"cant and clinically meaningful and highly statistically signi"cant. So we're very con"dent.

## Shreeram Aradhye Executive

No. I think, Emmanuel, this is where the idea that di!erent mechanisms of action may show a di!erent relationship between proteinuria and eGFR behavior over time. I think we don't actually have a large number of data sets, 2 trials that you might be referring to have kind of behaved in a certain way. But I think given that our trials remain blinded, and we are expected to maintain that blind at this point in time, we're con"dent in the UPCR reduction and the EGFR information will evolve in a couple of years. But I recognize your premise that, that is going to be the important driver of distinction of di!erent therapies.

Matthew?

# Graham Parry Analyst

It's Graham Parry from Bank of America. Just a question on XXB750. Just what's your target product pro"le for that? So is this sort of supercharged Entresto with subcut less frequently dosed? When you're running thinking about sort of forward to a Phase III program, is this going to be head-to-head versus existing hypertension, heart failure agents.

Just help us understand sort of how you see that "tting in, into the treatment paradigm.

## David Soergel Executive

Yes. So the ongoing Phase II study is in so-called resistant hypertension patients. So individuals who've had other treatment modalities optimized in a run-in period and then they're randomized to XXB750. So we see XXB750 as an add-on therapy to individuals who have di#culty controlling their blood pressure with available therapies. So I mean I think that speaks to the TPP, right?

So you have to be able to show that a medicine that does that, both that's highly e!ective as we saw from the Phase I data and from the preclinical data and is long-acting is both highly e!ective and well tolerated. So those are key outcomes from the Phase II study. And so far, things look excellent, and we're looking forward to revealing those data next year when they come out.

# Shreeram Aradhye Executive

Matt, I think a little too early to comment on the exact plans for heart failure because it will really depend upon how -- what data we gather from the ongoing Phase II study after we have data from the resistant hypertension trials. So it's early times.

### Simon Baker Analyst

Simon Baker from Redburn Atlantic. Two if I may, please. Firstly, on Iptacopan and PNH. You talked about expansion into that 70% that were not currently treated. How [indiscernible] into that group of you can get what -- in other words, what percentage of that group could get inhibitors therapy, but currently don't, to give us some idea of the particular potential there.

And then secondly, on zigakibart, beyond IgAN, as an anti-APRIL antibody, what do you see is the scope of other therapeutic indications are, particularly thinking about SLE.

#### David Soergel Executive

Yes. I mean I think that -- so with respect to the second question, we are actively looking for other opportunities for anti-APRIL. It is a very interesting mechanism of action, a very speci"c mechanism of action for plasma cell. And if you saw the preclinical data with the zigakibart, it's very, very good at reducing IgA and IgM, but it's not -- it doesn't a!ect IgG particularly much or -- so in terms of a safety pro"le, it looks like it's very interesting to pursue potentially other indications. I forgot the "rst question.

#### Shreeram Aradhye Executive

Well, the proportion of patients in PNH that are not previously...

#### David Soergel Executive

So the -- so PNH is a highly variable disease, and it really depends on the size of the abnormal hematopoietic stem cell clone, right? How much of the red blood cell mass is derived from those clones into abnormal PNH red cells. So in classical PNH, those clone sizes are large, and those people have profound anemia, profound fatigue and so forth. So those are the obvious patients, probably the 30% who are currently treated. The 70% have variable-sized clones and variable contribution of other bone marrow depressing features in their disease.

So the extent to which we can penetrate in that population really depends on how much of their anemia is dependent on PNH, the clone size versus bone marrow failure. And so it's going to be variable, but it's something that we're actively looking at.

#### Shreeram Aradhye Executive

Yes. And I think the only build I have is that the insight we have is that patients sort of and their physicians get used to accepting patients having fatigue and being anemic and not being able to lead the normal quality of life, and we think that this will be a journey where having had the experience of treating patients who are [indiscernible] unresponsive and then gain that experience with the drug will start moving patients into the much easier to start oral iptacopan for a disease like PNH because patients should have the opportunity to live as close to normal a life as they can. Rod, do you want to go to the web for the last question? I know we have one more minute. Okay.

#### Unknown Executive Executive

Right. Another question from Steve from Cowen. AstraZeneca has oral PCSK9 data in-house, what pro"le does Novartis anticipate? What pro"le would be a risk to Leqvio and what pro"le would be uncompetitive? Does Novartis have any data supporting the thesis that more convenient dosing can translate into improved population level, CV outcomes due to better adherence.

#### David Soergel Executive

I mean, I think the most compelling piece of information that I can share is that even after a

heart attack, half of patients stop taking their statin, right? So there are e!ective ways of preventing a second heart attack now, and it's really by optimizing LDL lowering and people adhering to high intensity statins and yet people do not do that. And so as Shreeram mentioned earlier, and Fiona mentioned also with respect to RNA -- exRNA technology, longacting agents take that adherence out of the equation. So I don't think the Leqvio is solely though about the convenience of use in the 6-month dosing. It also profoundly lowers LDL.

And so if you get rid of the sawtooth nature of whether or not you take your statin or whether or not you happen to dose your PCSK9 monoclonal and you have a smooth reduction - profound reduction in your LDL, you're likely to have better outcomes overall at a population level and at an individual level. So I think that's the strongest information I could share.

### Shreeram Aradhye Executive

All right. Thanks, Dave. I think we're at the end of our cardiorenal and metabolic section. So we can. Andrew, one more?

Yes.

### Andrew Baum Analyst

Just a question on pelacarsen following up from the conversation we had. Could you just con"rm that HORIZON, there's unlikely to be any data from HORIZON in 2024 because I think you list 25? And then second, there clearly is a lot of competition chasing the same target with agents which have better scheduling in terms of frequency. You do have a less frequently dosed oligo in early research, but to get it to market in a timely way requires the FDA to approve using a surrogate, so my question is whether LP(a) will be viable as a surrogate, assuming HORIZON works? Do you have any understanding?

Have you had discussions with the agency because obviously, that depends on your ability to compete.

# David Soergel Executive

Yes. I mean, with respect to surrogacy, I mean, HORIZON will be the "rst study to show that lowering LDL -- Lp(a) actually improves cardiovascular outcomes. So it's early to talk about surrogacy at this point. With LDL lowering, it took quite a bit longer for LDL to become a surrogate for approval. But I think that -- I think with a positive HORIZON study and then with additional outcome studies showing a similar bene"t, for example, the Olpasiran study that's ongoing as well.

There's a basis for a discussion about approval on the basis of surrogate LDL -- Lp(a) lowering. But that's going to bear a discussion with actual data in hand. So it's hard to know right now whether that will be the future or not.

### Shreeram Aradhye Executive

Yes, Dave, our expectation on data is 2025.

## David Soergel Executive

Yes, 2025, yes, we don't anticipate sharing anything earlier.

#### Shreeram Aradhye Executive

Good. Thanks, Steve.

#### Shreeram Aradhye Executive

All right. Frameshift to immunology. So I think on immunology, we had a lot of conversations about what our core, core principles are. I plan to quickly share with you an update on Cosentyx and where we're standing with our life cycle management recovery and ianalumab, our B-cell depleting antibody and then talk some more about YTB. Again, delighted that with Cosentyx this year, we were able to secure approval for Cosentyx in hidradenitis suppurativa, a terrible disease.

Again, a major unmet need, only 5% of patients treated with a biologic. Those that are treated experiencing loss of e#cacy over the course of a year. And so with the Cosentyx data demonstrating durable e!ects seen over a year, and us having gotten it approved with the FDA with a great label that also supports the use of every 2 weeks dosing for those that don't respond. And whether it's the absence of certain safety considerations that some of our competition has, we are quite enthusiastic about the Cosentyx HS approval that was recently secured. We also secured approval for the IV formulation earlier this year, and that o!ers us, again, is being received with early times, but I think that physicians, rheumatologists see that as an important option for them to have.

The team is now focused on, of course, delivering all the 3 major life cycle management actions that are ongoing, both with giant cell arteritis, polymyalgia rheumatica and rotator cu! tendinopathy and getting those done and delivered prior to loss of exclusivity for Cosentyx. I want to spend a little time on the ianalumab VAY736, which is our dual mechanism of action anti-BAFF receptor antibody that delivers deep long-term B-cell depletion. And we believe through this mechanism has the potential to be e!ective in a number of B-cell mediated diseases, where prior targeting of B cells with say, anti-CD20s, may not have been necessarily as e#cacious. As a result, ianalumab is being actively evaluated in Phase III programs in Sjögren's syndrome, in SLE, in lupus nephritis on the immunology side. And as you will hear also on the hematology side for the treatment of both "rst and second-line immune thrombocytopenic purpura and warm antibody autoimmune hemolytic anemia.

Our con"dence in ianalumab comes from 2 sources of Phase II data. First, our positive study in Sjögren's syndrome, a disease that is di#cult -- that has been traditionally di#cult to demonstrate positive results in, in terms of e#cacy, but we were pleased to report that in our Phase II studies that we saw both an SRI response as well as movement of patients from mild-to-moderate, moderate-to-severe disease activities into the milder ranges in a 24-week period. But even more importantly, beyond the Sjögren's data, we were also excited about our data from the SLE study where, unlike the traditional prior data that have -- with other agents that have shown about a 20% improvement in responses in terms of SRI-4 proportion of responders over a year, we were in this 28-week study able to see nearly a 40% improvement in those patients responding with an 4-point improvement in the SRI-4. So super excited to have seen these Phase II data. And what I'm often asked, what is the asset that I believe is

perhaps less understood or less valued by those upside, I certainly see ianalumab as an agent that we are closely focused on and see great potential in.

I think that in the spirit of B-cell depletion and targeting autoimmunity, much excitement as we've been discussing in the community about the possibility of an immune reset, mainly Bcell depletion, resulting in the removal of an autoreactive B-cell clone, autoreactive clone with reconstitution with essentially a naive immune system that then results in disease remission. And with the exciting data from the folks at Erlangen and Dr. Schett's department, having seen that across a number of di!erent refractory autoimmune diseases, we've certainly now rapidly started our plans for evaluating our well-established second-generation T charge CAR-T CD19 YTB and taking it into this space. Our translational teams are running the early assessment, which was presented -- the 3 patients were presented at ACR. It's early data, but as this data have evolved, they have stayed as expected in keeping with the course for the patients seen in the Erlangen data set.

What we are focused on, of course, is making sure that we bring all of our capabilities together in order to both engage regulators as well as make the plans for the Phase II studies across multiple indications, both in lupus and beyond and moving those forward. And so please stay tuned for progress on that front. But again, we recognize that it's early times, but we believe that this is the kind of early disruption that should it work out has the potential for transformation fully recognizing the fact that moving from the more refractory patients into earlier lines of autoimmune disease patients will require a better understanding of bene"t risk and also modi"cation potentially of the necessary lymphodepletion regimens that go along with it. So with that, I'm pleased to introduce Angelika Jahreis, our Immunology Development Unit Head, herself a rheumatologist and more than 2-decade drug developer with longstanding experience in immunology. Angelika.

I'll hand it to you for Remi.

### Angelika Jahreis Executive

Thank you, Shreeram. Remibrutinib is indeed a very exciting molecule. It is an oral BTK inhibitor, Bruton Tyrosine Kinase inhibitor. It's highly selective, potent with best-in-class potential. We have just shared our data at the ACAAI Congress for this molecule.

And I would like to highlight 3 attributes of this 2 Phase III studies that really stood out. One was that we have seen consistent as well as transformative e#cacy in patients with inadequate response on antihistamines. Secondly, and that is really important to patients was the fast onset of action because patients su!er from quite intense pruritus. So "rst, onset of action is something that is critically and crucially important to patients. Lastly, and that is something that is -- has been raised for the class is that this molecule has shown favorable safety and in particular, we have seen favorable liver safety.

So with that, there is great excitement in the community about this asset. Now based on the oral convenience, the e#cacy I will share with you as well as the safety that you will see in the following. We believe there is a signi"cant opportunity for remibrutinib as a "rst option after antihistamine therapy. Now let me start with sharing with you the selectivity data from the kinome assay that we have done across more than 450 kinases. And as you will see on this

slide, the red dots represent kinase inhibition above a certain threshold.

And for remibrutinib, you see a large red dot that represents the inhibition of Bruton Tyrosine kinase as well as a small dot, which is 175-fold lower inhibition of tech kinase, but no other kinases are above the threshold. Why do I highlight selectivity? I highlight selectivity as o! target binding can lead to o!-target toxicity. So selectivity for kinases is crucially important. Now let me shift gear and let me talk about the disease that we are talking about.

And I would like to start out with the quote on top and really ask you to take a look at it because it's from a patient and it summarizes very well how patients feel about CSU. CSU does not kill you, but it also does not let you live. And I'm sharing with you 2 pictures here. One of the hives of a patient with severe disease. And as you can imagine, having 50 hives or more, which is the de"nition of severe disease really leads to intense itch that impacts your quality of life, your sleep, your fatigue, your ability to be productive to work.

So huge impact. And just remember and recall when you were stung by a few mosquitoes, how that impacted your sleep. But having this daily occurrence of hives to that amount as well as an unpredictable onset of action is highly debilitating.

On the other picture, I share a patient with angioedema and about 50% of patients have angioedema, which is a swelling of the subcutis or mucous membranes, and this is very dis"guring picture just o! the mouse, but imagine having that on your tongue or on your throat and then having to experience an inability to breathe. So this is a life-threatening complication leading to asphyxia. And one question that comes to mind when you think about this disease is, how can we treat it best. And currently, there is a true paucity of treatment options available for these patients. There is a single mode of oral therapies available, which are antihistamines and based on the paucity of these treatment options, physicians currently up-titrate antihistamines to uptimes 4x the level of antihistamines that are typically given leading to side e!ects like somnolence and fatigue.

But of those patients who -- of those patients with CSU, only 60% respond to even uptitrated doses of antihistamines. So 40% of patients do not respond and cannot be controlled with antihistamines. And these patients have a huge unmet medical need because these patients are refractory or unresponsive to standard of care and there is very limited biologic penetration. Remibrutinib inhibits a central node in the pathogenesis of chronic spontaneous urticaria and chronic spontaneous urticaria we've learned in recent years is an auto allergic or autoimmune disease. And as you can see on this graph, on the slide that either auto allergic disease or autoimmune disease, both go through a central node of Bruton tyrosine kinase to lead to the release of antihistamins and remibrutinib blocks that central -- inhibits selectively that central node and thereby resolving and -- resolving the key molecules that propagate the disease.

And I will share with you now the data from the studies that we have done. These were 2 adequate and well-controlled studies. The primary endpoint for e#cacy was week 12, and I'll share with you the week 12 e#cacy data. The readout for safety is over the entire placebocontrolled 24-week period. End point on the left, you see on the left-hand side of the slide and before I go into the results, I want to just highlight 2 di!erent -- 3 di!erent attributes of the patient characteristics.

First, remember that patients in the back, 60% of the patients involved in this study had severe disease. In general, we only enroll patients with moderate-to-severe urticaria, chronic spontaneous urticaria in this trial. Also, 50% of patients here had angioedema and that's very di!erent from other trials that have been reported in CSU. 30% of these patients had prior biologic exposure to anti-IgE. So with that, I'm very excited to share the data that Dr.

[indiscernible] shared at the ACAAI Congress 2 weeks ago. As you can see here, this is the primary endpoint for the European submissions. That is the mean change in urticaria activity and severity scores over 7 days. We had a statistically signi"cant and clinically meaningful reduction by 65% in the mean UAS7 across -- consistently across both studies. What is very exciting about this data is truly the early onset that remibrutinib has.

As you can see on these slides here, across both studies, we already saw a separation of the curve at week 1, which is incredibly meaningful to patients that su!er from a debilitating disease. In addition, we saw across both signs and symptoms, itch as well as hives, we saw a consistent e!ect. Itch is being described by patients like ants crawling under the skin, the skin being on "re. That is what patients experience, and we have seen a 65% reduction in it as well as hives at 12 weeks already. I would like to talk a little bit about well-controlled disease that is shown on this slide.

Well controlled disease is measured by UAS7 of less than 6. That means a mild itch as well as a few urtica over time. And this is important to patients. And why is that important to patients because if you think about severe disease, as shown on the slide that I presented before, compared to patients who are well-controlled disease, the impact on the health-related quality of life is about 1/10 of that. So these patients can already live normal lives, and therefore, it's important.

And 1/3 of the patients at week 2 already achieved well-controlled disease and 50% at 3 months. Now the treatment goal for all of us treating physicians is to achieve complete disease response with complete absence of hives and itch.

And I'd like to again bring back that picture of that patient because going from that level of disease to absolutely no hives and no itch over a continuous 7 days is quite a dramatic improvement in disease severity. And that is what we have shown with remibrutinib at 3 months. Now this slide summarizes the e#cacy data and Marcus Mara, one of the key imminent people in -- physicians in the treatment of CSU and also the Head of our steering committee, commented on how consistent the data were across all endpoints and how meaningful that is to patients. I would also like to call out how important trust onset of disease as well as achieving well-controlled disease, and that 1/3 of the patients were free of hives and itch, how important that is to patients as well as treating physicians. And I think we cannot underestimate these data.

But as we all know, in a disease like urticaria, e#cacy is 1 part of the equation, we also want to look at safety. And that has been a key interest of the community to understand how safe are BTK inhibitors. And we have seen -- this is now the week 24 data comparing remibrutinib versus a pooled safety from both Phase III studies, comparing it to placebo in this pooled comparison. So the overall adverse events were comparable to placebo, infections comparable to placebo. As you can see, serious adverse events, there was no signi"cant

#### di!erence.

Treatment discontinuation were balanced as well. With respect to petechiae, we saw a slightly higher rate of petechiae in these patients who were daily, twice daily assessing themselves for urticaria on their body. And what has been a keen interest is the liver toxicity, and we have seen no signs of liver toxicity. When we looked at elevations of ALT and AST across 3x upper limit of normal. These were balanced across both studies.

In addition, I would like to highlight that the liver transaminase elevations observed but transient, reversible and most of them were reversible by continuing on therapy. We have also published data at the ACAAI meeting of the 52-week Phase II extensions where patients were treated for 52 weeks on 100-milligram twice a day on remibrutinib. So 4x the dose that we have studied here in the Phase III studies and the data are very consistent. We have seen no safety signal there. And importantly, liver safety "ndings were fully in line with the data that I'm sharing with you here.

I'd like to conclude the presentation of the CSU data with what Dr. [indiscernible] said at the ACAAI meeting, and he talked about how clinically meaningful these data are of a convenient oral therapy for patients who are not controlled currently on antihistamines with consistent profound e#cacy and a favorable safety pro"le. So next steps for us are to bring this molecule to patients as quickly as possible, and we plan for global submissions with the entire 52-week data readout in the second half of next year. Now let's look forward. Remibrutinib, we also have programs ongoing, not only in CSU, as I shared with you right now, but we've also initiated Phase III studies in assisted disease to chronic spontaneous urticaria, which is chronic inducible urticaria with a similar mechanism of action.

We also have a Phase II study ongoing in food allergy which is a very prevalent disease where we have similarly an activation of mast cells and basophils with mast cell and basophil degranulation leading to the symptoms of food allergy and we will be sharing with you soon data from a study in hidradenitis suppurativa. And next year, we will share these data at a major conference. In addition to the programs that are currently in immunology, in the immunology development unit, we also have a very exciting program ongoing in neuroscience. And Shreeram, I wanted to invite you to speak a little bit about that program.

### Shreeram Aradhye Executive

Thank you, Angelika. I know that Norman is here as well. I know that everyone is interested in the MS program. The 2 studies are ongoing. We continue to monitor patients using the appropriate liver monitoring that has been expected by the FDA.

And to date, haven't seen any signs that concern us, but we, of course, continue to monitor. This is a higher dose than was studied, but we're very reassured. And I think as Norman has often told me, among the investigator community in MS, the data from CSU have actually been a very encouraging development. These data, of course, are expected to be reading out in 2026. I just want to end quickly on just a quick snapshot of our key MS pipeline.

We will not be going deep on it, but I'd just comment to say that the key focus now is on the remibrub-MS studies that are running as well as the Zolgensma IT program, which is on track and expected to read out in 2025. Norman is here to take any questions. But with that, I think

we'll break for now the Q&A on immunology and neuroscience.

#### Shreeram Aradhye Executive

Andrew, start with Andrew then...

#### Andrew Baum Analyst

Just going back to your autoimmune targets in immunology. The FDA just put out a warning of malignant transformation T-cell malignancies and patients treated with [indiscernible] pretty much every other BCMA and CAR-T in lymphoma. Given the equation in autoimmune versus oncology is somewhat di!erent, and therefore, one would be more nervous. And given YTB has greater in vivo expansion than [indiscernible] or many of the competitors -- how do you think about assessing this risk? And do you see it as a regulatory concern.

#### Angelika Jahreis Executive

It is certainly an important risk and patient safety is always of utmost important. I think in autoimmune diseases, we have to consider which patients we treat, and we will follow them very carefully. We are treating patients who have serious refractory autoimmune diseases with organ-threatening or life-threatening disease. So I think the equation to in these patients and the promise for this therapy to lead to long-term remission makes this for me, a very positive bene"t risk assessment. Now talking speci"cally about YTP, I think as you may be aware that for YTP, the dose of -- the cellular dose is much lower than we give.

We give 12.5 million cells, whereas for other cell therapies, a much larger dose of cells need to be given. If this wouldn't reduce the risk, quite of any malignant transformation is unclear because the transformed cell numbers that we provide is much lower compared to other therapies. So I think the data will have to play out. I would also like to admit, Je!, you can comment on that, but that the risk to date as I understand, it is extraordinarily low, right? It is certainly something that we have to watch, but the risk, as I understand it, is extraordinary though.

#### Shreeram Aradhye Executive

Yes. And I think -- I mean, I think, Richard, you drew a link to in vivo -- greater in vivo expansion and the risk of transformation, and I'm not sure that those 2 are necessarily linked. I also think it's early times from having received the say, pharmaco vigilance message about having seen what they call a signal and its incidence and how real it is that I think it's early times.

But I think your point about us matching the bene"t risk for -- in the autoimmune space is, of course, an important consideration. But I don't believe this particular one is yet ready for that discussion.

#### Richard Vosser Analyst

Just on the liver safety of remibrutinib, maybe you could just give us a little bit more detail on when the ALT rises occurred in the CSU trials? -- where the rise is sort of 3x upper limit in the wall, whether some at 10x upper limit or some of the severity of those would be very good. And just also on the monitoring frequency that you're using in the RMS trials. If you could give us an idea whether that's now weekly or whether that is biweekly or what it is that you're doing? That would be very helpful.

# Shreeram Aradhye Executive

Maybe I'll start, and then I'll ask Norman to comment on the MS trials. I mean, I think su#ce it to -- I think I'll just say to you that from the data that we have gathered, we are not seeing a risk of the liver toxicity that is attributable to remibrutinib in the CSU program. I think that's what I will pause. And I think in terms of the MS program, we are monitoring it as required by the FDA across all MS studies. When we have a [indiscernible]

## Norman Putzki Executive

Yes. Thank you. We get the question a lot on liver tox in the MS program. So essentially, we had to revise our protocol to just follow FDA guidance for liver tox monitoring across all BTK trials multiple sclerosis. So that was not triggered by any data, that will generate in our programs at just the FDA taking a blanket approach after the monitoring.

Just every 2 weeks initially. [indiscernible] in the "rst 3 months.

## Richard Vosser Analyst

Every 2 weeks or [indiscernible].

## Norman Putzki Executive

I think I would need to look this up and get back to you in detail, but I think we monitor every 2 weeks for 3 months and then monthly.

## Mark Purcell Analyst

Just staying on the same topic remibrutinib ALT elevations. I'm not aware of BTK receptors in the liver. And so I just in terms of hypothesis, which might help when it comes to class -- sort of class labeling, et cetera. Have any studies been done mechanistically to look at some of these target kinases and a potential involvement with liver changes. You listed a whole alphabet BMX, CDK 3, AS2, et cetera, et cetera.

So it'd be interesting to understand that or is it potentially a disease phenomenon that you're not seeing in CSU and less systemic autoimmune disease as you're seeing more in disease where there's more skin in\$ammation. So just I guess, a disease di!erence or a tires in kinase selectivity di!erence, it would be great to get your hypothesis.

## Angelika Jahreis Executive

I think with respect to BTK, it's very clearly that in [ XLA ] which is a loss of function mutation in humans, right? That is not associated with any liver toxicity nor have we seen or if you look at knockout mice, do you see any liver toxicity. You are correct, right, that BTK is not expressed in hepatocytes, and we have not seen any signs of hepatotoxicity in preclinical or clinical studies to date. I can't comment on other molecules and the potential why they lead to -- why they may lead to hepatotoxicity. It could be idiosyncratic e!ect.

I do not know. But certainly from the data that we have seen, we have no indication that this is an on-target e!ect. Actually, all the data suggest that this is not a BTK-driven disease e!ect.

## Seamus Fernandez Analyst

So can you talk a little bit about ianalumab and sort of the comparison between your CD40 data with the Iscalimab in Sjogren's in particular. It seems like Sjogren's could be a potential breakthrough treatment and we haven't had any successful options there. And then just separately on ianalumab, more speci"cally, SLE and other B-cell targeted therapies why would targeting BAFF speci"cally in this setting, be more successful than potentially targeting CD20, where we've seen some issues? And maybe this comes down to patient selection and your patient selection is improving.

### Shreeram Aradhye Executive

You thought a lot about it.

### Angelika Jahreis Executive

Yes. So with respect to Sjogren's, I think for the "rst time with ianalumab, we have certainly seen a dose-dependent e!ect. And we have seen, as Serum has shown in our Phase II data we have seen that about 30% of patients have a clinically meaningful response with respect to the SI index, which is the index that we measure by the response. So this has been the "rst and large -- the "rst time we've seen a dose-dependent e!ect, also the "rst time we've detected such a large di!erence, and this is the largest trial. So I think these are quite positive data for shipments.

As you rightfully noted, we have a pipeline of molecules in Sjogren's as we think that this is a very important disease that currently does not have adequate treatment options. Actually, it has no approved treatment options for Sjogren's. And it is one of the larger pneumatic diseases. So huge unmet need in Sjogren's, and we are quite excited that 3 molecules have actually met the primary endpoint, ianalumab, iscalimab that you highlighted as well as a study with remibrutinib that has just been published. So good pipeline in Sjogren's.

To talk a little bit more about lupus. In lupus, what is certainly, if you think about BAFF receptor and the fact that ianalumab is a focus related molecule and thereby depletes the cells. We deplete a much larger and broader B-cell lineate the CD20 molecule. So yes, trial designs have evolved since the early days of CD20 molecules in lupus. But in addition, we are targeting not only -- we are not only depleting a broader B-cell population that is important in lupus.

We are also depressing BAFF levels that tend to increase under B-cell depletion, we are depleting and depressing the BAFF levels that are a key factor that leads to the growth of these B cells. So the dual hit is kind of what we think has led to the very exciting data that we have seen with an early response already at week 24 in an SRI-4 response of 44%, which is quite unprecedented for other molecules. But it's a small study. So we will have to see that we can replicate that in Phase III. We are cautiously optimistic, but very excited about the prospect of this molecule across B cell-mediated autoimmune diseases.

# Kerry Holford Analyst

A couple of questions on remibrutinib, please. Firstly, on the dosing and dose frequency. Could you just con"rm what you're using in the di!erent indications. You mentioned it was higher in MS. So can you clarify what that is?

And indeed, whether you have plans to go from twice daily to once daily dosing, if that's an option and then also, you've raised your peak potentials as the previous update to now more than 3 billion from more than 2 billion. So can you just talk us through what's driven that upgrade and what indications are assumed within that.

## Angelika Jahreis Executive

Yes. So happy to con"rm the dose for chronic spontaneous urticaria, our Phase III studies, we treated patients with 25-milligram twice a day. And for the MS studies that are currently ongoing, we are treating patients with 100-milligram twice a day of remibrutinib. We are, for all of the dermatology indications that we are conducting Currently, we use the 25-milligram twice a day dose.

## Shreeram Aradhye Executive

And then we expect to keep it twice a day, right? That's the kinetics of the...

## Angelika Jahreis Executive

Yes. Yes.

### Shreeram Aradhye Executive

Angelika, I think in terms of the raised guidance, I think it was -- I mean, do you want to comment, but it -- I think it's raised on the basis of the fact of the data that we've seen for CSU, the fact that we believe we have an opportunity to intervene in a population that currently has limited options between antihistamines and biologics.

# Unknown Executive Executive

So I think a couple of things lead us to have the optimism on remibrutinib, one is both in delinquency and share, a very compelling data in CSU with a sizable market population that is in this prebiologic setting. It's an undertreated disease. Most patients ultimately don't get to biologics. So to have an oral option, importantly, with rapid actions. So I think some of the commentary is focused on cross-sell comparisons of the overall e#cacy.

But generally speaking for these patients, they want to see an impact quickly because they're unable to sleep and have a debilitating hives and itch. So to have that response within 2 weeks was something that was our upside case, certainly on the target product pro"le for this medicine. So that caused us to have a lot more optimism on this front. And then I think that, combined with the level of e#cacy we saw with the strong safety pro"le at this dose. And given the data we currently have in other conditions as Angelika mentioned, both us [indiscernible] food allergy in hidradenitis, potentially in other conditions, we'll see about Sjogren's.

There's there's an opportunity, we think, with this lower dose now to make the medicine a signi"cant medicine in immunology alone, irrespective of what we ultimately learned in a much more competitive multiple sclerosis space. And so that means as a stand-alone asset within immunology, we think this could be a lot more commercially compelling.

# Emmanuel Papadakis Analyst

It's me Emmanuel from Deutsche Bank.

A quick follow-on question on the REMIX-1, REMIX-2 data. You commented that 30% approximately patients that already received a biologic. We've seen some other products struggle recently in terms of showing a bene"t in omalizumab experience patients. Could you just comment on the consistency of bene"t you saw from remibrutinib in that subgroup of patients and what we might expect to there foresee in terms of the labeling, it could potentially be both naive and biologic experienced patients? And then a very quick question.

What does the FDA actually want to see in the 52-week data?

#### Angelika Jahreis Executive

Let me start with the latter one. I think, in general, for a new molecular NTT 52-week data is across immunology, what FDA would expect from any molecule in order to be assured of its safety. So 1-year data is not anything atypical. That is typically what we share with the agency for immune-mediated diseases. If it is a new molecular entity for life cycle opportunities that may be shorter, but for initial indications that is just, I think, what we typically expect.

Now with respect to your other question around the consistency of data, we will share these data next year at the ACAAI -- at the quadruple AI meeting. and you can take a look at this data, but the data has been quite consistent. The data will be shown in more detail there in the omalizumab pretreated patients, whereas those patients who were not omalizumab pretreated.

#### Shreeram Aradhye Executive

Okay. Peter? Final question.

### Peter Welford Analyst

Just wondering, has there been any discussion internally to potentially deprioritize multiple sclerosis entirely for remibrutinib? I mean I guess it just seems as though you're setting a higher dose there's a potential for a safety "nding in that study. You are clearly excited by the dermatology potential and advancing that, why jeopardize, I guess, that peak potential versus going for a more competitive market -- or equally, why not go if you are going MS, why not go for the perhaps bigger unmet medical needs, such as primary progressive where an oral could potentially be advantageous rather than pursuing the more competitive relapsing market.

### Shreeram Aradhye Executive

Well, I'll start. I think that the opportunity in MS remains. So I think deprioritizing it at a time when we see no reason to do so. We have the trials running and we plan to deliver them. We believe we have the potential to deliver potentially [indiscernible] e#cacy while impacting disease progression.

That's number one. And I think on the dermatology side, the fact that we plan to take those indications always at the lower dose allows us to expand that dosing into a broader group of immune-mediated disorders. Norman, do you want to talk about primary Progressive?

### Norman Putzki Executive

Yes, I think Well, I actually think the more data we see for this asset, I think the potential of multiple grocer has rather increased and we have not seen any data that would indicate a risk that we didn't think about when we incepted the program at the end of the day. So the more data we are seeing, Phase I, Phase II, now Phase III, this seems to be a very powerful medicine. So -- and for multiple sclerosis, we aspire close to [indiscernible] e#cacy and a clean safety pro"le. And thus far, the e#cacy we need to generate. But from a safety perspective, I think we are just reassured by the data that we have seen.

Primary progressive MS is about 10% of the population. I think generally progressive MS is a high unmet need, and we are working in that space to address particularly independent of relapse activity because we have gotten really good at controlling relapses. In terms of priority, remote generally the BTKI approach. We don't favor it.

We have di!erent plans that we can [indiscernible] talk about. We think they're targeting mechanisms within the CNS more e!ectively than peripheral BTKI modulation should show more promise, but that's an ongoing conversation, and I hope we can talk about this soon in the near future.

# Shreeram Aradhye Executive

Thank you, Norman. With that, I think, Sami, we go to our next mingling break. Yes. So break until 5, and then we start with oncology. Thank you, Angelika.

Thank you, Norman. [Break]

# Shreeram Aradhye Executive

Welcome back, everybody. And now for the review of our oncology portfolio. Again, like we said before, our primary principle here is the opportunity to move our assets into earlier lines of therapy for patients where we have demonstrated the bene"t in a later line, continuing to build our portfolio in the 3 solid tumors that we have chosen to focus on. We've heard a lot of discussions about RLT. So what I'm going to do is to quickly give you an update on Ianalumab in the hematology indications, quick brief on Lutathera and then JDQ.

And then Je!, our Development Unit Head for Oncology will go -- take deep dives on Kisqali, Pluvicto and Scemblix, which I know are of great interest to everyone in the room and on the web. When it comes to lanalumab, we spoke about the unique opportunity for lanalumab to o!er sustained B-cell depletion. And we expect to deploy that modality with the lanalumab administered IV to explore if we can deliver on one key promise, which is can a short course therapy with an lanalumab-delivered IV with 4 doses allow us to achieve disease treatmentfree remission in ITP over time in the presence of reduced steroid doses and in autoimmune

hemolytic anemia, the ability to maintain durable hemoglobin responses. This hypothesis is now being tested in 3 Phase III studies that are ongoing, one "rst line in ITP, a second-line ITP study and then a warm antibody autoimmune hemolytic anemia trial that are all well on their way and recruiting, and we are excited about this possibility. When it comes to Lutathera, we are all aware of the excellent data that we had with Lutathera in gastric enteropancreatic neuroendocrine tumors in the second-line therapy, which was NETTER-1.

I must say that when you look at those progression-free survival curves, with a hazard ratio of 0.18, the dramatic bene"ts that radioligand therapeutic can o!er in a safe, e!ective therapy is certainly that is probably one of the best illustrations. We then decided to evaluate Lutathera in "rst-line therapy, again, in this principle of moving into earlier lines and NETTER-2 delivered positive results that we expect to present at an upcoming congress in the "rst quarter. And then again, keeping the principle of taking a radioligand therapeutic and deploying it against tumors where the target antigen is expressed evaluating the role for Lutathera in both small cell lung cancer and glioblastoma multiforme are early stage evaluations that we are undertaking. And then "nally, when it comes to our interest in lung cancer, an area that we have been present in, we have chosen to take JDQ, our KRAS inhibitor for KRASG12C, recognizing that there's competition in this space, but we believe that our molecule with its unique attributes and speci"c features allows us to dose it in a manner that allow -- it is well tolerated, especially in combination with the PD-1 based on the early data that we have released. And the plan now is to launch 2 Phase III studies with JDQ in combination with pembro.

So we're going to go with PD-1 that is regularly used, and we believe that, that gives us the opportunity to evaluate a role for JDQ in "rst-line non-small cell lung cancer. Those trials are expected to start in the coming months, and we look forward to pursuing that further. Happy to take questions later. But for now, I'm going to hand it over to Je! to take us through a deep dives on Pluvicto, Kisqali and Scemblix. Je!, many of -- actually all of you, I think, know Je!.

Je! has interacted with everyone. Je!, of course, has been involved in drug development in oncology now for more than 2 decades and is a key member of our team. Je!, welcome.

# Je! Legos Executive

Thank you, Shreeram. Lots of you is excited about in oncology. But as Shreeram alluded to, I'm going to focus on 3 medicines today. Although they're in distinct disease entities, they share some common attributes. I think "rst and foremost, these are approved medicines, largely derisked with a proven bene"t risk already in certain patient segments.

I think secondly, there's a clear opportunity for indication expansion, in particular to move these approved medicines into earlier lines of therapy, earlier stages of disease, representing a potential of expanding the bene"t by anywhere from 2 to 4x beyond the existing approved indications. And then lastly, they share commonality around either unique modalities or unique pharmacology, very strong scienti"c rationale, already proven established bene"t risk, thus gives us reason to believe that these are high probability of success opportunities that we are prosecuting. So I'll start "rst with Pluvicto. So Pluvicto remains the "rst and only approved radioligand therapy that targets PSMA for patients with metastatic prostate cancer. And secondly, the data that's already been presented for both the VISION patient population

as well as PSMAfore gives us further con"dence around the opportunity of extending this into either earlier lines of therapy or earlier stages of disease.

And then lastly, also provides us an opportunity to think about how we can actually diagnose patients di!erently using radioligand imaging as well as the potential of treating what we see. So just a reminder of the epidemiology and how patients are treated today. Prostate cancer remains the second most common cancer as well as the second leading cause of cancerrelated mortality in men with nearly 1.5 million new diagnoses each year and almost 400,000 deaths. Although there is a large advancements in the number of new treatments, I think the mainstay principles of how these patients are treated remain fairly consistent. When a patient is initially diagnosed, they undergo local treatment either with de"nitive prostatectomy or localized radiation such as EBRT and then depending on a patient's prognosis, they are either watchful waiting or active surveillance.

Unfortunately, a reasonable proportion of these patients see their disease recur as evidenced by a rise in PSA. At that point in time, patients are then subject to androgen deprivation and/or hormonal therapy, which unfortunately is not curative. And these patients are then subject to either chronic or episodic hormonal blockade up to the point when all of a sudden, they lose their sensitivity or become cash rate resistance. About 35% of patients go on to develop metastases within 2 years of diagnosis. And once a disease metastasized, we see that their 5-year survival rate actually drops o! quite precipitously and the median survival for these patients is only around 30%.

If we look at our overall development plan, our overall ambition is to actually continue to advance the practice-changing bene"t that was observed in the VISION trial and the PSMAfore into earlier lines of therapy. And if you look at the opportunity in these 4 distinct patient segments, you see that we could potentially expand this bene"t anywhere from 2 to 4x the number of patients that are currently treated today. Just as a reminder, for the original VISION trial, which was tested in patients who are second and third line previously exposed to at least 1 or 2 prior lines of therapy, as you see here, this trial met both primary endpoints with the clinically meaningful and statistically signi"cant improvement in radiographic progression-free survival as well as overall survival. I want to just draw your attention to the Kaplan-Meier curve on the right, which is the overall survival data. As you could see here, these Kaplan-Meier curves separate quite early and remain separated throughout the entire duration, a follow-up representing a nearly 40% reduction in the risk of death.

The reason why this is quite notable is in this particular trial crossover was not allowed. So I think these represent the true clinical bene"t that Pluvicto could deliver when the trial is not confounded by subjecting patients to cross over. A similar level of bene"t was observed for radiographic progression-free survival in the PSMAfore trial. These results were recently presented at the ESMO Clinical Congress back in October. And as you could see here, the hazard ratio of 0.41 is quite consistent with the hazard ratio observed in VISION, representing almost a 60% reduction in the risk of radiographic progression-free survival.

And notably, you see the median radiographic progression-free survival time north of 12 months, which is approximately twofold greater than just a switch to an androgen receptor pathway inhibitor. The PSMAfore data also demonstrated robust e#cacy against a range of other clinically meaningful endpoints show favorable safety and tolerability as well as improvements in quality of life, as shown on the slide. I want to draw your attention to the consistency and the meaningfulness of this clinical data but also spend a minute on the overall survival data here, which as previously mentioned, is confounded by the fact that 84% of patients who saw their disease progressed radiographically were then crossed over to receive Pluvicto. Just a reminder as to the why and the how. First was around the why.

When we had designed this trial, we had very robust Phase II data as well as the emergence of the VISION clinical trial data that suggested that there was a clear loss of equipoise for patients who were not receiving Pluvicto. So between our steering committee patient advocates and patients, there was a high demand and high expectation that they would be eligible to receive Pluvicto should their disease recur. The second part was this was - crossover was an option. It was not protocol mandated that they require Pluvicto, and 2 conditions had to be met. Condition number one was that there was independent radiographic con"rmation of disease progression in order to maintain the integrity of the primary endpoint.

And condition number two, the treating physician had to use his or her best clinical judgment to decide whether or not Pluvicto or any other available standard of care was the best and most appropriate next therapy for these patients. And on the basis of those 2 conditions, 84% of patients went on to receive Pluvicto after their disease was con"rmed to progress. If we look at the potential impact that crossover may have had on the interpretability of the overall survival results, I draw your attention to these 2 particular swimmer plots. Note the di!erence in shape as well as the area under the curve for the yellow highlighted bars here. As you can see for the curve on top, this signi"cantly changes the overall trajectory as well as the shape of the curve for patients who received Pluvicto after the disease progressed compared to the bottom curves where ultimately patients did not cross over to receive Pluvicto.

If you look at the potential impact that crossover may have had on the interpretability of the overall survival results, I draw your attention to these 2 particular swimmer plots. Note the di!erence in shape as well as the area under the curve for the yellow highlighted bars here. As you can see for the curve on top, this signi"cantly changes the overall trajectory as well as the shape of the curve for patients who received Pluvicto after the disease progressed compared to the bottom curves where ultimately patients did not cross over to receive Pluvicto. If you look at the estimated landmark survival at 12 months, 92% of patients were estimated to be alive at 12 months compared to 69% of the patients who did not go on to receive Pluvicto. I think at the same time, we also recognize that the data still remain quite immature.

There was only about 134 deaths at the time of this analysis, which represents only about 45% information fraction. So on the basis of that, the trial continues as planned and will continue into 2024 to the next interim analysis, which would actually have about 100 additional deaths and represent about 75% information fraction. And it's on the basis of that, that we would then intend to "le regulatory submissions worldwide. Shifting gears to our second trial that was also started before the "nal VISION trials read out is an opportunity to look at Pluvicto plus standard of care hormonal therapy in patients who had metastatic

disease and were still sensitive to hormonal therapy. So this is an opportunity to look at Pluvicto on the backbone of standard of care androgen deprivation therapy as well as androgen receptor pathway inhibition.

For this particular trial, there was some -- actually very unique reasons behind the why of the study design. I think "rst and foremost, hormonal therapy is noncurative. It basically just suppresses testosterone levels to reduce cell proliferation. But ultimately, these patients are subject to the disease continuing to grow or recur years after or within months of treating therapy. Secondly, although radiation can sometimes be used in this particular patient population, it's not without limitations.

Radiation is reserved for very localized therapy. It can have debilitating tissue on surround - or debilitating e!ects on local surrounding tissue and/or healthy cells, and it's unable to sort of reach a broader, more metastatic set of lesions. And then lastly, there's some unique biology that's really emerged over the years that as you continue to suppress the hormonal access, uniquely, you get upregulation of the PSMA antigen, which is a key criteria which drives e#cacy for Pluvicto. So it's for those 3 reasons that we set forward to design this trial, we have fully completed enrollment, where we've randomized 1,144 patients. And this trial is ongoing with the primary endpoint of radiographic progression-free survival.

The most recent addition to our Pluvicto development plan is this new trial that's now released on clinicaltrials.gov. This is an opportunity to move Pluvicto into an even earlier line or potentially earlier stage of disease where we talked about it being local regional disease in patients who are biochemically recurrent disease and already have oligometastatic disease up to 5 lesions. Interestingly enough, when we talk about oligometastatic disease and/or metastatic disease, we often refer to that using conventional imaging, MRI, CT scan, bone scan. But here, we're talking about a new way of diagnosing patients using a PSMA labeled PET tracer. So here, these patients are diagnosed and enrolled on the basis of being PSMApositive, it's a metastatic disease using nonconventional or novel imaging.

This trial looks at the addition of Pluvicto following standard course of SBRT in these patients with the primary endpoint being metastasis-free survival and another very, very important and clinically meaningful endpoints would be the time to delay or the time to hormonal treatment because we know very well that taking androgen deprivation therapy and/or androgen pathway blockade is not without a signi"cant number of side e!ects and compromising the quality of life for these men. So as we look forward to some of the upcoming next steps, it would be to "le the PSMAfore data in 2024, continue to track events for the PSMA EDITION trial. You'll note here that we have revised the date for our primary analysis to be in 2025, that's based on a combination of where we are with the radiographic progression-free survival events as of today in addition to those projections over the next year to 1.5 years, combined with having an adequate number of survival events at the point in time when we read this data out in 2025. As an event-driven trial, we'll continue to keep this group updated if anything changes from these initial projections. And then we are on track for study start-up with the delayed castration study in 2024.

So now maybe shifting gears to Scemblix in hematology. I think this represents a very nice opportunity to build in not only our leadership but our legacy in chronic myelogenous

leukemia. For Scemblix, in particular, this is our "rst-in-class oral STAMP inhibitor that was uniquely designed to minimize the resistance that occurs from the "rst or second-generation TKIs. And at the same time, because of the allosteric mechanism of action, improve the tolerability of upon the existing therapies. This drug was approved on the basis of data that emerged from a Phase III study called ASCEMBL, and we now have almost 4 years of followup that have recon"rmed a sustained and deep major molecular response as well as very favorable safety and tolerability compared to the second-generation TKI such as bosutinib.

It's on the basis of that 96-week data that this drug is now approved in more than 60 markets worldwide. If we think about the approved setting as of today, which is in patients with third line plus. Currently in the U.S., we've seen our NBRx up to 35% and our total market share right around 20%. We're starting to see some use in the second-line setting, speci"cally in patients that have developed the T315I ATP gatekeeper mutation has indicated within the existing label of Scemblix product. And if we look at the real opportunity for Scemblix, it's to move it into the frontline newly diagnosed CML.

And this represents the potential to have up to 4x more patients bene"t from these deep, sustained major molecular responses. Here's just a reminder of the ASCEMBL Phase III data and the 96-week data that served as the basis to convert our initial accelerated approval in the U.S. to full con"rmatory approval. As you could see from the slide here, we have more than a doubling of the major molecular response rate compared to bosutinib. And we have about a 4x lower discontinuation rate due to adverse events compared to bosutinib.

I think some of the reasons why we are seeing these deep, sustained major molecular responses as well as the improved tolerability is because of the very innovative and unique chemistry. This is quite opposite in terms of how it binds to the BCR-ABL protein. It binds speci"cally to the Myristoyl pocket compared to the "rst and second generation competitive ATP binders. When this drug binds to the Myristoyl pocket, it actually causes a con"rmational shift rendering the BCR-ABL protein inactive and thereby precluding it from developing the traditional mechanisms of resistance like the "rst and second-generation TKIs. If we look a little deeper around the overall selectivity for Scemblix, as you could see from these kinome trees highlighted in yellow is very speci"c where Scemblix actually binds with a high degree of speci"city and very limited to no o!-target kinase activity.

In contrast to the range of "rst and second generation inhibitors where you could see that they are quite ubiquitous in terms of o!-target kinase activation as highlighted by the red circles on these kinome trees. If we think about why we believe this could be an interesting opportunity for patients in the front line, there are a few limitations or shortcomings around the "rst and second-generation TKIs. If we start by thinking about the overall treatment goal for patients with CML, it's to get them to be treatment-free remission. Unfortunately, despite the best of all available therapies today, only about 20% of patients actually achieve a treatment-free remission. And unfortunately, it takes about, on average, 8 years for patients to get there.

If you look at the totality of the data, this is actually not surprising because even as early as a year, there's about 60% of patients that fail to achieve the major molecular response or a deep molecular response, which has a high degree of correlation to long-term outcomes and long-term bene"t. That, coupled with the challenge that patients can become refractory or intolerant to "rst or second-generation TKIs, represents a clear opportunity for Scemblix, which is exactly why we had designed this trial of Scemblix with 2 co-primary endpoints comparing the e#cacy at 48 weeks of Scemblix to investigator choice TKI and also a second primary endpoint comparing Scemblix directly to imatinib. Some of the basis for this is because we recognize that geographic prescriptions and patterns of use between the "rst and second-generation TKIs do vary quite dramatically. But roughly, it represents about 50% to 50% of investigator choice. So this trial is uniquely designed to attest both hypotheses.

The alpha has been split accordingly in terms of the primary endpoint, which is a 48-week major molecular response. We also have other important measures of e#cacy, safety, patient-reported outcomes and quality of life measures built into this trial. Trial is fully enrolled. We are currently in the process of gathering our data, and we expect the data to be available in the "rst half of 2024. Last but not least, shifting gears to Kisqali.

So Kisqali continues to have very strong performance in the metastatic setting, seeing our NBRx now approaching 50%, which is actually a doubling from just 1 year ago based on the very strong e#cacy we've observed across 3 clinical trials. We've also made considerable progress in the early breast cancer setting, where we've actually already "led the NATALEE data in Europe and in Switzerland. We now have updated data on the basis of 500 iDFS events, which will be presented later this year at the San Antonio Breast Cancer Conference. We have already sort of shared this data with health authorities worldwide, including the updated overall survival data. And we have completed our pre-submission meeting with the FDA, and we have aligned with them that this data would serve the basis of our regulatory submission in the U.S., and we are currently on track to "le that data by year's end with the FDA.

It's not surprising that Kisqali is doing so well, and I think it's on the basis of very robust Phase III data in the metastatic setting, where we've shown a consistent overall survival bene"t and maintain quality of life across 3 independent trials regardless of menopausal status regardless of hormonal partner, regardless of baseline clinical characteristics. And I think this degree of consistency and reproducibility also lends to a very strong foundation in support of our ambition in early breast cancer. And we've actually seen patients even in the metastatic setting stay on trial as long as 8 years and continue to derive bene"t from Kisqali. If we look at the opportunity in early breast cancer, it does remain an opportunity of high unmet medical need. And with respect to the overall risk of recurrence, it's actually quite notable for patients with either Stage II or Stage III early breast cancer, where the rates could be as high as 50% recurrence over the course of 20 years.

So NATALEE was uniquely designed to capture this broad patient population of patients who are at risk for recurrence early as well as late following de"nitive surgery and/or chemotherapy plus or minus radiation depending on the stage of disease. I'm going to just spend the next few slides to talk about a few key important insights that were instrumental not only in the design but the conduct as well as the interpretation of the "nal results of the NATALEE trial. So "rst and foremost is around the unique pharmacology and the rationale behind 3 years of continuous dosing. So "rst, around the pharmacology. It's quite evident that the speci"city and selectivity for CDK4 is very important for patients with breast cancer and

much higher for CDK4 relative to CDK6 for Kisqali, that coupled with a higher degree of free drug concentration as well as a long half-life, we believe are important attributes that allow more time on target with chronic dosing out through 3 years to push more cells into irreversible cell cycle arrest and then ultimately lend itself to long-term bene"t.

If we look at the rationale for designing a study with a broad patient population, I talked about the risk across Stage 2 and Stage 3. But if we use the graph on the left, which focuses exclusively on patients with Stage 2 disease, with or without nodal involvement, you could see this risk over a period of 2 decades is as high as 30%. And if you plot out exactly where we are looking at the control arms on NATALEE, patients with Stage 2 disease, with or without nodal involvement, have already observed to have a 10% recurrence rate as early as 3 years. So providing further data and further a#rmation that these patients are at risk for recurrence. And then lastly was around our dose selection.

So we had chosen to take 400 milligrams into the adjuvant setting on the basis that we wanted to sort of improve adherence and tolerability while maintaining e#cacy. If you look at the data that we presented at the most recent ESMO conference, which went a little deeper into some of the prespeci"ed subgroups, you see this high degree of consistency in terms of the iDFS bene"t as it related to the primary endpoint regardless of stage, regardless of menopausal status, regardless of nodal status, age and other important characteristics like Ki-67. If we look at the overall safety of 400 milligrams in the adjuvant or early breast cancer setting, there was no new safety signals that were identi"ed. The 400-milligram dose was very well tolerated with a limited need for dose reductions and/or dose discontinuations due to AEs. When we talk about the dose discontinuations due to AEs being around 19%, just as a reminder, more than half of these were protocol mandated by laboratory "ndings in the liver abnormalities that did not return to baseline over a period of 4 weeks.

This is not a limitation or a restriction in our current U.S. product label in the metastatic setting. But nonetheless, it was important in the adjuvant setting, this was our "rst time taking Kisqali into a Stage II and Stage III patient population. If we look at the overall quality of life in the adjuvant setting, one would not expect that you would see an improvement of quality of life because these patients aren't su!ering from over bulk metastatic disease. So the feeling or the expectation that they should feel better was not one that we set out to do.

The goal was to be able to demonstrate that adding Kisqali on top of standard of care, endocrine therapy would not alter the quality of life. And here, we show that quality of life was maintained throughout the entire dosing duration for the early breast cancer setting. So in closing, the next steps for Kisqali hopefully are quite obvious. So we continue to sort of advance this new data towards San Antonio Breast Cancer. I'm sure everybody is well aware that the abstracts will be released later on this evening just shortly after my talk within a few hours.

The data is still embargoed at least for the next 4 or 5 hours, but it will be presented on the Friday of San Antonio Breast Cancer Conference. We are on track for "ling in the U.S. in December of 2023. We've announced here that we intend to use our priority review voucher. And based on the overall patient population enrolled as well as the consistency of bene"t across all prespeci"ed subgroups as well as all prespeci"ed clinically relevant endpoints, we are also seeking a broad label consistent with the patient population enrolled.

So with that, let's turn it over to Shreeram back up and open it up for Q&A.

### Graham Parry Analyst

Graham Parry from Bank of America. I've got 2 on [ Scemblix ], one on NATALEE -- on Pluvicto, I know this was addressed a little bit on the Q3 call, but just going to have another go in terms of the OS cut that the FDA wants to see. If you were to see essentially the same hazard ratios in both the ITT and the crossover adjusted analysis. But just with more events, is that essentially what the FDA is looking for? Are they looking for improvement on those measures say some sort of statistical signi"cance or not or the [ 1.16 ] coming down?

That's the "rst question. The second was just on VISION. It's a bit more of a commercial one actually, but you're now saying \$2 billion in the VISION population and \$2 billion in the earlier lines, \$40 million plus in the other lines, but that seems to have shifted a little bit more to earlier. So is something else going on here that you think you can penetrate more patients in post-taxane with less con"dence in the pre-taxane? And then the third question, just on the NATALEE, the 500 iDFS events.

I think you said this is consistent with the prior data. Is that consistent just on quantum of hazard ratio also consistent on P value as we know OS bene"t shown with statistical signi"cance yet?

#### Je! Legos Executive

Graham, maybe I'll take a stab at the "rst one, and then Vas, I'll pass it to you in terms of the commercial question. So in terms of FDA expectations around overall survival, there is no absolute or de"nitive guidelines around exactly what they need to see. I think when we designed the trial, we obviously expected that crossover would occur, but couldn't have predicted exactly how much. That is, in particular, why we had put in the prespeci"ed adjusted overall survival analysis to account for the fact of crossover. And just as a reminder, that hazard ratio was 0.8.

I think one of the biggest challenges we had around the interpretability of the data at the last analysis was the relative immaturity of the data. So I think what's really important at the next analysis is the fact that we'll have up to 100 additional deaths and a 75% information fraction. And I think that beyond the hazard ratio for overall survival, whatever it may be, it's important to continue to look at the overall totality of the data, which is actually quite robust across all of the prespeci"ed clinical endpoints, quality of life as well as favorable safety. Maybe with that, Vas, I'll turn the second question to you.

### Vasant Narasimhan Executive

Thanks, Je!. So when you look at the commercial potential, I mean what our intention is to clarify that we believe in the vision population alone. We have multibillion-dollar potential based on the outlook that we're currently seeing in the U.S., ex U.S. or unconstrained supply, the overall demand signals that we're seeing. We would expect each of the additional indications have signi"cant potential.

So we're not saying \$2 billion per se for the additional indications, but multibillions, which can be more or whatever based on how the data evolves. Certainly, as you saw from Je!'s slides, the patient populations, if you combine the hormone-sensitive and the castrate resistant populations together, they're 2.5x the population of the post VISION population alone. So there's a lot larger population that we would then be able to compete in. And that's certainly the intention.

# Je! Legos Executive

And maybe to your last question, Graham, obviously, you'll see the data in just a few hours. So because it's still under embargo, I can't give the speci"cs. But what I can say relative to survival and the consistency is we continue to show no detriment as per the de"nition related to the OS point estimate. I think you'll see a little bit more later, but we did not reach statistical signi"cance at this point in time nor is that required in an adjuvant setting at this point.

## Shreeram Aradhye Executive

I think my only build is that I do want to leave everyone with this principle that Je! and I often discuss that as you move into earlier lines of therapy, it is -- the expectation is that you don't show any detriment on overall survival. And the interpretation of that conclusion depends both on the point estimates, the overall con"dence intervals as well as actually the totality of the clinical data along the lines of what Je! showed in the very interesting swimmer spot. So we expect this to be a sort of a holistic discussion on the back of a drug that's clearly shown an amazing bene"t that's consistent across progression-free survival.

# Peter Welford Analyst

Peter Welford at Je!eries. Two questions again. Just going back to Pluvicto, "rst of all, on the PSMAfore population and the overall survival, I guess, what happens if the not adjusted for the normal PSMfore actually does reach [ stat-sig ] on OS because I mean it's actually -- the con"dence interval is actually closer to reaching stat-sig for a detrimental e!ect, if you like, than it is for the -- it's a crossover adjusted. And I appreciate -- I think any of us doubt that this therapy is e!ective. But I guess, what does that mean?

I mean that sort of suggests essentially that you're better o! waiting using this therapy from an OS perspective, despite how sort of contradictory that may seem. And then just secondly, what's the rationale for using the 4 cycles of therapy in the oligometastatic setting rather than the 6? And I guess, any thoughts on Pluvicto in the real world, what you're seeing in terms of 4 versus 6 versus perhaps more therapy?

## Je! Legos Executive

So Peter, I'm happy to start with, I think, the "rst question. And obviously, I don't want to speculate as to what the future results would hold. But regardless of the hazard ratio, I think the same conversation, right, still has to happen. It's the overall totality of the data and the understanding as to what confounding factors may have led to an outcome with respect to overall survival. I think "rst and foremost, maybe to reiterate some of the other principles that the FDA highlighted in their FDA AACR industry workshop this past summer.

So I think when they're looking at the totality of the data beyond a given clinical trial, I think one of the things they look for is, has this product previously demonstrated an overall survival bene"t in another setting? And the answer is yes, based on the VISION trial. I think the second thing that they would look for is, are there any confounding factors, albeit crossover and/or subsequent lines of therapy that would explain the potential overall survival data. I think what's very clear is you see the confounding factor of crossover. What I didn't present today is the potential other factors that may have actually contributed to this.

Beyond those crossover patients, there's another handful or so of patients that receive PSMA targeted therapy in the commercial and/or academic setting. The proportion of patients that went on to receive subsequent therapies, such as chemotherapy, right, was balanced across 2 treatment arms, so it didn't preclude the ability for patients to go on to receive other existing standards of care. When you look at the number of on-treatment depth, they were quite low across both treatment arms. So we don't believe that we're introducing any harm or detriment from a safety standpoint. And as Vas mentioned earlier, the safety pro"le is actually quite impressive and highly tolerable in this setting.

So we don't believe we're introducing any untoward risk. I'll draw upon one last point from our experience with Lutathera, where we have much longer follow-up data. And the reason why I'm drawing on Lutathera is because it uses the same dose in terms of the gigabecquerels and the same number of cycles. And there, we've looked at 5-year outcome data in Lutathera, and we didn't have any increased risk for secondary malignancies or new primaries. So I think all of those factors would also plate into account to no detriments.

And Peter, you have to remind me again of the second question. Yes, I think in the early oligometastatic setting, here, you're talking about combining traditional radiation on top of the radioligand therapy. So based on the advice of our steering committee, that's where they have initially focused us. But I don't think we know exactly the optimal number of cycles in early-stage disease. But I can con"rm in PSMAfore, right, the median number of cycles were 6.

About 75% of patients received at least 5 cycles, right? So we do see a very high proportion of patients completing the intended therapy.

# Unknown Executive Executive

There's one from web. Yes. So Tim Anderson from Wolfe. On Pluvicto, Slide 119 indicates there is no compound patent yet in Europe, which seems kind of surprising. Is there a risk it seemed to be not patentable in this particular geography?

Maybe it doesn't really matter given its [ ROT ]. On Kisqali, your peak sales guidance is \$4 billion. But as you know, that is only for approved indications, which is metastatic in this case, when NATALEE does get formally approved, can we expect you to update that guidance in '24 in a sense quantifying the early-stage commercial opportunity?

### Vasant Narasimhan Executive

I think in Europe, it's probably not as relevant in the end, the compound patent, given the complexity of the manufacturing is much more with respect to know-how and the capacity and capability. There are various PSMA available through academic centers. What really is the di!erence is having industrial scale and the capability to produce this and be able to deliver it within 5 days to the patient. So I think not -- we don't believe particularly relevant for our EU outlook for Pluvicto. In terms of the Kisqali adjuvant setting, so you're right, Tim, that we guided to \$4 billion on the metastatic indication.

I think once we have the adjuvant approved and we start to see the initial sales trends, we'd be in a better position, I think, to provide updated guidance. I wouldn't want to commit to a speci"c time line as to when we do that.

## Richard Parkes Analyst

Richard Parkes from BNP Paribas Exane. I've got one on Pluvicto and one on Scemblix. On Pluvicto, ESMO, it felt like some physicians were talking about focusing capacity for Pluvicto to patients with very high PSMA expression levels. So can you talk about what you saw in PSMAfore in that population? And what's the likelihood that ultimately Pluvicto gets more limited use in that population?

And then secondly, on Scemblix, both Tasigna and [ Sprycel ] have had "rst-line labels but haven't been able to fully unlock that opportunity given 50% of uses "rst line still imatinib. How much of a challenge will it be to -- for you to unlock that given that we'll also see generics to both those agents? And I'm just wondering how much you might need overall survival or treatment-free interval data, which is going to take a very long time to generate?

## Je! Legos Executive

Yes. Two very important questions, Richard. So maybe starting with Pluvicto. So from the VISION trial, we do see that some of the best responders, the super responders are patients as expected, with the highest degree of SUV uptake, either max or mean. That being said, we also see very good responses in patients with low uptake or lower expression of PSMA.

We haven't reported out that data for PSMAfore. That will be part of an updated medical congress in 2024. But I do not believe it to be a limitation or a reason for physicians to segment the patient population based on the overall bene"t observed across 2 trials as well as the safe and favorable pro"le that Pluvicto does provide. With respect to Scemblix, I think it's a great question, and that's why we designed the study as we did to be able to provide a robust body of evidence across the investigator choice of TKIs, not just with respect to a major molecular response, but also to the relevance of quality of life and the safety of the product. If you think about these "rst and second gen TKIs, they do bring a high degree of cytopenia to patients, so they're often fatigue, susceptible to infection.

There's some signi"cant GI side e!ects as well as a risk for cardiac toxicity. So I wouldn't underestimate the possibility of patients switching or using Scemblix just purely on the basis of the safety and tolerability. That being said, e#cacy is really important for these patients and really important for the community of physicians that would intend to use this product. And there, we've designed the studies to demonstrate clear superiority in a clinically meaningful way over the existing TKIs as well as in the subset of patients with just imatinib and I think they're looking at our historical experience, we have a high degree of knowledge and insight correlating major molecular response at week 48 to long-term outcomes. So I

think through our existing data sets as well as real-world observation, reinforcing the correlation and the importance of control at 1 year will hopefully guide uses of Scemblix should the data become positive.

## Seamus Fernandez Analyst

Seamus Fernandez from Guggenheim. So just hoping you could maybe give us a little bit of an update on the DLL3 deal that you signed with Legend and how you're approaching that? And maybe a little bit of your enthusiasm for that particular target, especially in the wake of the old Stemcentrx situation.

## Je! Legos Executive

I know Fiona mentioned it a little bit earlier, but I'll talk about kind of the reasons why we are excited. I think "rst and foremost, the target itself is highly and homogeneously expressed in patients with small cell lung cancer. I think secondly, in terms of the Legend product itself, it is a biparatopic inhibitor that a!ords a high degree of potency with respect to this target as well as the armoring nature, which hopefully will help it overcome a traditional and highly immunosuppressive tumor micro environment. And then lastly, by bringing it into Novartis and applying the T Charge platform, we believe that we could further enhance the stemness -- or the T cell "tness or stemness around the product to hopefully introduce potential greater e#cacy for patients with small cell lung cancer. I did want to take a moment, Shreeram, just to address Mark's question from the plenary, which you talked about combinations for Pluvicto.

Maybe to start, we are already combining or experiencing combination-based therapies with Pluvicto with respect to combining on top of ADT, ARPI, and now it will be with SBRT. I think for Lutathera, as Vas articulated, we're already combining with systemic chemotherapy. We're combining it with anti-PD-L1 therapy. So when I think about some of the important principles around combination therapy, "rst and foremost is the safety and tolerability of Pluvicto. And we believe it has the ability to combine with multiple modalities, which could a!ord us greater e#cacy and may potentiate double-strand DNA breaks.

I think the second part that I want to reiterate is if we look at the early data with Lutathera and/ or Pluvicto in late line or last line, we probably underestimated the true possibility as a single agent because the response rates were rather low. They were in the low to mid-teens. But as we move this product into earlier lines of therapy, and in particular, PSMAfore, the data that was shared at ESMO showed an overall con"rmed response rate of 44%, and we actually had a CR rate of 21%. So the ability for these products to truly eradicate cancer cells may be even greater as we move it into earlier lines of therapy. That being said, because of the combined ability, it's opportunities to combine orthogonally, opportunities to combine with systemic immunotherapy and/or T cell engagers, opportunity to combine with systemic chemotherapy or antibody drug conjugates, and we are exploring a range of permutations in both prostate cancer as well as other disease areas.

## Shreeram Aradhye Executive

And I think what our new organizational ways of working allows us to do is to approach that complexity in a very structured manner that accounts for all the necessary skills that come from parts of the research translation in our organization.

### Eric Le Berrigaud Analyst

Eric Le Berrigaud, Stifel. One quick question about maybe one threat to the CDK4/6 on the horizon with other CDK, where is Novartis on this? Could you share your thoughts? And when could we expect to hear more about this from you?

### Je! Legos Executive

I think important question, Eric, and maybe I would broaden it to what is the overall kind of life cycle strategy in breast cancer. So when we think about kind of the near-term opportunities and leveraging our platform, if you want to touch a little bit around the gastrin releasing peptide program, which shows a very high degree of expression in patients with HR-positive breast cancer, and we've already rea#rmed our Phase II dose, and we are moving that into studies post Kisqali in combination with chemotherapy as well as in combination with Kisqali, especially in patients who are believed to be some of the poor responders based on certain phenotypic criteria that would be available at baseline. I think beyond that, I think Vas previously mentioned our intent and our ongoing research programs that are looking at the CDK speci"c inhibitors. And I'm actually very pleased to see that the "eld has moved in this direction because it was Novartis that really led in this space, focusing on the importance of CDK4 over CDK6, as the basis to start to generate speci"c inhibitor. So more to come on our research programs as they advance towards the clinic.

#### Simon Baker Analyst

Simon Baker from Redburn Atlantic. Just going back to PSMAfore. Je!, you said there are no hard and fast rules from the agency on the e!ect and impact of crossover. What about the adjustment method used? Does the agency have any guidelines on that?

I know the EMA have discussed this. I don't know about the FDA. So any thoughts on that would be useful. And then on Scemblix, do you see -- or have we observed any mutations around the Myristoyl pocket? Or is it well conserved?

#### Je! Legos Executive

No. Simon, 2 very important questions. So we have discussed with the FDA speci"cally around the risk-adjusted crossover methodology. And there is a range of about 5 di!erent choices. In this particular ranked preserve structural failure time is believed to be one of the most robust and a very important data set that the FDA would look at as part of the overall assessment.

We have o!ered up the opportunity as additional sensitivity analyses to run every and any other statistical method, but the FDA felt comfortable with the one that we already provided. With respect to the mechanisms of resistance, obviously, we continue to look at that as part of the ASCEMBL Phase III data. And at least up through 4 years of follow-up, we haven't observed any particular pattern, mechanism of resistance new mutations. But nonetheless, we are serially collecting plasma from these patients to look at the emergence of new mutations over time, and we'll continue to follow patients.

## Shreeram Aradhye Executive

Thank you, Je!. All right. Okay. So I think it's now for the "nal close. So thank you all for your attention this afternoon here in London.

I think we -- as you've seen from us, we are looking forward to a number of key events occurring across our pipeline now through 2027. I think we've gone deep on essentially most of the medicines that we have on this slide here, and we look forward to continuing our work on making sure that we can deliver them to plans. I'll leave you with the "nal image of our con"dence in our company and how we expect to deliver the expected and upgraded guidance for growth through '27 and beyond with well-established brands on the top there that are part of that journey and perhaps more insights for you this afternoon on the programs in development that we expect to contribute to that growth. Thank you again for your attention, and Vas do you want to say a "nal close.

### Vasant Narasimhan Executive

I also just want to thank you -- thanks again to everybody who joined us here in London, everyone who's followed us as well online. I hope you sense our enthusiasm about our ability to deliver 5% plus growth in the coming years to 40% margin. But also most importantly, the conviction that we have that we have an R&D engine that can keep generating assets to replace our sales, enable us to grow consistently in the mid-single digits really leading platforms in important areas of medicine that we think can transform the care patients in the longer run and a great set of R&D leaders who can lead these programs consistently over time. So we look forward to keeping you up to speed and, of course, at earnings in late January. And in the meantime, I wish everyone happy holidays, and thank you again.