Novartis Pharmaceuticals Disappointed with Judge's Ruling to Overrule Jury Verdict in Patent Litigation Against Abbott Laboratories

EAST HANOVER, N.J.--()--March 31, 2003--Novartis AG (NYSE: NVS) Novartis Will Appeal Judge's Ruling

Novartis is disappointed to learn of a Delaware judge's decision to overrule the jury verdict in the Neoral(R) (cyclosporine, USP) MODIFIED patent infringement suit against Abbott Laboratories.

The judge ruled that the Abbott Gengraf(R) formulation does not infringe Novartis' patents on microemulsion preconcentrate formulations for cyclosporine. Novartis continues to believe that Abbott's cyclosporine capsule product infringes our patents and will appeal the judge's decision.

The original suit, seeking an injunction to prevent Abbott from infringing upon Novartis patents for Neoral (cyclosporine, USP) MODIFIED and related microemulsion preconcentrate formulations, was filed against Abbott in the United States District Court for the District of Delaware in August 2000. Microemulsion technology was a critical step in the development of Neoral because it allows for more consistent absorption of cyclosporine blood concentrations in organ transplant recipients. At trial, Abbott conceded the validity of the Novartis patents but argued that its cyclosporine product was not equivalent to Neoral and other microemulsion preconcentrate formulations of cyclosporine claimed by the Novartis patents. In July 2002, a jury rejected Abbott's arguments and awarded $5 million in damages to Novartis AG after concluding that Abbott's Gengraf product infringed one of its patents on this technology.

"We believe that Abbott's product employs microemulsion technology invented and patented by Novartis. We are surprised that the judge chose to disregard the jury's verdict and we continue to believe that Abbott has infringed upon our patents and will explore all legal options available to us," said Jim Harold, Vice President Transplant and Immunology Business Unit, Novartis Pharmaceuticals Corporation. "Without patent protection, pharmaceutical companies cannot continue to invest in the development of lifesaving drugs, like Neoral." Mr. Harold also pointed out that, as the Abbott product has already been on the market since 2000, the decision essentially maintains the status quo and will not affect Novartis' sales projections for Neoral.

For more than 20 years, Novartis has been a committed partner to the transplant community providing vital support to increase organ donation, educate patients and clinicians and assist those unable to afford therapy. As a leading contributor to the advancement of transplant science and medicine, Novartis has created a broad pipeline in the field of transplantation, with three compounds in clinical trials and additional products in pre-clinical development. The focus of this extensive research and development effort is to expand available therapeutic options for transplant patients, to improve their quality of life and to enhance the long-term success of transplant therapy.

The foregoing press release contains forward-looking statements which can be identified by terminology such as "continue", "explore", "lifesaving," or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or government regulation generally, the introduction and performance of competitive products for the same or similar indications, government pricing policies, the company's ability to obtain or maintain patent and other proprietary intellectual property protection, and competition in general.

About Novartis

Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2002, the Group's businesses achieved sales of CHF 32.4 billion (USD 20.9 billion) and a net income of CHF 7.3 billion (USD 4.7 billion). The Group invested approximately CHF 4.3 billion (USD 2.8 billion) in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 72 900 people and operate in over 140 countries around the world. For further information, please consult www.novartis.com.

For full prescribing information on Neoral, please visit:

http://www.pharma.us.novartis.com

Contacts

Media:
Novartis Pharmaceuticals Corporation
Kate King, Office: 862/778-5588
Email: Kate.King@pharma.novartis.com
Harry Rohme, Cell: 973/223-7717
Email: harry.rohme@pharma.novartis.com
or
PorterNovelli
Amy Hunter, Office: 212/601-8126
Email: Ahunter@porternovelli.com
or
Investors:
Novartis Corporation
Kamran Tavangar, Office: 212/830-2433

Contacts

Media:
Novartis Pharmaceuticals Corporation
Kate King, Office: 862/778-5588
Email: Kate.King@pharma.novartis.com
Harry Rohme, Cell: 973/223-7717
Email: harry.rohme@pharma.novartis.com
or
PorterNovelli
Amy Hunter, Office: 212/601-8126
Email: Ahunter@porternovelli.com
or
Investors:
Novartis Corporation
Kamran Tavangar, Office: 212/830-2433