Novartis today reported 1998 Group sales of CHF 31.7 billion, an increase of 5% in local currencies or 2% in Swiss francs.

Healthcare (+7% in local currencies)

Key growth drivers in Pharmaceuticals (+6%) throughout the year were: Aredia(R) (cancer, +61%), Sandostatin(R) (acromegaly, +38%), Cibacen(R) (hypertension, +27%), Foradil(R) (asthma, +27%), and Miacalcic(R) (osteoporosis, +21%). Flagship product Sandimmun(R)/Neoral(R) maintained its status as the gold standard in transplantation, exceeding sales of CHF 1.8 billion (+5%). The new-class anti-hypertensives Diovan(R) and Co-Diovan(R) together achieved impressive full-year sales of CHF 409 million. The leading antifungal Lamisil(R) (+5%) has captured significant market share in Japan and the US. Supported by added marketing impetus and its launch in Japan, the cholesterol-lowering agent Lescol(R)/Lochol(R) overcame fierce competition to post full-term growth of 1%. Simulect(R), a novel treatment to prevent acute rejection in transplantation, has gained rapid acceptance by all major transplant centers in the US. Exelon(R) (Alzheimer's disease), now approved in 44 countries and available in 28, awaits approval in the US, whereas Sandostatin LAR(R) received US registration in November. Regionally, Europe performed well throughout the year. Difficult economic conditions and healthcare cost containment measures in Japan were partly offset by the launch of Lochol(R) and the success of Lamisil(R) tablets.

Generics (+13%) boasted vigorous growth, with outstanding performance in cephalosporin-antibiotics and other industrial generics. Retail generics had to compete in tough market conditions in Germany, but achieved solid growth in Eastern Europe, Asia and Latin America. Sustained improvement in the US continued in the fourth quarter. The acquisition of Hoechst Marion Roussel's fermentation plant in Frankfurt, Germany, was finalized in November and will contribute to the future antibiotics business.

CIBA Vision (+9%) topped a good year with excellent fourth-quarter growth. Ophthalmics posted strong growth, with Voltaren(R) Ophthalmic (anti-inflammatory) and Viscotears(R) (gel for dry eyes) leading the way.
Spurred by the performance of the Focus(R) line of contact lenses, Optics continued to develop well. The innovative daily disposable contact lenses Focus(R) DAILIES(TM) have established a leadership position in major European markets. Focus(R) NIGHT & DAY(TM), a revolutionary extended-wear contact lens, was introduced in Mexico, the first test market.

Agribusiness (+4% in local currencies)

Crop Protection (+2%), Insecticides, Turf & Ornamentals and Seed Treatment all performed well, while herbicide sales slowed, principally in the US, because of low commodity prices and competitive price pressure. Growth was strong in Latin America, particularly in Brazil, and in the Asia Pacific region. In Europe, good results in the Benelux and southern countries were offset by increased competition in the fungicide market early in the year. Generally, impressive sales were achieved by the herbicide Topik(R), the fungicide Ridomil Gold(R) and the insecticide Vertimec(R). Cruiser(R), a seed-treatment insecticide specifically developed for corn in dry farming conditions, got off to a fast start in South Africa following approval in August.

Seeds (+12%) reported considerable expansion of corn sales in the US, supported by a strong demand for the genetically-improved Bt hybrids. The high quality of Novartis' seeds generated dynamic sales in sunflowers in Europe and in soybeans in the NAFTA region. Sugarbeet sales were affected by acreage reductions in Europe. Sales in Vegetables and Flowers showed momentum in all major markets.

Animal Health (+5%), sales of Sentinel(R) (flea and worm control) almost tripled in the US, underpinning the company's position in pet parasite control. Program(R) 6-month injectable, a novel single-dose flea protection for cats, was introduced in the US, Europe, Japan and Australia, strengthening Animal Health's leadership in flea control. Clomicalm(R), for separation anxiety in dogs, was launched in Europe and approved in the US. The farm animal business grew well in Latin America and, through the acquisition of Young's, in Australia and New Zealand.

Consumer Health (+3% in local currencies)

Nutrition (+6%) is on track with its program to divest non-core brands, having sold its Swiss snackfood business Roland and its US medical distributor Red Line. The Italian sugar-free business was divested at the end of the year and an agreement to sell Novartis' participation in the Swedish snackfood company OLW was signed. Only two of the major non-core brands (Wasa(R) and Eden(R)) remain to be sold. Infant & Baby Nutrition was lifted by the strong growth of its organic line Tender Harvest(TM), in the US, and the above-market performance in Latin America. In Medical Nutrition, ReSource(TM) and the Health Care Food Services business continued to perform very well.

Self-Medication (-2%) reported increased sales of Fenistil(R) (itchy skin complaints), Venoruton(R) (venous complaints) and Nicotinell(R) (smoking cessation). In Europe, growth was satisfactory and in line with the market. In North America, market share was maintained in key-segments, but sales development was constrained because of one-time inventory adjustments by the rapidly consolidating retail industry and a weak winter cough-and-cold season in the US. An agreement was signed in December with Kao Corporation to jointly enter the consumer healthcare business in Japan.

1998 Results

Novartis is now reaping the major cost savings from merger synergies. For the full year, an increase in operating margin is expected. In addition, net financial income will reflect the impressive investment performance. As a result, a marked improvement of net income is foreseen. Full details will be published with the annual report on March 16, 1999 at the financial results press conference.

Novartis is a world leader in Life Sciences with core businesses in Healthcare, Agribusiness and Consumer Health (Nutrition and Self-Medication). In 1998, Novartis Group sales were CHF 31.7 billion, of which CHF 17.5 billion were in Healthcare, CHF 8.4 billion in Agribusiness and CHF 5.8 billion in Consumer Health. The group annually invests more than CHF 3.6 billion in R&D. Headquartered in Basel, Switzerland, Novartis employs about 85,000 people and operates in over 100 countries around the world.

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