Return of a traditional name: Novartis Generics rebranded as Sandoz

§ Novartis Generics companies worldwide adopting the Sandoz name
§ New biotechnology facilities coming on stream in Kundl
§ Since 2000 EUR 260 million investment in Austria

Vienna, 20 May 2003. From 21 May 2003, Novartis, one of the world's leading pharmaceutical groups, will be conducting its generics operations hitherto Novartis Generics under a single brand name, Sandoz. Austria's flagship pharmaceutical company, Biochemie GmbH (Kundl/Tyrol), will likewise be operating under the new name.

Christian Seiwald, Head of Novartis Generics and henceforth CEO of Sandoz, commented: "Over the last few years, Novartis Generics has grown extremely dynamically and undertaken a series of strategic acquisitions. While we are currently the world's second-biggest generics group, we are not recognized as such due to the large number of different brand names. The establishment of a uniform brand and identity represents a milestone in our strategy for strengthening and harmonizing our international business."

In Seiwald's view, the Sandoz name reinforces the company's reputation for high quality and innovation and provides the additional bonus of a company tradition going back more than a century: "We want Sandoz to become the undisputed no. 1 global brand for generic pharmaceutical products."

Sandoz, which was established in Basel in 1886, was a pharmaceutical market player up until its merger with Ciba-Geigy in 1996 to form Novartis. The rebranding of Novartis Generics now marks the return of this time-honored name. For the time being, our affiliate Lek will keep its name as agreed between the management of the two companies at the time of Lek's acquisition.

Since February 2003, Sandoz's global headquarters have been located in Vienna, further strengthening the company's traditionally close ties with Austria; the company had previously had a strong Austrian presence in the shape of Biochemie GmbH.

New high-tech facilities and major investments in Austria

Today (Tuesday, 20 May), coinciding with Biochemie GmbH's adoption of the new Sandoz GmbH name, two new high-tech facilities for the production of active biopharmaceutical ingredients have officially come on stream in Kundl/Tyrol. In addition, a new office complex for the management of the global Industrial Business Franchise has been officially inaugurated. Investments in these facilities amount to EUR 100 million. Since the year 2000 the company has invested around EUR 260 million in Austria.

Dr. Heinrich Scherfler, Chairman of the Board of Sandoz GmbH, Austria, commented: "With the adoption of the Sandoz name and our latest program of investments in state-of-the-art active ingredients, we are pleased to be setting a new, double milestone in our company's history."

The new facilities comprise a number of research laboratories, technical installations and equipment for the production of recombinant biopharmaceuticals, i.e. potent pharmaceutical agents produced using the latest biotechnological methods. Biopharmaceuticals including various hormones, interferons and other substances that occur naturally in humans are playing an increasingly important role in modern medicine.

With over 20 years' experience in the development and manufacture of biotechnologically produced active ingredients, entry into this sector was a logical step for the company now rebranded as Sandoz. This Business Franchise currently employs more than 350 staff and has accounted for more than half of the striking increase in headcount (more than 500 new jobs) that has occurred over the past four years. The company now employs a total of 2,500 people in Austria.

According to Christian Seiwald, "The decision to move into the biopharmaceutical sector is a decision to secure the future of our Kundl and Schaftenau locations in Tyrol. Over the next decade, biopharmaceuticals will be one of our key growth drivers. However, we are also investing heavily in our pharmaceutical finished products business and in active pharmaceutical and biotechnological ingredients."

In addition to this capital investment program, expenditure on R&D has risen continuously in recent years, reaching the record level of EUR 84 million in 2002. More than 400 staff around 16% of the company's Austrian workforce is working in this area alone. A substantial proportion of recent expenditure has been committed to development activities for biopharmaceuticals. As Dr. Scherfler pointed out, "In contrast to earlier research projects, this initiative received support from government agencies. We see this as a sign of the state's support for Austria as a business location, and I would also like to thank the funding agencies for their assistance."

The opening of the company's new administrative center is also a signal for the importance of the Tyrol site. The modern office complex for the management of the global Industrial Business Franchise is a state-of-the-art building, accommodating more than 70 staff.
Company Information
Sandoz, a Novartis company, is a world leader in generic pharmaceuticals and develops, manufactures and markets these medicines as well as pharmaceutical and biotechnological active ingredients. Decades of experience und profound know-how make Sandoz a renowned partner in the Franchises Pharmaceuticals, Biopharmaceuticals and Industrial Products. Altogether, Sandoz employs around 11,500 people worldwide and posted sales of USD 1.8 billion in 2002.

Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2002, the Group's businesses achieved sales of USD 20.9 billion and a net income of USD 4.7 billion. The Group invested approximately USD 2.8 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 77,200 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.

This release contains certain "forward-looking statements" relating to the Group's business, which can be identified by the use of forward-looking terminology such as "coming on stream", "will be", "to become", or similar expressions, or by express or implied discussions regarding strategies, plans and expectations. Such statements reflect the current plans or views of the Group with respect to future events and are subject to certain risks, uncertainties and assumptions. Management's expectations could be affected by, among other things, competition in general, and other risks referred to in Novartis AG's Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected.