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  * FREEDOMS study shows FTY720 reduced relapse rates by 54-60%
    compared to placebo, and disability progression by 30-32%[1]

  * Results build on Phase III TRANSFORMS one-year study showing
    FTY720 reduced relapses significantly more than interferon
    beta-1a, a standard of care[2]

  * Phase III efficacy and safety data confirm positive benefit-risk
    profile for lower 0.5 mg dose[1] and support planned submissions
    in US and EU at end of 2009

  * Future development of FTY720 in relapsing forms of MS to focus on
    lower 0.5 mg dose

Basel, September 30, 2009 -  Initial results from the two-year  Phase
III  FREEDOMS   study  show   that  oral   FTY720  (fingolimod)   was
significantly superior  to  placebo  in reducing  both  relapses  and
disability progression in patients with relapsing-remitting  multiple
sclerosis (MS)[1]  -  one  of  the  leading  causes  of  neurological
disability in young adults[3].

The FREEDOMS study met its  primary and secondary endpoints for  both
the 0.5  mg and  1.25 mg  doses, with  no significant  difference  in
efficacy between doses. This result  builds on previous data  showing
superior efficacy to interferon beta-1a[2] in TRANSFORMS, the largest
head-to-head Phase III study against a standard of care treatment  in
MS.

In FREEDOMS,  FTY720  was  generally  well  tolerated  with  a  lower
incidence of  adverse events  at the  0.5 mg  dose than  1.25  mg[1].
Regulatory submissions for FTY720,  planned in the US  and EU at  the
end of 2009, will seek  approval for the lower  0.5 mg dose based  on
comprehensive   Phase   III   results   establishing   its   positive
benefit-risk profile. Future development of FTY720 in relapsing forms
of MS will focus on the 0.5 mg dose.

"We are  proud  to  have  reached  this  critical  milestone  in  the
development of FTY720, a novel oral therapy that has the potential to
transform the treatment of  this ultimately disabling disease,"  said
Trevor Mundel, MD, Global Head of Development at Novartis Pharma  AG.
"FTY720 0.5 mg  therapy offers  compelling efficacy  on all  relevant
endpoints  compared  to  both  placebo   and  a  standard  of   care,
complemented by extensive safety data."

Results from the placebo-controlled  FREEDOMS study show that  FTY720
reduced the relapse rate by 54% for  the 0.5 mg dose and 60% for  the
1.25 mg  dose compared  to placebo  (both p<0.001)[1].  In  addition,
FTY720 reduced the progression of  disability by 30% for patients  on
0.5 mg (p=0.024) and 32% for  those on 1.25 mg (p=0.017) compared  to
placebo over two years[1]. These findings were supported by  positive
effects on brain  lesions as measured  by magnetic resonance  imaging
(MRI) scans.

FREEDOMS is the second of three  Phase III studies to report  results
in the largest  development program ever  conducted in MS,  involving
more than 4,000 patients worldwide. Previously reported results  from
the one-year TRANSFORMS study showed a reduction in relapse rates  of
52% and 38% for  FTY720 0.5 mg and  1.25 mg respectively compared  to
interferon beta-1a (both  p<0.001)[2]. FREEDOMS  II, currently  under
way, is a  two-year placebo-controlled  Phase III  study, similar  in
design to FREEDOMS.

"The positive results  from the FREEDOMS  study confirm the  efficacy
and safety  of  fingolimod, and  provide  important evidence  of  its
effect  on  disability,"  said  Professor  Ludwig  Kappos,  Chair  of
Neurology and Research Group Leader in the Department of  Biomedicine
at the University Hospital in  Basel, Switzerland, and the  principal
investigator of the FREEDOMS study. "As an oral therapy, it is  clear
that fingolimod potentially represents  a significant advance in  the
treatment of MS."

FTY720 has  a  well-studied  safety  profile  with  more  than  5,300
patient-years of exposure, including patients now in their sixth year
of treatment.  Previous  data  from the  development  program  raised
questions about  potential  side  effects  including  macular  edema,
melanoma, liver injury, infections, and increased blood pressure.  In
the FREEDOMS study, at the 0.5 mg dose there were no cases of macular
edema or  melanoma[1]. Reversible  and generally  asymptomatic  liver
enzyme elevations  were observed  more  frequently with  FTY720  than
placebo, and lung infections were also slightly more common[1].  Mild
elevation in blood pressure was  observed with FTY720. No new  safety
signals were seen in FREEDOMS  compared to previous clinical  trials.
Three patients died during the FREEDOMS study, one on FTY720 1.25  mg
and two on placebo. None of the deaths was assessed as being  related
to the study drug[1].

FREEDOMS (FTY720 Research Evaluating Effects of Daily Oral therapy in
Multiple Sclerosis)  was  a  double-blind,  placebo-controlled  study
involving 1,272  patients in  22 countries  to assess  the  efficacy,
safety and tolerability of FTY720. The primary endpoint was reduction
in annual relapse rate and  the key secondary endpoint was  reduction
in disability progression,  defined as an  increase from baseline  in
Expanded Disability  Status Scale  (EDSS) scores  confirmed at  three
months[1].

FTY720 has  the potential  to  be the  first in  a  new class  of  MS
therapies called sphingosine 1-phosphate (S1-P) receptor  modulators.
Comprehensive analyses of the FREEDOMS data are ongoing, and detailed
results are planned to be presented at a leading scientific  congress
in 2010.

Disclaimer
The foregoing release contains forward-looking statements that can be
identified by terminology such as "planned," "future," "to focus on,"
"will," "potential," "potentially," or similar expressions, or by
express or implied discussions regarding potential future regulatory
submissions or approvals for FTY720 or regarding potential future
revenues from FTY720. You should not place undue reliance on these
statements. Such forward-looking statements reflect the current views
of management regarding future events, and involve known and unknown
risks, uncertainties and other factors that may cause actual results
with FTY720 to be materially different from any future results,
performance or achievements expressed or implied by such statements.
There can be no guarantee that FTY720 will be submitted or approved
for sale in any market. Nor can there be any guarantee that FTY720
will achieve any particular levels of revenue in the future. In
particular, management's expectations regarding FTY720 could be
affected by, among other things, unexpected clinical trial results,
including unexpected new clinical data and unexpected additional
analysis of existing clinical data; unexpected regulatory actions or
delays or government regulation generally; competition in general;
the company's ability to obtain or maintain patent or other
proprietary intellectual property protection; government, industry
and general public pricing pressures; the impact that the foregoing
factors could have on the values attributed to the Novartis Group's
assets and liabilities as recorded in the Group's consolidated
balance sheet, and other risks and factors referred to in Novartis
AG's current Form 20-F on file with the US Securities and Exchange
Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, believed,
estimated or expected. Novartis is providing the information in this
press release as of this date and does not undertake any obligation
to update any forward-looking statements contained in this press
release as a result of new information, future events or otherwise.

About Novartis
Novartis provides  healthcare  solutions that  address  the  evolving
needs of  patients  and  societies.  Focused  solely  on  healthcare,
Novartis offers a  diversified portfolio  to best  meet these  needs:
innovative medicines, cost-saving generic pharmaceuticals, preventive
vaccines, diagnostic tools and consumer health products. Novartis  is
the only company with  leading positions in each  of these areas.  In
2008, the Group's  continuing operations  achieved net  sales of  USD
41.5 billion and net income of USD 8.2 billion. Approximately USD 7.2
billion  was  invested  in  R&D  activities  throughout  the   Group.
Headquartered in Basel, Switzerland, Novartis Group companies  employ
approximately 99,000 full-time-equivalent  associates and operate  in
more than  140  countries around  the  world. For  more  information,
please visit www.novartis.com.

References
[1] Novartis. Data on file.
[2] Cohen J. et al. Oral Fingolimod (FTY720) Versus Interferon
Beta-1a in Relapsing-Remitting Multiple Sclerosis: Results from a
Phase III Study (TRANSFORMS). Slide deck associated with Oral
Presentation at the American Academy of Neurology Annual Meeting
2009. [S21.004].
[3] Cochrane Database of Systematic Reviews 2001, Issue 4.
mrw.interscience.wiley.com/cochrane/clsysrev/articles/CD002002/f .. (Accessed
29 September 2009).

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