USD 6.1 billion (+92%), of course not taking into account revenues or profits from divested companies.

The Novartis brand has also been successfully established worldwide, ranking among the 50 best global brands according to Business Week. The company also enjoys an excellent reputation: in 2005, Novartis was listed among the world’s 50 most respected companies by the Financial Times and Barron’s, and it also featured in Fortune magazine’s list of the world’s 50 most admired companies. A key point of interest to investors is the total shareholder return (TSR). Taking spin-offs into account, the annual TSR averaged 12.7%, outperforming both the SMI (by 2.1 percentage points) and the MSCI Pharmaceutical Index (by 2.6 percentage points).

I would like to take this opportunity to thank everyone whose efforts and ideas have contributed to the success of Novartis. In particular, I would like to mention Professor Helmut Sihler, Vice Chairman of the Board of Directors and independent Lead Director, who has played a vital role in shaping our company’s success since its creation. As a man of exceptional intelligence and experience, he has influenced our deliberations and decisions with keen business acumen and excellent judgment, without ever neglecting the importance of human relations. Professor Sihler will retire from the Board at the forthcoming Annual General Meeting. In his capacity as independent Lead Director, he will be succeeded by Professor Ulrich Lehner, who will additionally serve, together with Hans- Joerg Rudloff, as Vice Chairman of the Board of Directors.

I am confident that Novartis will remain successful in the future despite any possible setbacks. Sound foundations are provided by our clear strategy – with significant investments in world-class research yielding innovative products and our determination to invest in growth segments of the healthcare sector. The skills, integrity and commitment of our associates, management and Board of Directors can be trusted, giving us the ability to act rapidly, flexibly and with circumspection. Naturally, we also hope for a little luck, which occasionally is needed.

I wish to thank you, our Novartis shareholders, for your loyalty and your confidence in us.

Sincerely,

DANIEL VASELLA, M.D.
Chairman and Chief Executive Officer