Chairman’s letter

Novartis delivered a solid performance in 2021. Strong demand for heart failure medicine Entresto, psoriasis and autoimmune disease treatment Cosentyx, and recently launched therapies such as multiple sclerosis drug Kesimpta helped us increase sales and net profit as we maintained cost discipline. Looking ahead, we are confident we can maintain our momentum as we remain focused on operational excellence and science-based innovation.

Joerg Reinhardt (Photo)

With more than 12 new drug approvals by the US Food and Drug Administration in the past five years, we are committed to our long-term research and development (R&D) strategy, which is aimed at creating breakthrough therapies for patients with high unmet medical needs. We strive to build leading market positions in fast-growing areas of medicine and broaden patient reach to deliver on our purpose to improve and extend people’s lives around the world.

Last year we continued to make significant investments in R&D, including in cutting-edge medical technologies such as radioligand therapy and small-interfering RNA. Our clinical pipeline covers a diverse area of noncommunicable diseases such as cancer and heart disease. This is positioning us well for the future amid the rising global need for innovative chronic therapies as we continue to strengthen patient engagement.

Looking ahead, we are confident we can maintain our momentum as we remain focused on operational excellence and science-based innovation

We started a strategic review of our Sandoz generics division with the goal of strengthening its operational performance and maximizing shareholder return. Also, we divested our investment in Roche Holding AG, reflecting our strategy to create a focused medicines company.

Acute pressure on societies and healthcare systems due to the COVID-19 pandemic remains high. In this challenging environment, our focus on operational excellence and shift to flexible working by our employees continued to help us navigate the crisis. In a post-pandemic world, these lessons will enable us to maintain high levels of resilience and operational efficiency while continuing to position us as an employer of choice in a changing work environment.

We also made further progress in our environmental, social and governance (ESG) activities, which are an essential part of our strategy and an important reputation driver. Besides our progress in reducing our environmental footprint, we broadened patient access to our strategic medicines and launched a new program in the United States to address health disparities – all with the intention to create more equitable and sustainable healthcare systems and support the United Nations’ efforts to achieve the Sustainable Development Goals.

The Board of Directors took further action to strengthen governance. We paved the way for comprehensive ESG oversight and changed the leadership of the Compensation Committee and the Governance, Nomination and Corporate Responsibilities Committee. We also nominated a new Board member. Together with the Executive Committee, the Board of Directors will continue the intensive dialogue with all stakeholder groups with a view to further strengthen trust in society and to maximize shareholder return.

I thank you for the confidence you have placed in our company and am pleased to be able to propose a dividend increase of 3.3% to CHF 3.10 at the next Annual General Meeting.

Sincerely,

Joerg Reinhardt
Chairman of the Board of Directors