Preservation of Novartis production site in Nyon/Prangins thanks to constructive solutions

• Thanks to the comprehensive engagement of associates, the political authorities involved and Novartis, solutions have been found for what is likely to be a sustainable profitability of the Nyon/Prangins site
• Novartis affirms its engagement in Basel and is determined together with the government of Basel-Stadt to mitigate the impact of the proposed job cuts at this site as far as possible
• With its Vision Campus 2030 Novartis remains committed to the Basel region and to Switzerland

Basel, January 17, 2012 - After the conclusion of the consultation process stipulated by law and an intensive phase of constructive collaboration with all the parties involved Novartis today announced the final decisions taken in the conclusion of the consultation process with regard to the production site in Nyon/Prangins. The company confirmed that after an intensive review of all possible measures, which involved all stakeholders, including local, cantonal and federal authorities, employee representatives and associates as well as Novartis, the production site in Nyon/Prangins, Switzerland is to be preserved.

"Today's announcement reflects the joint efforts of all the parties concerned. We have worked together to find constructive solutions for the sustainable improvement of the profitability of the Nyon/Prangins site, which Novartis alone could not have achieved", said Joseph Jimenez, CEO of Novartis. "The jointly found solutions bear testimony to the spirit of cooperation and the commitment to shared responsibility shown by all the parties involved. This includes our associates, the representatives of the Swiss Federal Council and the cantonal and local authorities as well as the management of Novartis."

As Minister for Economic Affairs, Federal Councilor Johann Schneider-Ammann expressed his delight at the decision by Novartis, because it "is a clear commitment and positive sign for Switzerland as a center for industry and research." The Basel government also welcomes the decision of Novartis: "In intensive negotiations we succeeded in reducing the number of layoffs substantially", says government councilor Christoph Brutschin. Philippe Leuba, government councilor canton of Vaud, confirms: "A very important job has been done in a particularly difficult situation. More than 300 industrial jobs have been saved which also brings a long-term diversification of the economic tissue in the canton of Vaud. The Council of State is fully satisfied with the result."

The proposed solutions that are intended to secure a sustainable profitability of the Nyon/Prangins site include the reduction of fixed costs and cantonal tax relief over a limited period. Moreover, the associates will also make an important contribution. The entire workforce will forego part of the pay increase agreed to for 2012 and associates covered by the collective bargaining agreement who are currently working a 37.5-hour week agree to an increase in their work time to a 40-hour week. Finally, Novartis will make a substantial financial contribution. The company plans to invest in the modernization of the production plants and to apply for approval of the production site by the US American health authority (FDA). The decision to keep the Nyon/Prangins site open will not have any negative repercussions on other Novartis sites.

Continued commitment to Basel and Switzerland
"All stakeholders from Basel, Vaud and the federal government have sought joint solutions to make sure Switzerland remains a sustainable basis for future growth and continued investments by Novartis", said Pascal Brenneisen, Head of Novartis Switzerland. "We shall continue to stand by our sites in Switzerland, in Basel-Stadt and the surrounding region."

Novartis likewise announced that it will probably manage to find other positions within the company for about a third of the associates in Basel affected by the restructuring and offer the possibility of early retirement to another third. In addition, the situation is currently being reviewed together with outside experts and the Novartis Venture Fund to establish if further positions might be preserved through a spin-off of the toxicology group.

Novartis is keeping to its long-term plan to extend the Campus in Basel. As plans stand at present, premises should be able to accommodate around 10,000 associates, mainly in research and development, but also in general administrative functions, by 2030. At present there are more than 7,000 full-time equivalents on the Novartis Campus. In the past 10 years, Novartis has increased the number of employees in Switzerland by around 38% to a level of 13,500 in 2011. The Novartis site in Basel remains the largest research center in the global network of Novartis. Of the total global investments amounting to USD 8.1 billion in research and development in 2010, 3.4 billion was spent in Switzerland alone. In addition Novartis invested around CHF 250 million in the Rhine Valley plants in 2011. The company is also keeping to investments in the Swiss sites announced earlier and will continue with the development of the Novartis Campus taking into account the economic situation.

The contribution of Novartis to total Swiss exports, which was at over 14% in 2010, shows the importance of the company for the Swiss economy. Altogether, the expenditure of Novartis in Switzerland (including investments) in 2010 amounted to USD 4.7 billion. This corresponds to 26 times the profit achieved by Novartis in Switzerland.

Overall, Novartis firmly believes that the agreements now reached are of great importance not only for the company, but also for Switzerland as a whole. The willingness to engage in constructive cooperation that has been demonstrated by everyone involved will further strengthen Switzerland as an attractive country for both national and international investments.

In view of the growing global competition between centers of industry, Novartis considers it absolutely essential to further strengthen the pharmaceutical industry as one of the country's most important engines of innovation and also affirm it politically. Novartis considers it necessary to work together with politicians and associations on the further development of Switzerland as a modern and competitive knowledge society.

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2010, the Group's continuing operations achieved net sales of USD 50.6 billion, while approximately USD 9.1 billion (USD 8.1 billion excluding impairment and amortization charges) was invested in R&D throughout the Group., Novartis Group companies employ approximately 121,000 full-time-equivalent associates and operate in more than 140 countries around the world. For more information, please visit http://www.novartis.com.

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Novartis Media Relations

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Basel-Stadt

Christoph Brutschin
Tel. +41 61 267 85 41
Regierungsrat, Vorsteher des Departements für Wirtschaft, Soziales und Umwelt

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Vaud

Philippe Leuba
Tel. +41 21 316 41 51
Chef du Département de l'économie du canton de Vaud