4.A History and development of Novartis Novartis AG Novartis AG was incorporated on February 29, 1996, under the laws of Switzerland as a stock corporation (“Aktiengesellschaft”) with an indefinite duration. On December 20, 1996, our predecessor companies, Ciba‑Geigy AG and Sandoz AG, merged into this new entity, creating Novartis. We are domiciled in and governed by the laws of Switzerland. Our registered office is located at the following address: Novartis AG Lichtstrasse 35 CH‑4056 Basel, Switzerland Telephone: +41‑61‑324‑1111 Website: www.novartis.com Novartis AG, our Swiss holding company, owns, directly or indirectly, all of our significant operating companies. For a list of our significant operating subsidiaries, see “Item 18. Financial Statements—Note 31. Novartis principal subsidiaries and associated companies.” For a description of important corporate developments since January 1, 2023, see “Item 18. Financial Statements—Note 2. Significant acquisitions of businesses and spin-off of Sandoz business.” For information regarding the Company’s material commitments for capital expenditures, see “Item 5. Operating and Financial Review and Prospects—Material contractual obligations and commitments.” The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 4.B Business overview Overview Novartis is an innovative medicines company, engaged in the research, development, manufacturing, distribution, marketing and sale of a broad range of pharmaceutical products. Our purpose is to reimagine medicine to improve and extend people’s lives. Our strategy is to deliver high-value medicines that alleviate society’s greatest disease burdens through technology leadership in R&D and novel access approaches. To support our strategy, we have clear focus areas where we commit most of our time, energy and resources. These core therapeutic areas are cardiovascular, renal and metabolic; immunology; neuroscience; and oncology. For more information about our strategy, see “Item 5. Operating and Financial Review and Prospects—Overview—Our strategy.” In 2025, Novartis achieved net sales from continuing operations of USD 54.5 billion, and net income from continuing operations amounted to USD 14.0 billion. Headquartered in Basel, Switzerland, we employed 75 267 full‑time equivalent employees as of December 31, 2025. Our products are sold in approximately 120 countries around the world. Our operations are organized into the following five organizational units: • Biomedical Research is our innovation engine, focused on creating new ways of fighting disease and turning scientific breakthroughs into new medicines with the potential to change lives. • Development oversees the development of potential new medicines through clinical trials to confirm their safety and efficacy, and steers the way to regulatory approval for use by patients. • Operations manufactures and delivers our medicines to customers, while also overseeing the global functions of IT, procurement, and real estate services. • The two commercial units, US and International, focus on their respective geographic areas. They work with customers to provide innovative medicines and services that improve treatment options and raise the quality of care for patients. These organizational units are supported by our global functions in areas such as corporate affairs, ethics, risk and compliance, finance, legal, internal audit, people and organization and strategy and growth. For more information about our Development unit, see “—Research and development—Development program” below. For more information about our Operations unit see “—Item 4.D Property, plants and equipment” and “Item 18. Financial Statements—Note 3. Operating segment and Note 4. Revenues and geographical information.” 22 Key marketed products The following summaries describe certain Novartis key marketed products in certain indications. These products are listed according to year-end net sales. Some of them have lost patent protection or are otherwise subject to generic competition, while others are subject to patent challenges by potential generic competitors (see “—Intellectual property” for general information on intellectual property and regulatory data protection, and for more information on the status of patents and exclusivity for certain key marketed products). While we typically seek to sell our marketed products throughout the world, not all products and indications are available in every country. The indications described in these summaries may therefore vary by country. In addition, a product may be available under different brand names depending on the country and indication. • Entresto (sacubitril/valsartan) is an oral, first-in-class angiotensin receptor-neprilysin inhibitor. Entresto enhances the protective effects of a hormone system called the natriuretic peptide system, and simultaneously suppresses the harmful effects of a hormone system called the renin-angiotensin-aldosterone system. It is approved: • In the US, the EU, and other markets to treat adults who have symptomatic chronic heart failure with reduced ejection fraction (HFrEF). HFrEF is a disease in which the heart cannot pump blood efficiently • In the US and other markets to treat adult patients with chronic heart failure with preserved ejection fraction (HFpEF). HFpEF is a disease in which the heart’s main pumping chamber (left ventricle) becomes stiff and unable to fill properly with blood • In the US, the EU, and other markets to treat children and adolescents aged 1 year and older who have symptomatic chronic heart failure with left ventricular systolic dysfunction • In China, Japan, and other markets to treat adult patients with essential hypertension (abnormally high blood pressure that is not the result of a medical condition) • Cosentyx (secukinumab) is an injectable, fully human monoclonal antibody that selectively inhibits interleukin-17A (IL-17A), a cytokine involved in several immunological diseases. It is approved in the US, the EU, and other markets to treat: • Adults and children aged 6 years and older with moderate-to-severe plaque psoriasis (this indication is also approved in China). Psoriasis is a debilitating systemic inflammatory disease that is characterized by the appearance of raised, red patches on the skin • Adults with active non-radiographic axial spondyloarthritis (nr-axSpA). nr-axSpA is a long-term inflammatory disease that is characterized by chronic back pain and is not visible on X-rays • Adults with active psoriatic arthritis (PsA). PsA is a type of progressive inflammatory arthritis that results in swollen and painful joints and tendons, which can cause structural damage to the bones and joints • Adults with active ankylosing spondylitis (AS). AS is a progressive inflammatory disease that is characterized by chronic back pain, is generally visible on X-rays, and can cause structural damage to the bones and joints • Children (aged 4 years and older in the US, and 6 years and older in the EU) with active enthesitis-related arthritis (ERA) and children (aged 2 years and older in the US, and 6 years and older in the EU) with active juvenile psoriatic arthritis (JPsA). ERA and JPsA are subtypes of juvenile idiopathic arthritis. If left untreated, they can lead to high levels of pain and disability • Adults with moderate to severe hidradenitis suppurativa (HS). HS is a chronic skin disease that causes recurring boil-like lumps that may burst into open wounds and cause irreversible scarring, often in the most intimate parts of the body An intravenous formulation of Cosentyx is approved in the US for the treatment of adults with active PsA, AS, and nr-axSpA. • Kisqali (ribociclib) is a selective, oral cyclin-dependent inhibitor of kinases 4 and 6 (CDK4/6) — two enzymes involved in the control of cell cycle progression. Kisqali is approved in the US, the EU, and other markets to treat: • Pre-, peri- and postmenopausal women, and men (US and other markets), with locally advanced or metastatic hormone receptor-positive (HR+)/human epidermal growth factor receptor 2-negative (HER2-) breast cancer, in combination with an aromatase inhibitor as initial endocrine-based therapy. HR+/HER2- breast cancer is the most common subtype of breast cancer • Pre-, peri- (EU) and postmenopausal women, and men (US), with locally advanced or metastatic HR+/HER2- breast cancer, in combination with fulvestrant, as a first- or second-line therapy • Adults with HR+/HER2- stage II and III early breast cancer at high risk of recurrence, as an adjuvant treatment in combination with an aromatase inhibitor (US) • Patients with HR+/HER2- early breast cancer at high risk of recurrence, as an adjuvant treatment in combination with an aromatase inhibitor (EU and other markets) Kisqali was developed by our Biomedical Research organizational unit (formerly the Novartis Institutes for BioMedical Research) under a research collaboration with Astex Pharmaceuticals. • Kesimpta (ofatumumab) is an anti-CD20 monoclonal antibody that enables the targeted depletion of B-cells, specifically in lymph nodes. Kesimpta is the only B-cell treatment for relapsing multiple sclerosis that is self-administered once-monthly via the Sensoready autoinjector pen, following three weekly starter doses. It is approved: • In the US to treat adults with relapsing forms of multiple sclerosis, including clinically isolated syndrome, relapsing-remitting multiple sclerosis, and active secondary progressive multiple sclerosis. Multiple sclerosis is a disease in which the immune system 23 attacks the protective covering of nerves (known as myelin) • In the EU to treat adults with relapsing forms of multiple sclerosis with active disease defined by clinical or imaging features (i.e., relapse, disability, or lesions detected by MRI scans) Approved indications vary by country. Ofatumumab was originally developed by Genmab and licensed to GlaxoSmithKline (GSK). Novartis obtained the rights to ofatumumab from GSK across all indications. • Tafinlar + Mekinist (dabrafenib + trametinib) is an oral combination therapy. Tafinlar and Mekinist are kinase inhibitors of the BRAF and MEK1/2 proteins, respectively, approved in combination to treat patients who have certain types of cancer with a change in the BRAF gene (called a BRAF V600 mutation), including: • Adults in the US, the EU, and other markets with unresectable or metastatic melanoma with a BRAF V600 mutation. Melanoma is a form of skin cancer; unresectable melanoma cannot be removed with surgery and metastatic melanoma has spread to other parts of the body. Tafinlar and Mekinist are also approved as single agents for this indication • Adults in the US, the EU, and other markets with stage III melanoma with a BRAF V600 mutation as an adjuvant treatment (following surgery) • Adults in the US, the EU, and other markets with advanced non-small cell lung cancer (NSCLC) with a BRAF V600 mutation. NSCLC is the most common type of lung cancer • Adults and children aged 1 year and older in the US and other markets with unresectable or metastatic solid tumors with a BRAF V600E mutation whose cancer has progressed following prior treatment and who have no satisfactory alternative treatment options • Children aged 1 year and older in the US, the EU, and other markets with low-grade glioma with a BRAF V600E mutation who require systemic therapy. Low grade gliomas are tumors that develop from brain cells. Approved indications and pharmaceutical forms vary by country. Tafinlar is provided in capsules and dispersible tablets. Mekinist is provided in tablets and powder for oral solution. Novartis has worldwide exclusive rights to develop, manufacture, and commercialize trametinib granted by Shionogi & Co., Ltd. (as successor to Japan Tobacco Inc.). • Jakavi (ruxolitinib) is an oral inhibitor of the JAK1 and JAK2 tyrosine kinases. It is the first JAK1/JAK2 inhibitor approved in the EU and other markets to treat: • Adults with myelofibrosis (MF), including primary myelofibrosis, post-polycythemia vera myelofibrosis and post-essential thrombocythemia myelofibrosis. MF is a rare blood cancer characterized by abnormal blood cell production and scarring in the bone marrow, which can lead to an enlarged spleen • Adults with polycythemia vera (PV) who are resistant or intolerant to a medication called hydroxyurea. PV is a rare blood cancer in which the bone marrow produces too many red blood cells, resulting in serious problems like clots • Patients aged 12 years and older with acute or chronic graft-versus-host disease (GvHD) and who have had an inadequate response to corticosteroids or other systemic therapies, and for patients with GvHD aged 28 days to less than 18 years old. GvHD occurs in stem-cell transplant patients when donor cells see the recipient’s healthy cells as foreign and attack them Novartis licensed ruxolitinib from Incyte Corporation for development and commercialization in the indications of oncology, hematology and GvHD outside the US. Incyte Corporation markets ruxolitinib as Jakafi® in the US. • Pluvicto (lutetium (177Lu) vipivotide tetraxetan) is an intravenous prostate-specific membrane antigen (PSMA)-targeted radioligand therapy that combines a targeting compound (a ligand) with a therapeutic radionuclide (a radioactive particle, in this case lutetium-177). Pluvicto selectively delivers beta particle radiation to PSMA-positive cells, including prostate cancer cells and the surrounding cells, with a high tumor-to-normal-tissue uptake that minimizes off-target effects. It is approved: • In the US, the EU, and other markets to treat adults with PSMA-positive metastatic castration-resistant prostate cancer (mCRPC), a type of advanced prostate cancer that has spread to other parts of the body (metastatic), who have already been treated with androgen receptor pathway inhibition and taxane-based chemotherapy • In the US, to treat adult patients with PSMA-positive mCRPC who have already been treated with androgen receptor pathway inhibition therapy and are considered appropriate to delay taxane-based chemotherapy. • Ilaris (canakinumab) is an injectable, selective, high-affinity, fully human monoclonal antibody that inhibits interleukin-1 beta (IL-1 beta), a key cytokine in the inflammatory pathway. It is approved in the US, the EU, and other markets to treat patients with certain debilitating rare autoinflammatory disorders, including: • Adults and children with periodic fever syndromes. Periodic fever syndromes are a set of rare disorders characterized by recurrent episodes of illness, with fever as the main symptom • Patients with Still’s disease, including systemic juvenile idiopathic arthritis and adult-onset Still’s disease. Still’s disease is a disorder that causes fevers, rash and joint pain • Adults with acute gouty arthritis (a non-rare indication). Gouty arthritis is a type of arthritis characterized by pain, redness, tenderness and swelling in one or more joints Approved indications vary by country. • Xolair (omalizumab) is an injectable prescription medicine designed to target and block immunoglobulin E (IgE). It is approved: 24 • In the US, the EU, and other markets to treat adults and children aged 6 years and older with moderate-to-severe, or severe, persistent allergic asthma • In the US, the EU, and other markets to treat adults and children aged 12 years and older with chronic spontaneous urticaria/chronic idiopathic urticaria (hives) • In the US, the EU, and other markets to treat adults with nasal polyps or severe chronic rhinosinusitis with nasal polyps (CRSwNP). CRSwNP is a chronic inflammation of the nose and the sinuses with the presence of benign lesions (nasal polyps) on the lining of the nasal sinuses or nasal cavity • In the US to treat adults and children one year and older with IgE-mediated food allergies for the reduction of allergic reactions, including reducing the risk of anaphylaxis, that may occur with accidental exposure to one or more foods Approved indications and pharmaceutical forms vary by country. Xolair is provided as lyophilized powder for reconstitution, and as a liquid formulation in a pre-filled syringe and pre-filled pen. Novartis co-promotes Xolair with Genentech in the US and shares a portion of operating income, but Novartis does not record any US sales. Novartis records all sales of Xolair outside the US. • Promacta/Revolade (eltrombopag) is a once daily oral thrombopoietin receptor agonist that works by stimulating bone marrow cells to produce platelets. It is approved in the US, the EU, and other markets to treat: • Immune thrombocytopenia (ITP) in patients who have had an insufficient response to or have failed previous therapies. ITP is a bleeding disorder caused by an unusually low number of platelets • Thrombocytopenia in patients with chronic hepatitis C to allow them to initiate and maintain interferon-based therapy • Patients with severe aplastic anemia (SAA). SAA is a condition in which the body does not produce enough blood cells Promacta/Revolade is marketed under a research, development and license agreement between Novartis and RPI Finance Trust (dba Royalty Pharma), as assignee of Ligand Pharmaceuticals. • Scemblix (asciminib) is an oral kinase inhibitor that works by binding to a part of the BCR-ABL protein called the ABL myristoyl pocket. It is approved: • In the US, EU, and other markets to treat both newly diagnosed and previously treated adults with Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML) in the chronic phase (CP) • In the US and other markets to treat adults with Ph+ CML in the CP with the T315I mutation. The T315I mutation causes resistance to most available TKI therapies, and, as a result, patients with this mutation would otherwise have limited treatment options • Zolgensma (onasemnogene abeparvovec)/Itvisma (onasemnogene abeparvovec-brve) is a one-time gene therapy designed to address the genetic root cause of spinal muscular atrophy (SMA) by replacing the function of the missing or nonworking SMN1 gene. A new working copy of the human SMN1 gene is delivered into a patient’s cells. SMA is a rare, genetic neuromuscular disease resulting in the progressive and irreversible loss of motor neurons, affecting muscle functions, including breathing, swallowing and basic movement. It is approved: • In the US, the EU, and other markets as an intravenous infusion (Zolgensma) to treat babies and young children who have SMA with biallelic mutations in the SMN1 gene • In the US and other markets as an intrathecal injection (Itvisma) to treat adults and pediatric patients 2 years of age and older living with SMA with a confirmed mutation in the SMN1 gene Approved indications vary by country. • Sandostatin SC (octreotide acetate for injection) and Sandostatin LAR (octreotide acetate for injectable suspension) are somatostatin analogs approved in the US, the EU, and other markets to treat: • Adults with acromegaly that is inadequately controlled by surgery or radiotherapy. Acromegaly is a chronic disease caused by the oversecretion of growth hormone • Patients with certain symptoms associated with carcinoid tumors and other types of functional gastrointestinal and pancreatic neuroendocrine tumors Sandostatin LAR is also approved in the EU and other markets to treat patients with advanced neuroendocrine tumors of the midgut or of unknown primary tumor origin. • Leqvio (inclisiran) is the first and only approved small-interfering RNA therapy to reduce LDL cholesterol, a risk factor for atherosclerotic cardiovascular disease (ASCVD), which is caused by plaque buildup in the arteries. Leqvio is administered by a healthcare professional twice a year as an injection, except in the first year of treatment where, following an initial dose, another dose is required after three months. It is approved: • In the EU and other markets to treat adults with primary hypercholesterolemia (heterozygous familial and non-familial) or mixed dyslipidemia as an adjunct to diet. Leqvio is used in combination with a statin or with a statin plus other lipid-lowering therapies in patients unable to reach LDL cholesterol goals with the maximum tolerated dose of a statin, or alone or in combination with other lipid-lowering therapies in patients who are statin-intolerant or for whom a statin is contraindicated. Primary hypercholesterolemia and mixed dyslipidemia are disorders characterized by high levels of fats (lipids) in the blood • In the US to treat adults with hypercholesterolemia, including heterozygous familial hypercholesterolemia (HeFH), as an adjunct to diet and statin therapy to reduce LDL cholesterol. Hypercholesterolemia, also known as high cholesterol, is characterized by high levels of fats in the blood 25 Novartis obtained global rights to develop, manufacture and commercialize Leqvio under a license and collaboration agreement with Alnylam Pharmaceuticals, Inc. • Tasigna (nilotinib) is a twice-daily oral tyrosine kinase inhibitor that acts by blocking the BCR-ABL protein. It is approved in the US, the EU, and other markets to treat: • Patients with Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML) in the chronic and/or accelerated phase who are resistant or intolerant to existing treatment. Ph+ CML is a cancer that starts in the blood-forming cells of bone marrow • Newly diagnosed adults and children with Ph+ CML in the chronic phase • Lutathera (lutetium Lu 177 dotatate/lutetium (177Lu) oxodotreotide) is an intravenous targeted radioligand therapy approved in the US, the EU, and other markets to treat: • Patients with somatostatin receptor-positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs). GEP-NETs are rare tumors found in the digestive tract Approved indications vary by country. • Lucentis (ranibizumab) is a humanized, high-affinity antibody fragment that binds to vascular endothelial growth factor A (VEGF-A), a protein that can cause the growth of blood vessels in the eye, potentially leading to vision loss. Lucentis is an anti-VEGF therapy that is injected into the eye. It is approved in the EU and other markets to treat patients with certain eye conditions, including: • Adults with neovascular (wet) age-related macular degeneration (AMD). Wet AMD develops when abnormal blood vessels grow under the macula and leak blood and other fluids in the back of the eye, which damages the macula • Adults with proliferative diabetic retinopathy, moderately severe to severe non-proliferative diabetic retinopathy, and/or visual impairment due to diabetic macular edema. These conditions are complications of diabetes • Adults with visual impairment due to macular edema secondary to retinal vein occlusion (branch RVO or central RVO). Retinal vein occlusion is a blockage of the branch or central retinal veins, which carry blood away from the retina Approved indications vary by country. Lucentis is licensed from Genentech, and Novartis holds the rights to commercialize the product outside the US. Genentech holds the rights to commercialize Lucentis in the US. • Fabhalta (iptacopan) is an oral Factor B inhibitor of the alternative complement pathway, a part of the innate immune system involved in triggering inflammation and fighting infections. It is approved: • In the US, the EU, and other markets to treat adults with paroxysmal nocturnal hemoglobinuria (PNH). PNH is a rare chronic blood disorder in which red blood cells are susceptible to premature destruction by the complement system • In the US, for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk of rapid disease progression (generally UPCR ≥1.5 g/g). IgAN is a progressive, rare disease in which the immune system attacks the kidneys • In the US, the EU, and other markets for the treatment of adults with C3 glomerulopathy (C3G). C3G is an ultra-rare kidney disease caused by overactivation of the alternative complement pathway — part of the immune system — which is thought to contribute to the pathogenesis of C3G Approved indications vary by country. • Rhapsido (remibrutinib) is an oral, small molecule kinase inhibitor that inhibits Bruton’s tyrosine kinase. Rhapsido is a pill taken twice daily. It is approved in the US for the treatment of: • Adult patients with chronic spontaneous urticaria who remain symptomatic despite H1 antihistamine treatment • Vanrafia (atrasentan) is a selective endothelin A receptor antagonist. Vanrafia is a once-daily, non-steroidal, oral treatment that can be added onto supportive care, including a renin-angiotensin system (RAS) inhibitor with or without a sodium-glucose co-transporter-2 (SGLT2) inhibitor. It is approved: • In the US, for the reduction of proteinuria in adults with primary IgAN at risk of rapid disease progression (generally UPCR ≥1.5 g/g) 26 Compounds in development The following table provides an overview of key projects currently in the Confirmatory Development stage, and may also describe certain projects in the Early Development stage. Projects typically enter Confirmatory Development and become the responsibility of our Development organizational unit during Phase II testing. (For more information about our drug development program, see “—Research and development—Development program.”) Projects are listed in alphabetical order by compound code, or by product name where applicable. Included are projects seeking to develop potential uses of new molecular entities as well as potential additional indications or new formulations for already marketed products. The table below, entitled “Projects removed from the development table since 2024,” highlights changes to the table entitled “Selected development projects” from the previous year. The year that each project entered the current phase of development refers to the year of the first patient’s first visit in the first clinical trial of that phase. For projects in Phase II, the year generally refers to the first patient’s first visit in the first trial in Confirmatory Development. In some cases, the first patient’s first visit in a Phase II trial can occur before the Confirmatory Development stage. A reference to a project being in registration means that an application has been submitted to a health authority for marketing approval. Compounds and new indications in development are subject to required regulatory approvals, and, in certain instances, contractual limitations. These compounds and indications are in various stages of development throughout the world. It may not be possible to obtain regulatory approval for any or all of the new compounds and new indications referred to in the Form 20-F in any country or in every country. See “—Regulation” for more information on the approval process. Selected development projects Compound/ product Common name Mechanism of action Potential indication Category Formulation/ route of administration Year project entered current development phase Planned filing dates/current phase AAA817 actinium (225Ac)- vipivotidum tetraxetan Radioligand therapy targeting PSMA Post-Lu metastatic castration-resistant prostate cancer 1 Oncology Intravenous infusion 2025 2028/III Metastatic castration-resistant prostate cancer, 1st line 1 Oncology Intravenous infusion 2025 ≥2029/III Cosentyx secukinumab IL‑17A inhibitor Polymyalgia rheumatica Immunology Subcutaneous injection 2023 2026/III DAK539 pelabresib BET inhibitor Myelofibrosis Oncology Oral 2024 2026/III DII235 TBD siRNA targeting Lp(a) mRNA Risk reduction in cardiovascular disease w elevated Lp(a) 1 Cardiovascular, Renal and Metabolic Subcutaneous injection 2025 ≥2029/II Fabhalta (LNP023) iptacopan CFB inhibitor IC-MPGN Cardiovascular, Renal and Metabolic Oral 2023 ≥2029/III Atypical hemolytic uremic syndrome Oncology Oral 2021 ≥2029/III Myasthenia gravis Neuroscience Oral 2024 2027/III FUB523 zigakibart Anti-APRIL monoclonal antibody IgA nephropathy Cardiovascular, Renal and Metabolic Subcutaneous injection 2023 2027/III GHZ339 TBD TBD Atopic dermatitis 1 Immunology Subcutaneous injection 2025 ≥2029/II JSB462 luxdegalu- tamide Androgen receptor protein degradation Prostate cancer 1 Oncology Oral 2025 ≥2029/II KAE609 cipargamin PfATP4 inhibitor Malaria, uncomplicated Global Health Oral 2017 ≥2029/II Malaria, severe Global Health Intravenous infusion 2022 ≥2029/II Kesimpta ofatumumab Anti-CD20 Multiple sclerosis 1 Neuroscience Subcutaneous injection 2025 2027/III KLU156 ganaplacide + lumefantrine Non-artemisinin plasmodium falciparum inhibitor Malaria, uncomplicated Global Health Oral 2024 2026/III Leqvio inclisiran siRNA (regulation of LDL-C) Secondary prevention of cardiovascular events in patients with elevated levels of LDL-C Cardiovascular, Renal and Metabolic Subcutaneous injection 2018 2027/III Primary prevention cardiovascular risk reduction Cardiovascular, Renal and Metabolic Subcutaneous injection 2023 ≥2029/III 1 Project added to selected development projects table in 2025 – entered Confirmatory Development 27 Compound/ product Common name Mechanism of action Potential indication Category Formulation/ route of administration Year project entered current development phase Planned filing dates/current phase LOU064 remibrutinib BTK inhibitor Chronic inducible urticaria Immunology Oral 2023 Registration Food allergy 1 Immunology Oral 2022 ≥2029/II Multiple sclerosis Neuroscience Oral 2021 2027/III Myasthenia gravis Neuroscience Oral 2024 2028/III Hidradenitis suppurativa, Immunology 1 Immunology Oral 2025 2028/III Multiple sclerosis, secondary progressive 1 Neuroscience Oral 2025 ≥2029/III Lutathera lutetium Lu 177 dotatate/ lutetium (177Lu) oxodotreotide Radioligand therapy targeting SSTR Gastroenteropancreatic neuroendocrine tumors 1 Oncology Intravenous infusion 2025 2028/III LTP001 TBD SMURF1 inhibitor Pulmonary arterial hypertension 1 Cardiovascular, Renal and Metabolic Oral 2025 ≥2029/II LXE408 TBD Proteasome inhibitor Visceral leishmaniasis Global Health Oral 2022 ≥2029/II MAA868 2 abelacimab F11 inhibitor Stroke prevention in atrial fibrillation Cardiovascular, Renal and Metabolic Subcutaneous injection 2025 2028/III PAC001 3 pacibekitug Anti-IL-6 mAb Atherosclerotic cardiovascular disease Cardiovascular, Renal and Metabolic Subcutaneous injection 2025 ≥2029/II Pluvicto lutetium Lu 177 vipivotide tetraxetan/ lutetium (177Lu) vipivotide tetraxetan Radioligand therapy targeting PSMA Metastatic hormone-sensitive prostate cancer Oncology Intravenous infusion 2025 Registration Oligometastatic prostate cancer Oncology Intravenous infusion 2024 ≥2029/III QCZ484 TBD TBD Hypertension 1 Cardiovascular, Renal and Metabolic Subcutaneous injection 2025 ≥2029/II TQJ230 pelacarsen ASO targeting lipoprotein(a) Secondary prevention of cardiovascular events in patients with elevated levels of lipoprotein(a) Cardiovascular, Renal and Metabolic Subcutaneous injection 2019 2026/III VAY736 ianalumab BAFF-R inhibitor Lupus nephritis Immunology Subcutaneous injection 2022 2028/III Sjögren’s syndrome Immunology Subcutaneous injection 2022 2026/III Systemic lupus erythematosus Immunology Subcutaneous injection 2023 2028/III Systemic sclerosis Immunology Subcutaneous injection 2024 2028/II Immune thrombocytopenia, 1st line Oncology Intravenous infusion 2023 2027/III Immune thrombocytopenia, 2nd line Oncology Intravenous infusion 2023 2027/III Warm autoimmune hemolytic anemia (wAIHA) Oncology Intravenous infusion 2022 2027/III VHB937 TBD TREM2 stabilizer and activator Alzheimer's disease 1 Neuroscience Intravenous infusion 2025 ≥2029/II Amyotrophic lateral sclerosis 1 Neuroscience Intravenous infusion 2025 ≥2029/II Vijoice alpelisib PI3K-alpha inhibitor Lymphatic malformations Oncology Oral 2023 ≥2029/III YTB323 rapcabtagene autoleucel CD19 CAR-T Severe refractory lupus nephritis/ systemic lupus erythematosus Immunology Intravenous infusion 2023 2028/II High-risk large B-cell lymphoma, 1st line Oncology Intravenous infusion 2023 ≥2029/II Systemic sclerosis Immunology Intravenous infusion 2024 ≥2029/II Myositis Immunology Intravenous infusion 2024 ≥2029/II ANCA associated vasculitis 1 Immunology Intravenous infusion 2025 ≥2029/II 1 Project added to selected development projects table in 2025 – entered Confirmatory Development 2 Entered Confirmatory Development following the acquisition of Anthos Therapeutics in 2025 3 Entered Confirmatory Development following the acquisition of Tourmaline Bio in 2025 28 Projects removed from the development table since 2024 Compound/product Potential indication Change Reason Coartem Malaria (<5 kg patients) Commercialized Beovu Diabetic retinopathy Commercialized Fabhalta C3 glomerulopathy Commercialized Itvisma Spinal muscular atrophy (IT formulation) Commercialized Pluvicto Metastatic castration-resistant prostate cancer, pre-taxane Commercialized Rhapsido Chronic spontaneous urticaria Commercialized Vanrafia IgA nephropathy Commercialized Cosentyx Giant cell arteritis Removed Development discontinued Principal markets Novartis sells products in approximately 120 countries worldwide. Net sales are primarily concentrated in the US and Europe. The following table sets forth aggregate net sales by region for each of the last three years: 2025 net sales 2024 net sales 2023 net sales USD millions % USD millions % USD millions % United States 23 331 43 21 146 42 17 959 40 Europe 16 729 31 15 557 31 14 997 33 Asia, Africa, Australasia 10 797 20 10 021 20 9 308 20 Canada and Latin America 3 675 6 3 593 7 3 176 7 Total 54 532 100 50 317 100 45 440 100 Of which in established markets 1 40 555 74 37 371 74 33 725 74 Of which in emerging growth markets 1 13 977 26 12 946 26 11 715 26 1 Emerging growth markets comprise all markets other than the established markets of the US, Canada, Western Europe, Japan, Australia and New Zealand. Novartis definition of Western Europe includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Many of our products are used for chronic conditions that require patients to continue dosing of the product over long periods of time, ranging from months to years. However, certain of our marketed products and development projects, such as cell and gene therapies, are administered only once. Net sales of the vast majority of our products are not subject to material changes in seasonal demand. Production Our primary goal is to ensure the uninterrupted and timely supply of medicines that meet all product specifications and quality standards, and that are manufactured in the most cost-effective and sustainable manner. The manufacturing of our products is highly regulated by governmental health authorities around the world, including the FDA and the EMA. In addition to regulatory requirements, many of our products involve technically complex manufacturing processes or require highly specialized raw materials. We manufacture our products across the following technologies at facilities worldwide: chemistry, biotherapeutics, cell and gene therapy, xRNA therapy and radioligand therapy (see also “—Item 4.D Property, plants and equipment”). In addition, we generate contract manufacturing sales from chemistry, biotherapeutics, xRNA, and cell and gene therapy, including fill and finish activities, which we include under “established brands” in our consolidated financial statements (see “Item 18. Financial Statements—Note 4. Revenues and geographic information”). In our manufacturing network, we maintain state-of-the-art processes, with quality as a priority, and require our suppliers to adhere to the same high standards we expect from our own people and processes. These processes include chemical and biological syntheses; radioisotope handling; sterile processing in the area of formulation and delivery; CAR-T cell processing and gene modification; and packaging. We are continually working to improve our existing manufacturing processes, develop new and innovative technologies, and review and adapt our manufacturing network to maintain quality in our manufacturing processes and supply of products to customers and patients. We produce raw materials for manufacturing in-house or purchase them from third-party suppliers. Where possible, we maintain multiple supply sources so that the business is not dependent on a single or limited number of suppliers. However, our ability to do so may at times be limited by regulatory or other requirements. We monitor market developments that could have an adverse effect on the supply of essential materials. Our suppliers of raw materials are required to comply with applicable regulations and Novartis quality standards. Because the manufacturing of our products is complex and highly regulated by governmental health authorities and other regulators, uninterrupted supply cannot be guaranteed. If we or our third-party suppliers fail to comply with applicable regulations, there could be a product recall or other disruption to our production 29 activities. We have experienced supply interruptions for our products in the past, and there can be no assurance that supply will not be interrupted again in the future. For more information on the risks related to the manufacturing of our products, see “Item 3. Key Information—Item 3.D Risk factors—Supply chain and product quality—Inability to maintain continuity of product supply and to ensure proper controls in product development and product manufacturing.” We have implemented a global manufacturing strategy to maximize business continuity in case of such events. Marketing and sales Although specific distribution patterns vary by country, Novartis generally sells its prescription drugs primarily to drug wholesalers, retailers, private health systems, government agencies, managed care providers, pharmacy benefit managers, and government-supported healthcare systems. We reach healthcare professionals and patients in many markets and across our core therapeutic areas through integrated channels, including field force operations, patient support programs, and Novartis-owned digital platforms. We have 17 491 full-time equivalent field force employees, as of December 31, 2025, including supervisors and administrative personnel. These trained representatives present the therapeutic benefits and risks of our products to physicians, pharmacists, hospitals, insurance groups, managed care organizations, and other healthcare professionals. In the US, Novartis advertises certain products via digital and traditional media channels, including the internet, television, newspapers, and magazines. Novartis also pursues co-promotion or co-marketing opportunities as well as licensing and distribution agreements with other companies in various markets. The marketplace for healthcare is constantly evolving. Customer groups beyond prescribers have an increasing influence on treatment decisions and guidelines, while patients continue to become more informed stakeholders in their healthcare decisions and look for solutions to meet their changing needs. Novartis is responding by adapting our business practices to engage appropriately with patients, customer groups, and other stakeholders, including by delivering innovative solutions to drive education, access and improved patient care. The growing number of so-called “specialty” drugs in our portfolio, such as Cosentyx, Kesimpta, Leqvio, and Pluvicto, has resulted in increased engagement with specialty pharmacies. Because many of these drugs require special handling and administration, we are rolling out patient support programs across our priority markets, which serve as a central resource for onboarding, education and support to help patients navigate their healthcare. In the US, the CMS is the largest single payer for healthcare services as a result of continuing changes in healthcare economics and an aging population. In addition, both commercial and government-sponsored managed care organizations continue to be among the largest groups of payers for healthcare services in the US. In other countries, national health services are often the only significant payer for healthcare services. In an effort to control prescription drug costs, almost all managed care organizations and national health services use formularies that list specific drugs that may be reimbursed and/or the level of reimbursement for each drug. Managed care organizations and national health services also use cost-benefit analyses to determine whether or not newly approved drugs will be added to a formulary and/or the level of reimbursement for that drug, and to determine whether or not to continue to reimburse existing drugs. We have dedicated teams that actively seek to optimize patient access, including formulary positions, for our products. The trend toward consolidation among distributors and retailers of our products continues in the US and internationally, both within and across countries. This has increased our customers’ purchasing leverage and resulted in increased pricing pressure on our products. Moreover, we are exposed to increased concentration of credit risk as a result of the consolidation among our customers. Drug pricing is an increasingly prominent issue in many countries as healthcare spending continues to rise. We aim to enable patient access through innovative pricing and access initiatives in the US, Europe, and other markets. These include contract structures such as pay-over-time and outcome-based agreements. Additionally, we recently launched a direct-to-patient platform in the US, offering cash-paying patients prescribed Cosentyx the option of purchasing it at a discount to the list price. Further, as part of the voluntary agreement we reached with the US administration in December 2025, we intend to build direct-to-patient platforms for certain of our other medicines. For further information see “—Price Controls”. Competition The global pharmaceutical market is highly competitive. We compete against other major international corporations that have substantial financial and other resources, as well as against smaller companies that operate regionally or nationally. Competition within the industry is intense and extends across a wide range of activities, including pricing, product characteristics, customer service, sales and marketing, and research and development. Like other companies selling patented pharmaceuticals, Novartis faces challenges from companies selling competing patented products as well as from companies selling generics and biosimilars. Generic or biosimilar forms of our products may follow the expiration of intellectual property protection or regulatory exclusivities, and generic companies may also gain entry to the market through successfully challenging our intellectual property rights and exclusivities. We use appropriate, legally permissible measures to defend those rights and exclusivities (see also “—Intellectual property” below). There is ongoing consolidation in the pharmaceutical industry. At the same time, new entrants are looking to use their expertise to establish or expand their presence in healthcare. Technology companies, for instance, are seeking to benefit from the increasing importance 30 of data and data management in our industry, including the use of artificial intelligence. Research and development The discovery and development of a new drug usually requires approximately 10 to 15 years from the initial research to bringing a drug to market. This includes approximately six to eight years from Phase I clinical trials to market entry. At each of these steps, there is a substantial risk that a therapeutic candidate will not meet the requirements to progress further. In such an event, we may be required to abandon the development of a potential therapy in which we have made a substantial investment. We manage our research and development expenditures across our entire portfolio in accordance with our strategic priorities. We make decisions about whether or not to proceed with research and development projects on a project-by-project basis. These decisions are based on the project’s potential to meet a significant unmet medical need or to improve patient outcomes, the strength of the science underlying the project, and the potential of the project (subject to the risks inherent in pharmaceutical development) to generate significant positive financial results for the Company. Once a management decision has been made to proceed with the development of a therapeutic candidate, the level of research and development investment required will be driven by many factors. These include the medical indications for which it is being developed, the number, sequence and timing of indications being pursued, whether the therapeutic candidate is of a chemical or biological nature, the stage of development, and the level of evidence necessary to demonstrate clinical efficacy and safety. Research program Our research and early development program is conducted by our Biomedical Research organizational unit, which is the innovation engine of Novartis. This unit is responsible for the discovery and first clinical evaluation of new medicines that bring value for patients and the Company. This requires hiring and retaining highly talented employees, focusing on fundamental disease mechanisms that are relevant across different disease areas, continuously improving technologies for drug discovery and potential therapies, working with patients to understand their diseases and the potential benefits of therapies, forming close alliances with clinical and commercial colleagues, and establishing strategic external alliances. We have 5 720 full-time-equivalent scientists, physicians and business professionals based primarily at Biomedical Research sites in Basel, Switzerland; Cambridge, Massachusetts; East Hanover, New Jersey; San Diego, California; and Emeryville, California. They contribute to research in our core therapeutic areas of cardiovascular, renal and metabolic diseases; neuroscience; oncology; and immunology, among others. Research at the Friedrich Miescher Institute focuses on basic genetic and genomic research, and our Global Health Disease Area (formerly the Novartis Institute for Tropical Diseases) focuses on discovering new medicines to fight tropical diseases, including malaria and cryptosporidiosis. All drug candidates go through clinical trials, adhering to the guidance set forth by health authorities, to enable an early assessment of the safety and efficacy of the drug while collecting basic information on how the drug moves through the body and is tolerated. When assessments are favorable, our Development organizational unit conducts confirmatory trials on the drug candidates to generate data that can be submitted to regulatory authorities to secure approval for patient use. Development program Our Development organizational unit oversees and executes drug development activities in our core therapeutic areas, working collaboratively with Biomedical Research, our commercial units, and other parts of the Company on our overall pipeline strategy. It includes centralized functions such as Regulatory Affairs, Medical Affairs, and Global Clinical Operations, and has 13 530 full-time equivalent employees worldwide. The traditional model of clinical development consists of three phases: Phase I: The first clinical trials of a new compound — generally performed in a small number of healthy human volunteers or patients (e.g., in oncology) — to assess the drug’s safety profile, including the safe dosage range. These trials also determine how a drug is absorbed, distributed, metabolized and excreted, and the duration of its action. Phase II: Studies performed with patients who have the target disease, with the aim of continuing the Phase I safety assessment in a larger group, assessing the efficacy of the drug in the patient population, and determining the appropriate doses for further evaluation. Phase III: Large-scale studies with up to several thousand patients, which aim to establish the safety and efficacy of the drug in specific indications for regulatory approval. Phase III trials may also be used to compare a new drug against a current standard of care to evaluate the overall benefit-risk relationship of the new medicine. In each of these phases, physicians closely monitor consenting volunteers or patients to assess the safety and efficacy of a potential new drug or indication. Although we use this traditional model, we take a flexible and efficient approach based on close collaboration across R&D, enabling development teams to initiate later-stage planning in parallel with early evaluations, and allowing research teams to better support later-stage activities. Our development process consists of two stages: Early Development to build confidence in the overall properties of the compound, followed by Confirmatory Development to confirm the concept in large numbers of patients. Early development consists of both Phase I studies in healthy volunteers as well as Phase Ib and Phase II studies in patients. This work includes a careful review of safety and tolerability, understanding of whether the drug is modulating the target of interest, and understanding of dose response and early evidence of disease efficacy. Biomedical Research conducts these 31 trials, and if this evaluation is positive, the drug moves to the Confirmatory Development stage and becomes the responsibility of our Development organizational unit. Confirmatory Development has elements of traditional Phase II/III testing and includes trials aimed at confirming the safety and efficacy of the drug in the given indication, leading up to submission of a dossier to health authorities for approval. This stage can also include trials that compare the drug to the current standard of care for the disease in order to evaluate the drug’s overall benefit-risk profile. Further, with new treatment approaches such as gene therapy for rare diseases, elements of Early and Confirmatory Development may be combined and suffice for registration under certain conditions, such as high unmet medical need and clinical data showing highly favorable benefit-risk profiles. In these cases, additional post-approval studies may be required by the regulatory authorities to continue to gather important data that further supports approval. The vast amount of data that must be collected and evaluated makes clinical testing the most time-consuming and expensive part of new drug development. The next stage in the drug development process is to seek registration for the new drug. For more information, see “—Regulation.” The Innovation Management Board (IMB), chaired by our Chief Executive Officer, drives our R&D portfolio strategy. The IMB endorses new early- and late-stage development projects, strategic plans, and portfolio-related priorities. It oversees our drug development budget, approves major project phase transitions, and makes key decisions, such as when to submit regulatory applications to health authorities or when to discontinue projects. IMB members include representatives from the Executive Committee of Novartis (ECN) and senior management with expertise in different fields. To support our R&D strategy, we are investing in AI and other technologies that have the potential to enhance and accelerate the delivery of innovative medicines to patients. We are working with partners on scalable projects in early-stage research and in clinical development to help improve our decision-making and generate actionable insights across our core therapeutic areas — from designing new compounds to predicting drug safety and conducting clinical trials. In addition, we are continually adapting our organizational setup to drive a leading and sustainable R&D performance, by building future capabilities across our Research and Development organizations and accessing global talent pools. Alliances and acquisitions Novartis enters into business development agreements with other pharmaceutical and biotechnology companies as well as with academic and other institutions to develop new products and access new markets. We license products that complement our current product line and are appropriate to our business strategy. We focus on strategic alliances and acquisition activities for key disease areas and indications that we expect to be growth drivers in the future. We review products and compounds that we are considering licensing, using the same criteria that we use for our own internally discovered drugs. In April 2025, Novartis acquired Anthos Therapeutics, a US-based, clinical stage biopharmaceutical company with abelacimab, a late-stage medicine in development for the prevention of stroke and systemic embolism in patients with atrial fibrillation. The acquisition added a Phase III asset and is aligned with the Novartis growth strategy and our expertise in the cardiovascular therapeutic area. In June 2025, Novartis acquired Regulus Therapeutics, a clinical-stage biopharmaceutical company focused on developing microRNA therapeutics. Regulus’s lead asset, farabursen, is a potential first-in-class oligonucleotide targeting miR-17 for the treatment of autosomal dominant polycystic kidney disease (ADPKD) that recently completed Phase Ib. The acquisition is aligned with the therapeutic area focus of Novartis and leverages its strength and expertise in renal disease. In October 2025, Novartis acquired Tourmaline Bio, a clinical-stage biopharmaceutical company developing pacibekitug, a Phase III-ready anti-IL-6 monoclonal antibody for atherosclerotic cardiovascular disease (ASCVD). Also in October 2025, Novartis entered into an agreement to acquire Avidity Biosciences. The completion of the transaction is subject to the satisfaction or waiver of certain closing conditions specified in the agreement. For additional information, see “Item 18. Financial Statements—Note 2. Significant acquisitions of businesses and spin-off of Sandoz business.” and “Item 10. Additional Information—Item 10.C Material Contracts.” Regulation The international pharmaceutical industry is highly regulated. Regulatory authorities around the world administer numerous laws and regulations regarding the testing, approval, manufacturing, importing, labeling and marketing of drugs, and review the safety and efficacy of pharmaceutical products. Extensive controls exist on the non-clinical and clinical development of pharmaceutical products. These regulatory requirements, and the implementation of them by local health authorities around the globe, are a major factor in determining whether a substance can be developed into a marketable product, and the amount of time and expense associated with that development. Health authorities, including those in the US and the EU, have high standards of technical evaluation. The introduction of new pharmaceutical products generally entails a lengthy approval process. Products must be authorized or registered prior to marketing, and such authorization or registration must subsequently be maintained. In recent years, the registration process has required increased testing and documentation for the approval of new drugs, with a corresponding increase in the expense of product introduction. To register a pharmaceutical product, a registration dossier containing evidence establishing the safety, efficacy and quality of the product must be submitted to regulatory authorities. Generally, a therapeutic product must be registered in each country in which it will be sold. In every country, the submission of an application to a regulatory authority does not guarantee that approval to 32 market the product will be granted. Although the criteria for the registration of therapeutic drugs are similar in most countries, the formal structure of the necessary registration documents and the specific requirements, including risk tolerance, of the local health authorities can vary significantly from country to country. Even if a drug is registered and marketed in one country, the registration authority in another country may request additional information from the pharmaceutical company prior to registration or even reject the product. A drug may be approved for different indications in different countries. The registration process generally takes between six months and several years, depending on the country, the quality of the data submitted, the efficiency of the registration authority’s procedures, and the nature of the product. Many countries provide for accelerated processing of registration applications for innovative products of particular therapeutic interest. In recent years, the US and the EU have made efforts to harmonize registration requirements to achieve shorter development and registration times for medical products. However, the requirement in many countries to negotiate selling prices or reimbursement levels with government regulators and other payers can substantially extend the time until a product may finally be available to patients. The following provides a summary of the regulatory processes in the principal markets served by our affiliates: United States In the US, applications for drug registration are submitted to and reviewed by the FDA. The FDA regulates the testing, manufacturing, labeling and approval for marketing of pharmaceutical products intended for commercialization in the US. The FDA continues to monitor the safety of pharmaceutical products after they have been approved for sale in the US market. The pharmaceutical development and registration process is typically intensive, lengthy and rigorous. When a pharmaceutical company has gathered data that it believes sufficiently demonstrates a drug’s safety, efficacy and quality, the company may file a New Drug Application (NDA) or Biologics License Application (BLA), as applicable, for the compound. The FDA has four designations — (i) Fast Track; (ii) Breakthrough Therapy Designation; (iii) Accelerated Approval; and (iv) Priority Review — to facilitate and expedite development and/or review of new drugs to address unmet medical needs in the treatment of serious or life-threatening conditions. More than one of these designations can be granted for a given product (i.e., a product designated as a Breakthrough Therapy may also be eligible for Priority Review). The NDA or BLA must contain all the scientific information that has been gathered about the compound. This typically includes information regarding the clinical experiences of patients tested in the drug’s clinical trials. A Supplemental New Drug Application (sNDA) or Supplemental Biologics License Application (sBLA) must be filed for new indications and dosage forms for a previously approved drug. Applications eligible for Priority Review are reviewed four months faster than those reviewed under Standard Review. Once an application is submitted, the FDA assigns reviewers from its staff, including experts in biopharmaceutics, chemistry, clinical microbiology, pharmacology/toxicology, and statistics. After a complete review, these content experts provide written evaluations of the NDA or BLA. These recommendations are consolidated and are used by senior FDA staff in its final evaluation of the NDA or BLA. Based on that final evaluation, the FDA then either approves the NDA or BLA, or provides a “complete response” letter if the NDA or BLA application is not approved. If not approved, the letter will state the specific deficiencies in the NDA or BLA that need to be addressed. The company making the application must then submit an adequate response to the deficiencies to restart the review procedure. Once the FDA has approved an NDA, BLA, sNDA or sBLA, the company can make the new drug available for physicians and other healthcare providers to prescribe. The drug owner must submit periodic reports to the FDA, including any cases of adverse reactions. For some medications, the FDA requires additional post-approval studies (Phase IV) to evaluate long-term effects or to gather information on the use of the product under specified conditions. Throughout the life cycle of a product, the FDA requires compliance with standards relating to good laboratory, clinical and manufacturing practices. The FDA also requires compliance with rules pertaining to the manner in which we may promote our products. European Union In the EU, there are three main procedures for application for authorization to market pharmaceutical products in more than one EU member state at the same time: (i) the centralized procedure; (ii) the mutual recognition procedure; (iii) and the decentralized procedure. It is also possible to obtain a national authorization for products intended for commercialization in a single EU member state only. The procedure used for first authorization must continue to be followed for subsequent changes, e.g., to add an indication for a licensed product. Under the centralized procedure, applications are made to the EMA for an authorization that is valid for the European Union (all member states). The centralized procedure is mandatory for all biotechnology products; new chemical entities in cancer, neurodegenerative disorders, diabetes, AIDS, autoimmune diseases and other immune dysfunctions; advanced therapy medicines, such as gene therapy, somatic cell therapy and tissue-engineered medicines; and orphan medicines (medicines for rare diseases). It is optional for other new chemical entities, innovative medicinal products, and medicines for which authorization would be in the interest of public health. When a pharmaceutical company has gathered data that it believes sufficiently demonstrates a drug’s safety, efficacy and quality, the company may submit an application to the EMA. The EMA then receives and validates the application, and the Committee for Medicinal Products for Human Use (CHMP) appoints a rapporteur and co-rapporteur to review it. They use experts from their countries to carry out the assessment but can also draw on expertise from other member states (“multinational teams”). The entire review cycle must be completed within 210 days, although there 33 are “clock stops” to allow the company to respond to questions set forth in the rapporteur and co-rapporteur’s assessment report and agreed with the CHMP. The first clock stop is at Day 120 and the clock restarts on Day 121, when the company’s complete response is received by the EMA. If there are further aspects of the dossier requiring clarification, the CHMP will issue further questions at Day 180, and may also request an oral explanation, in which case the sponsor must not only respond to the further questions but also appear before the committee to justify its responses. On Day 210, the CHMP will take a vote to recommend the approval or non-approval of the application, and their opinion is transferred to the European Commission (EC). The final EC decision under this centralized procedure is a single decision that is applicable to all member states. This decision occurs 60 days, on average, after a positive CHMP recommendation. As in the US, the EU offers pathways to facilitate and expedite the development and review of new drugs of major interest for public health and therapeutic innovation, including PRIME designation and Accelerated Assessment. Applications eligible for Accelerated Assessment are reviewed up to 60 days faster than those reviewed under Standard Assessment. Under both the mutual recognition procedure (MRP) and the decentralized procedure (DCP), the assessment is led by one member state, called the reference member state (RMS), which then liaises with other member states, known as the concerned member states. In the MRP, the company first obtains a marketing authorization in the RMS, which is then recognized by the concerned member states within 90 days. In the DCP, the application is undertaken simultaneously in the RMS and all concerned member states. During the DCP, the RMS drafts an assessment report within 120 days. Within an additional 90 days, the concerned member states review the application and can issue objections or requests for additional information. On Day 90, each concerned member state must be assured that the product is safe and effective, and that it will cause no undue risks to the public health. Once an agreement has been reached, each member state grants national marketing authorizations for the product. After receiving the marketing authorizations, the company must submit periodic safety reports to the relevant health authority (EMA for the centralized procedure; national health authorities for DCP or MRP). In addition, pharmacovigilance measures must be implemented and monitored, including the collection, evaluation and expedited reporting of adverse events, and updates to risk management plans. For some medications, post-approval studies (Phase IV) may be imposed to complement available data with additional data to evaluate long-term effects (called a Post-Approval Safety Study, or PASS) or to gather additional efficacy data (called a Post-Approval Efficacy Study, or PAES). European marketing authorizations have an initial duration of five years. The holder of the marketing authorization must actively apply for its renewal after this first five-year period. As part of the renewal procedure, the competent authority performs a full benefit-risk review of the product. Should the authority conclude that the benefit-risk balance is no longer positive, the marketing authorization can be suspended or revoked. Once renewed, the marketing authorization is valid for an unlimited period, unless it is determined that the product must be further monitored for safety reasons. In this case, the authority may require another renewal at 10 years. If the holder does not apply for renewal, the marketing authorization automatically lapses. Any marketing authorization that is not followed within three years of its granting by the actual placing on the market of the corresponding medicinal product ceases to be valid. Price controls In most of the markets where we operate, the prices of pharmaceutical products are subject to both direct and indirect price controls and to drug reimbursement programs with varying price control mechanisms. Due to increasing political pressure and governmental budget constraints, we expect these mechanisms to remain robust — and potentially even be strengthened — and to have a continued negative influence on the prices we are able to charge for our products. Direct governmental efforts to control prices United States: The Inflation Reduction Act of 2022 (IRA), signed into law in August 2022, mandates that eligible Medicare Part B and Part D drugs participate in what the statute calls the Drug Price Negotiation Program (Program); redesigned the Medicare Part D benefit, including a USD 2 000 out-of-pocket cap for Medicare beneficiaries going into effect in 2025; and imposed penalties for Medicare drugs that increase in price faster than the rate of inflation. Under the Program, the US government will set Medicare prices for selected products it has defined as single-sourced small-molecule drugs that have been on the market for seven years following FDA approval, as well as single-sourced biologics that have been on the market for 11 years after FDA approval, and will become effective for selected drugs two years later (nine years after FDA approval for eligible small molecules, and 13 years after FDA approval for eligible biologics). Medicare drugs with the highest total cost to the US government are selected for the Program as they become eligible. Exemptions include orphan drugs that have approvals only in orphan conditions, drugs with a total cost to Medicare of less than USD 200 million, and plasma-derived drugs. The IRA will be implemented as follows: • 10 eligible Medicare Part D drugs in 2026 • An additional 15 eligible Medicare Part D drugs in 2027 • An additional 15 eligible combined Medicare Part B and Part D drugs in 2028 • An additional 20 eligible combined Medicare Part B and Part D drugs in 2029 • An additional 20 eligible combined Medicare Part B and Part D drugs each year after 2029 On August 29, 2023, the US government released the list of the first 10 drugs to be subject to the Program, and Entresto was one of the selected products. Novartis has completed the process of participating because manufacturers that refuse to participate are subject to an excise tax of up to 95% of sales. Further, the CMS 34 selected Cosentyx, Kisqali, and Xolair as part of the Medicare Drug Price Negotiation Program for 2028. We are also affected by other provisions of the IRA, such as price increase penalties for Medicare drugs, and new mandatory rebates on eligible Medicare Part D sales. Ongoing changes to the 340B Program landscape continue to affect our business. The expansion of the program and the increasing number of covered entities and contract pharmacies seeking access to 340B pricing could have an impact on our revenue as it becomes a growing proportion of sales. Novartis regularly reviews and updates its contract pharmacy policy in response to changes related to 340B, including recent clarifications of the definition of in-house pharmacies and modifications addressing the management of limited distribution networks. One aspect of the evolving 340B program is the introduction of 340B-related legislation by individual states that requires Novartis to sell to all contract pharmacies in that state. In 2025, 25 states introduced 340B legislation and 11 states passed 340B-related bills, with this trend expected to continue in 2026. To date, government intervention regarding unforeseen growth of the 340B program has been limited. In August 2025, the Health Resources and Services Administration (HRSA) announced a pilot program (the Rebate Model Pilot Program) that will allow manufacturers to provide 340B pricing through a rebate-based model. This pilot program was only available for the 10 products included in the initial year of the Medicare Drug Price Negotiation program. Entresto is one of those selected products, and HRSA approved Novartis’s implementation plan for the Rebate Model Pilot Program. However, in December 2025, a US court enjoined implementation of the Rebate Model Pilot Program and the ultimate timing for any such program is currently uncertain. In addition, a number of US states have passed legislation intended to impact pricing or requiring manufacturers to report price increases to states, with some of these states also allowing for drug affordability (i.e., price control) review boards. The disclosure requirements vary by state. Many states require multiple types of reporting, including for new drug applications, new drug launches, prior notice of price increases, and quarterly or annual reporting. Other policy changes have recently been proposed in the US focusing on drug pricing, including the May 2025 executive order that is aimed at using price benchmarks from other developed countries to set US pricing targets. Additionally, in July 2025, the US administration sent letters to several pharmaceutical manufacturers, including Novartis, that, among other things, sought commitments from manufacturers to match US prices to the lowest price offered in certain other developed nations. Further, in December 2025, we announced a voluntary agreement with the US administration that aims to lower the cost of medicines in the US. We have agreed to take actions aimed at meeting the US administration’s drug pricing priorities, including, among other things, launching future medicines with comparable prices across high-income countries. We have also agreed to building direct-to-patient platforms for Mayzent, Rydapt and Tabrecta, applying to participate in the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model aimed at further improving access to medicines in the US Medicaid program, and supporting efforts to address the global imbalance in investment in pharmaceuticals. See “Item 3. Key Information—Item 3.D Risk factors—Pricing, reimbursement and access—Pricing and reimbursement pressure, including pricing transparency and access to healthcare” for additional information. Europe: Our operations in Europe are subject to significant price and marketing regulations. Many governments are introducing healthcare reforms in a further attempt to curb increasing healthcare costs. In some EU member states, these include reforms to permit the reimbursed use of off-label medicines, despite the presence of licensed alternatives on the market. In the EU, governments influence the price of pharmaceutical products through their control of national healthcare systems that fund a large part of the cost of such products to patients. The downward pressure on healthcare costs in general in the EU, particularly with regard to prescription drugs, is intense. Increasingly strict analyses are applied when evaluating the entry of new products, and as a result, access to innovative medicines is limited based on strict cost-benefit assessments. In addition, prices for marketed products are referenced within member states and across international borders, further impacting individual EU member state pricing. Member states also collaborate to enhance pricing transparency, and have started conducting joint health technology assessments, joint pricing negotiations, and/or joint purchasing. As an additional control for healthcare budgets, some EU countries have passed legislation to impose further mandatory rebates for pharmaceutical products and/or financial claw-backs on the pharmaceutical industry. The calculation of these rebates and claw-backs may lack transparency in some cases and can be difficult to predict. Regulations favoring generics and biosimilars In response to rising healthcare costs, most governments and private medical care providers have established reimbursement schemes that favor the substitution of more expensive brand-name pharmaceuticals by generic pharmaceuticals. All US states have generic substitution statutes. These statutes permit or require the dispensing pharmacist to substitute a less expensive generic drug instead of an original drug. Other countries, including many European countries, have similar laws. We expect that the pressure for generic substitution will continue to increase. In addition, the US, the EU and other jurisdictions are increasingly introducing laws and regulations that encourage the development of biosimilar versions of biologic drugs, which can also be expected to have an impact on pricing. Cross-border sales Price controls in one country can have an impact in other countries as a result of cross-border sales. In the EU, products that we have sold to customers in countries with stringent price controls can be legally resold to customers in other EU countries at a lower price than the price at which the product is otherwise available in the importing country (known as parallel trade). In North America, products that we have sold to customers in Canada – which has relatively stringent price 35 controls — are sometimes resold into the US, again at a lower price than the price at which the product is otherwise sold in the US. Reimportation from Canada and other countries into the US for commercial purposes is currently illegal. An exception is that states may seek approval from the Secretary of HHS to establish a Canadian drug importation program. Seven US states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have enacted laws authorizing the establishment of such a program. However, the Secretary of HHS must approve each state importation plan before it can be implemented. As of December 31, 2025, Florida is the only state to have received FDA approval for a state importation plan, but has not yet implemented it. We expect that pressures on pricing will continue worldwide and will likely increase. Because of these pressures, there can be no certainty that in every instance we will be able to charge prices for a product that, in a particular country or in the aggregate, would enable us to earn an adequate return on our investment in that product. Intellectual property Intellectual property (IP) rights, including patents, trademarks, copyrights, know-how, and trade secrets, as well as regulatory-based protections, are essential to our business as an innovative medicines company, and protect our innovation and investments in research and development, manufacturing, and marketing of our products. Patents Patents may cover a product itself, including the product’s active ingredient or other ingredients and its formulation. Patents may also cover processes for manufacturing a product, including processes for manufacturing intermediate substances used in the manufacture of the product. In addition, patents may cover particular uses of a product, such as its use to treat a particular disease, or its dosage regimen. Further, patents may cover tests for certain diseases or biomarkers — which can improve patient outcomes when administered with certain drugs — as well as assays, research tools, and other techniques used to identify new drugs. United States • In the US, an issued patent will generally receive a term of 20 years from the earliest application filing date and may be eligible for potential patent term adjustments if there are delays in prosecution of the patent by the United States Patent and Trademark Office (USPTO). • A US pharmaceutical patent may also be eligible for a patent term extension (PTE) given that the development of a pharmaceutical product and its review by the FDA can take an extended period of time. PTE provides an extension of patent term to compensate for the time taken to conduct clinical trials and for the FDA’s review process. The PTE may only extend the patent term for a maximum of five years and may not extend the patent term beyond 14 years from the first US regulatory approval. For a patent to be eligible for PTE, the patent must claim the product, a method of using the product, or a method of manufacturing the product. In addition, only one patent may be extended for any product. European Union • Patent applications in Europe may be filed in the European Patent Office (EPO) or in the patent offices of particular countries. The term of a patent granted by the EPO or an EU country’s patent office is 20 years from the earliest application filing date. A patent issued by the EPO may also become a Unitary Patent, enforceable in multiple countries in the EU. • Given that the development of a pharmaceutical product and its review by health authorities in the EU can take an extended period of time, a pharmaceutical patent in the EU may be eligible for a patent term extension that is called a supplementary protection certificate (SPC). An SPC may only extend the term of a patent for a maximum of five years, and may not extend the term of the patent beyond 15 years from the date of the first EU marketing authorization for the product covered by the patent. There is no unified procedure among countries in the EU for obtaining an SPC, and SPCs must be applied for and granted on a country-by-country basis. Whether we are granted PTEs or SPCs, and the duration thereof, may depend on many factors, including whether we have: exercised due diligence during the product testing phase or regulatory review process; have applied for the extension within applicable deadlines; and satisfied all other applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. RDP and market exclusivity In addition to patent protection, various countries provide regulatory-based protection, including regulatory data protection (RDP) and/or other market exclusivities, for a prescribed period of time. RDP provides exclusivity that precludes a potential competitor from filing a regulatory application that relies on the sponsor’s clinical trial data, or that precludes the regulatory authority from approving the application for a set period of time. United States • A new small-molecule active pharmaceutical ingredient receives five years of RDP, during which time a competitor generally may not obtain final approval of an application to the FDA based on a sponsor’s clinical data. • A new biologic active pharmaceutical ingredient receives 12 years of regulatory-based market exclusivity, during which time a competitor generally may not market the same or similar drug. • The FDA may also request that a sponsor conduct pediatric studies, and, in exchange, it will grant an additional six-month period of pediatric market exclusivity if the sponsor makes a timely submission of the reports of the pediatric studies in response to the FDA’s written request. The sponsor must also have a patent-based and/or regulatory-based exclusivity period for the product to which the pediatric market exclusivity is appended. 36 • Orphan drug exclusivity (ODE) provides seven years of market exclusivity for drugs designated by the FDA as orphan drugs, meaning drugs that treat rare diseases affecting fewer than 200 000 people in the US. During this period, a potential competitor generally may not market the same or similar drug for the same indication even if the competitor’s application does not rely on data from the sponsor. European Union • A new pharmaceutical ingredient receives eight years of data protection, during which a competitor cannot rely on the relevant data; a further period of two years of market exclusivity, during which the data can be used to support applications for marketing authorization but a competing product cannot be launched; and a possible one-year extension of the market exclusivity period if, during the initial eight-year data exclusivity period, the sponsor registered a new therapeutic indication with “significant clinical benefit.” • ODE provides for 10 years of market exclusivity, during which time an application for the same or similar medicine for the same indication will not generally be accepted or granted. Under certain circumstances, this exclusivity can be extended with a two-year pediatric extension. Third-party patents and challenges to intellectual property Third parties can challenge our IP, including patents, PTEs, SPCs, RDP, and marketing exclusivities (such as pediatric extensions and ODE), through various proceedings. For example, patents in the US can be challenged in the USPTO through various proceedings, including inter partes review (IPR) and post-grant review (PGR) proceedings. They may also be challenged through patent infringement litigation under the Abbreviated New Drug Application (ANDA) provisions of the Hatch-Waxman Act or under the Biologics Price Competition and Innovation Act (BPCIA). In the EU, patents may be challenged through oppositions in the EPO, or revocation actions before the Unified Patent Court, whereas national patents may be challenged in national courts or national patent offices. The outcomes of such challenges can be difficult to predict. In addition to directly challenging our IP rights, in some circumstances a competitor may be able to market a generic version of one of our products by, for example, designing around our patents or marketing the generic product for non-patent-protected indications. A competitor may seek approval for a modified product (e.g. a different dosage form or strength) by filing a separate hybrid New Drug Application (NDA) under the Hatch-Waxman Act that relies partly on existing data and on new data to support the changes (typically referred to as a 505(b)(2) application). Despite RDP, a competitor could opt to incur the costs of conducting its own clinical trials and preparing its own regulatory application and avoid our RDP altogether. There is a risk that some countries may seek to impose limitations on or seek not to recognize the availability of IP rights for pharmaceutical products or may limit the extent to which such rights are enforced. Additionally, even though we may own, co-own or in-license patents protecting our products and conduct freedom-to-operate analyses, a third party may nevertheless assert that one of our products infringes or otherwise violates a third-party patent or other intellectual property right for which we do not have a license, seeking remedies such as monetary damages or an injunction against our continued marketing of the product. As a result, there can be no assurance that our IP rights will protect our products or that we will be able to avoid adverse effects from the loss of IP protection or from third-party patents or other intellectual property rights in the future. For more information on the risks related to IP, see “Item 3. Key Information—Item 3.D Risk factors—Intellectual property—Expiry, assertion or loss of intellectual property protection.” Intellectual property protection for certain key marketed products and compounds in development The following chart lists our key marketed products, together with the year in which, unless otherwise indicated, the basic composition of matter (CoM) patent protection (including granted PTEs, granted SPCs, and granted pediatric exclusivity periods) or regulatory exclusivity (for example, RDP or ODE), whichever lasts longer, is currently estimated to expire in the US and EU. In instances where Novartis has been involved in litigation or other proceedings regarding such patent protection, the date provided reflects any license or other rights Novartis granted under the patent for a generic or biosimilar competitor. We also sell these products in other countries, but do not include exclusivity loss on a country-by-country basis, which may vary considerably from the estimated loss in the US and EU. Generally, the dates in the table below for each of the products are estimated only for the purpose of base-case business or financial planning. Moreover, where applicable, we provide information regarding current challenges involving the patents or regulatory exclusivities expiring on the listed dates. In addition, we may own, co-own, control, or have rights to additional, later-expiring patents relating, for example, to compound forms, methods of treatment or use, formulations, devices, processes, product-by-process, synthesis, purification, and assays. We may also be seeking or may have been granted forms of regulatory exclusivity that may expire later than the dates shown below. These later-expiring patents or RDP may or may not protect our products from generic or biosimilar competition after the date specified. Novartis strongly believes in the entire portfolio of innovation and technology covering its products and may therefore seek to appropriately enforce any and all of its intellectual property and RDP for a given product in a country. Accordingly, the listing of any date in the table below should not be regarded as the date after which Novartis expects generic or biosimilar competition or as any indication of the strength or coverage of any later-expiring intellectual property or RDP. It is not possible to predict with certainty the length of patent or regulatory-based market exclusivity for any of our products due to the complex interaction between patent and regulatory forms of exclusivity, and the inherent uncertainties regarding IP litigation. There can be no assurance that a particular product will receive patent or regulatory-based market exclusivity for the full period 37 of time that we estimate, or at all, and the products listed below may face generic or biosimilar competition in the US or EU earlier than the dates listed below. See “Item 3. Key Information—Item 3.D Risk factors—Intellectual property—Expiry, assertion or loss of intellectual property protection” for additional information. Product Year of Expiration (US) Year of Expiration (EU)1 Entresto Combination patent expired 2026 2 Cosentyx 2029 2030 Kesimpta 2031 CoM patent expired 4 Kisqali 2031 2032 Promacta/Revolade CoM patent expired CoM patent expired Tafinlar 2030 2029 Mekinist 2027 3 2029 Use of Mekinist with Tafinlar or Tafinlar with Mekinist 2031 2030 Jakavi N/A 2028 Xolair N/A CoM patent expired Tasigna CoM patent expired CoM patent expired Ilaris CoM patent expired 4 CoM patent expired Pluvicto 2034 5 2037 Zolgensma 2033 2033 Leqvio 2034 5 2035 Scemblix 2035 2037 Lutathera ODE expired 6 2029 Fabhalta 2034 5 2039 1 SPC (including pediatric extensions (PE)) expiry dates are listed when an SPC/PE has been granted in at least one of the following European markets: France, Germany, Italy, Spain, and the United Kingdom. 2 RDP expires in 2026. Combination patent with SPC expires in 2028. Novartis has additional, later expiring EU patents that it will enforce as appropriate. 3 Certain patents (expiring in 2032) are being challenged in ANDA proceedings by a generic manufacturer. 4 There is no generic or biosimilar competition for this product in this market. 5 We have applied for a PTE or SPC which is pending. 6 Formulation patents (expiring in 2039 with PE) are being challenged in patent proceedings against manufacturers having FDA applications referencing Lutathera. Established Brands Lucentis faces generic competition in the EU. For Sandostatin SC, there is generic competition in the US and the EU. For Sandostatin LAR, there is generic competition in the US and in most EU countries. Compounds in development We provide certain patent information for non-marketed compounds in development that have been submitted to the FDA and/or the EMA for registration but have yet to be approved by either agency. For these products, Novartis will seek all appropriate RDP, will continue to seek additional intellectual property protection for significant product developments, and will apply for PTEs and SPCs in keeping with the great importance we place on intellectual property. Trademarks Our products are sold under brand names and logos that are generally protected as trademarks and/or through related intellectual property rights. Trademark registrations are for fixed, but renewable terms, with protection provided, depending on the country, for as long as the trademark is registered and/or in use. Protecting our trademarks is of material importance to us. 38 4.C Organizational structure Organizational structure See “Item 4. Information on the Company—Item 4.A History and development of Novartis” and “Item 4. Information on the Company—Item 4.B Business overview—Overview.” Significant subsidiaries See “Item 18. Financial Statements—Note 31. Novartis principal subsidiaries and associated companies.” 39 4.D Property, plants and equipment Our principal executive offices are located in Basel, Switzerland. We operate through a number of affiliates that have offices, research and development facilities, and production sites throughout the world. We generally own our facilities or have entered into long-term lease arrangements for them. Some of our principal facilities are subject to mortgages and other security interests granted to secure certain debts. Our Operations organizational unit manages the production, quality, and supply chain of our products through a network of 31 manufacturing sites, as well as through external suppliers, and warehouse and distribution centers. In addition, our Operations organizational unit also manages non-production real estate owned or leased by Novartis around the world. The following table sets forth our major headquarters and most significant production, research and development, and administrative facilities. See also “—Item 4.B Business overview—Production” for a discussion of our manufacturing processes. Major facilities Location Size of site (in square meters) Major activity Basel, Switzerland – St. Johann 481 448 Global Company headquarters; International organizational unit headquarters; research and development Kundl and Schaftenau, Austria 283 017 Production of biotechnological products, active drug substances and nucleic acids, drug products and finished products; product development Cambridge, Massachusetts, US 167 225 Research and development Menges, Slovenia 166 591 Production of small molecules and large molecules drug substances and drug intermediates; Research and development for Biologics Ljubljana, Slovenia 144 717 Management of the small molecules platform, testing hub for Novartis manufacturing sites, production of oral dosage forms, and aseptic drug product manufacturing East Hanover, NJ, US 123 751 US organizational unit headquarters; research and development Shanghai, China 105 614 China country headquarters; research and development Stein, Switzerland 64 700 Production of sterile vials, pre‑filled syringes and ampoules; capsules and tablets; active pharmaceutical ingredients; and cell and gene therapies Huningue, France 41 000 Production of drug substances for clinical and commercial supply Durham, North Carolina, US 15 794 Manufacture, package and release commercial Zolgensma product and certain clinical development activities Schweizerhalle, Switzerland 8 880 Manufacture of small-interfering RNA (siRNA) drug substance for Leqvio Indianapolis, Indiana, US 8 230 Manufacture, package and release clinical and commercial Pluvicto and Lutathera product for US and Canada Ivrea, Italy 4 300 Galenic development and manufacture, package and release of radioligand therapy products in oncology (clinical & commercial) Pluvicto and Lutathera product As our product portfolio evolves, the Company is adapting our manufacturing capacity and capabilities to meet our changing needs, shifting from high-volume products toward lower-volume, customized and personalized medicines. We have closed, exited, consolidated or sold 6 Novartis manufacturing sites in the three-year period ended December 31, 2025. We continue expanding our capacity in new technologies such as cell culture and radioligand therapy, and in our core biopharmaceutical manufacturing and small molecule manufacturing. We are further making investments to expand our US-based manufacturing and R&D footprint and to enable end-to-end production of all key medicines for patients in the US. We are leveraging innovation to increase the reliability and productivity of our manufacturing network, including using data and digital and manufacturing automation technologies. We continue to seek opportunities to manage our production facilities as efficiently as possible, optimize external spend, and simplify and standardize across our manufacturing network to help us increase our cost competitiveness and optimize the value of our products. At the same time, we are working to improve our environmental sustainability, for example by reducing energy, waste disposal, and water consumption at our sites by making our manufacturing processes more efficient, introducing new technologies, and switching to clean and renewable energy solutions. For a description of the impact of environmental matters, see “Item 3. Key Information—Item 3.D Risk factors—Environmental matters—Impact of environmental liabilities,” and “Item 3. Key Information—Item 3.D Risk factors—Climate change and natural disasters—Failure to manage risks from climate change and natural disasters.” See also “Item 18. Financial Statements—Note 20. Provisions and other non‑current liabilities.” 40