Group first half net sales rise 15% (+17% in local currencies) to USD 17.5 billion on outstanding underlying sales growth and contributions from recent acquisitions
- Pharmaceuticals net sales up 8% (+10% lc) on strong US performance and double-digit growth in Cardiovascular, Oncology and Neuroscience franchises
Group first half operating income advances 21%, supported by all divisions
- Pharmaceuticals operating income climbs 11%, margin expands to 30.7% of net sales on productivity gains
Net income climbs 17% to USD 3.67 billion in first half and EPS rises 16% to
USD 1.56 per share
First-half results heavily impacted by charges relating to Chiron acquisition. Excluding these charges, Group operating income advances 27% and net income up 23%
New clinical data underscore potential of highly-rated Novartis pipeline, particularly for Galvus (type 2 diabetes), Rasilez and Exforge (hypertension), and Tasigna (cancer)

Key figures First half
H1 2006 H1 2005 % Change USD m % of
net sales USD m % of net sales USD lc
Net sales 17 483 15 140 15 17
Operating income 4 262 24.4 3 529 23.3 21
Net income 3 669 21.0 3 123 20.6 17
Basic earnings per share/ADS USD 1.56 USD 1.34 16

Second quarter
Q2 2006 Q2 2005 % Change USD m % of net sales USD m % of
net sales USD lc Net sales 9 182 7 799 18 18
Operating income 2 060 22.4 1 849 23.7 11
Net income 1 713 18.7 1 646 21.1 4
Basic earnings per share/ADS USD 0.73 USD 0.70 4
Excluding Chiron charges, Q2 Group operating income up 23% and net income up 15%

Basel, July 17, 2006 - Commenting on the results, Dr. Daniel Vasella, Chairman and CEO of Novartis, said, "I am pleased with our strong performance in the first half of 2006. Our strategic focus on healthcare delivered dynamic growth, with all divisions achieving excellent results expanding their market share. The Pharmaceutical division strengthened its competitive position, particularly with our cardiovascular and oncology products advancing at strong double-digit growth rates. Productivity gains in the second quarter were strong as we prepare for the launch of several potential blockbusters for the treatment of patients with type 2 diabetes, hypertension, asthma and eye diseases. Led by our strategy and our commitment to innovation, I am confident that Novartis will continue to grow strongly and achieve another year of record sales and earnings."

Group outlook
(Barring any unforeseen events)
Delivering dynamic growth from its medicine-based portfolio, Novartis is preparing to launch a series of new products that address urgent medical needs and have significant sales potential. The addition of a fourth division - Vaccines & Diagnostics - following the Chiron acquisition provides a new strategic growth platform. For the full year, double-digit net sales growth in local currencies is expected for the Group, while Pharmaceuticals net sales are seen growing in local currencies at a high-single-digit rate. Record levels of operating and net income are expected in 2006.