CEO’s letter

The Novartis team works tirelessly to bring life-changing medical innovation to the world. We had a strong year in 2019 – delivering on our strategy, producing strong financial results, and making a significant impact on society by improving and extending the lives of people across the globe.

Vasant Narasimhan – Chief Executive Officer (Photo)

In April, we took an important step with the spin-off of our former Alcon eye care devices division, further transforming Novartis into a focused medicines company.

Our research and development teams launched five all-new medicines in 2019, from our groundbreaking gene therapy Zolgensma, to the first targeted biologic medicine for sickle cell disease patients. We also advanced the development of more than 25 potential blockbuster treatments that we hope to launch in the coming years. This progress shows the power of our innovation engine, and of our people.

We are increasingly recognized as a leader in our industry in integrating data science and digital technologies into all aspects of our work – from discovering new medicines in the lab to improving manufacturing efficiency and serving our customers more effectively

We are taking steps to make our treatments available to more people worldwide by integrating access strategies into the core of our business. Our work to tackle sickle cell disease is one example. Adakveo, our new treatment for this life-threatening, inherited blood disorder, was approved for use in the US last November. At the same time, we launched a collaboration in Ghana to expand diagnosis and treatment of the disease and to strengthen the broader healthcare system – an approach that could become a model for other African countries.

We are increasingly recognized as a leader in our industry in integrating data science and digital technologies into all aspects of our work – from discovering new medicines in the lab to improving manufacturing efficiency and serving our customers more effectively. We are making progress on 12 major projects to deploy key digital technologies and data analytics at scale, and we’re collaborating with other companies to accelerate our efforts in areas such as artificial intelligence.

There’s significant work underway to transform how we operate, expand our capabilities and make us more efficient. In our manufacturing operations, we are adding capabilities in areas such as cell therapies, where we now have processing capacity in place on every major continent. In business services, we’re getting smarter at procurement and redesigning our work to get at the root of inefficiencies, such as how we prepare marketing materials across the company.

Delivering on our strategy supported our financial performance in 2019. Strength in key products helped us post net sales of USD 47.4 billion, up 9%, measured in constant currencies (cc). Our core operating income rose 17% (cc) to USD 14.1 billion, increasing core margin by 1.9 percentage points (cc) to 29.7%.

I’m incredibly grateful for the hard work of our employees, whose passion and commitment is driving our momentum on every front. They are helping us transform our company culture, which I believe will be a core performance driver for Novartis. It will take time, but after visiting Novartis sites in nearly 40 countries since I took over as CEO two years ago and seeing the results from our internal surveys, I’m confident our culture change is taking hold.

The progress we made this past year is helping set the foundation for a remarkable future for our company as we strive to create long-term value for patients, for society and for our shareholders. Thank you for your support as we continue reimagining medicine together.

Sincerely,
Vas Narasimhan
Chief Executive Officer