Novartis to Build Latest-Technology Influenza Vaccines Manufacturing Site in North Carolina

Basel, Switzerland (ots/PRNewswire) -

- Novartis Vaccines on track to be the first to manufacture new cell
culture-derived influenza vaccines in the United States
- New site to support pandemic preparedness
- First submission of a cell culture-derived influenza vaccine in the
European Union completed

Novartis announced today plans to build the first cell
culture-derived influenza vaccines manufacturing plant in the United
States at a site in Holly Springs, North Carolina, with construction
expected to begin in 2007.

Novartis also announced today the first European Union submission
of a cell culture-derived influenza vaccine, also commonly referred
to as "flu cell culture influenza vaccines." The submission to the
Committee for Medicinal Products for Human Use (CHMP) was made in
June after the successful completion of Phase III clinical studies.
Novartis is also making additional investments in its Marburg,
Germany, site to expand capacity for flu cell culture vaccines
production in Europe.

Novartis is seeking to become the first to commercially produce
and market flu cell culture vaccines for European markets. US
clinical studies, which began in 2005, are ongoing. The vaccines for
the EU and US clinical trials have been produced at the Novartis site
in Marburg, where the product was developed.

"We are taking the lead in moving flu cell culture vaccine
manufacturing closer to a commercial reality now that the site for a
US manufacturing plant has been chosen and the first EU submission
for a flu cell culture vaccine have been completed," said Dr. Daniel
Vasella, Chairman and CEO of Novartis. "Novartis is pioneering this
innovative vaccine technology to bring reliability and flexibility of
the manufacturing process to a next level and be able to meet the
growing need for seasonal influenza vaccines and to quickly respond
to a potential pandemic influenza threat once the factory has been
completed."

A total investment of approximately USD 600 million, which
includes a recent USD 220 million award from the US Department of
Health and Human Services, is planned to complete the Holly Springs
site.

Once completed and approved for commercial production, the planned
Holly Springs site is expected to annually produce up to 50 million
doses of seasonal trivalent flu vaccines, which will be for use in
the US. In the event of an influenza pandemic, the site is planned to
have a capacity of up to 150 million monovalent doses annually within
six months of a pandemic declaration.

New flu cell culture vaccine manufacturing technology promises
many advantages over traditional egg-based production, including
greater reliability and a reduction in production lead-time. These
advantages could be pivotal in the event of an influenza pandemic. As
flu cell culture vaccines move toward commercialization, egg-based
influenza vaccine production is expected to continue playing a
critical role in reducing the impact of influenza outbreaks and
prepare for a potential influenza pandemic.

About the Novartis Vaccines influenza vaccines pipeline

Cell culture-derived influenza vaccines use modern biotechnology
cell cultures rather than chicken eggs for primary production.
Current egg-based influenza vaccines production requires several
months of logistics for ordering and receiving eggs. This lead time
can hinder the response to unanticipated demands such as the
discovery of pandemic strains, production failures and seasonal
influenza virus strain changes. In contrast, flu cell culture
production enables flexible, faster start-up of vaccine
manufacturing, and does not depend upon the availability of eggs,
providing a particularly important advantage in the event of an
influenza pandemic.

About influenza

Influenza is a contagious, potentially serious respiratory illness
caused by influenza viruses that attack the upper respiratory tract.
It can cause mild to severe illness, and at times can lead to death.
Influenza viruses easily spread from person to person in respiratory
droplets created by coughing and sneezing. Although difficult to
assess, annual influenza epidemics are thought to result in between
three and five million cases of severe illness and between 250,000
and 500,000 deaths annually around the world.

About pandemic influenza

Pandemic influenza occurs when a new influenza virus emerges that
causes serious illness and is easily transmitted among humans. In
this situation, the virus can result in a worldwide outbreak of
disease, or pandemic. Pandemic influenza occurred three times in the
last century. Avian influenza, or "bird flu," does not normally
infect humans, but recent outbreaks of H5N1 avian influenza in Asia
and the Middle East have resulted in more than 200 human cases, with
a mortality rate of more than 50%. Millions of birds have been
destroyed in an effort to contain the virus, which is now considered
endemic in parts of Asia.

Disclaimer

This release contains certain forward-looking statements, relating
to the Novartis Group's business, which can be identified by the use
of forward-looking terminology such as "planned", "promises",
"expected", "seeks", or similar expressions, or by express or implied
discussions regarding potential marketing approvals or future sales
of candidate vaccines. Such statements reflect current views with
respect to future events and are subject to certain risks,
uncertainties and assumptions. There can be no guarantee that vaccine
candidates will be approved for any indications in any market or that
they will reach any particular sales levels or that final approvals
from the state of North Caroline and the city of Holly Springs will
be obtained as expected. In particular, management's expectations
regarding commercialization of cell culture-derived influenza
vaccines and particular vaccine candidates could be affected by,
among other things, additional analysis of clinical data; new
clinical data; unexpected clinical trial results; unexpected
regulatory actions or delays or government regulation generally; the
ability of Novartis to obtain or maintain patent or other proprietary
intellectual property protection; competition in general; increased
government, industry, and general public pricing pressures; and other
risks and factors referred to in Novartis AG's current Form 20-F on
file with the U.S. 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 anticipated, believed, estimated or expected.
Novartis is providing the information in this press release as of
this date and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise.

About Novartis

Novartis Vaccines & Diagnostics is a new division of Novartis
focused on the development of preventive treatments and tools and was
formed following the recent acquisition of Chiron Corporation. The
division has two businesses: Novartis Vaccines and Chiron. Novartis
Vaccines is the world's fifth-largest vaccines manufacturer and
second-largest supplier of flu vaccines in the US. Novartis Vaccines
& Diagnostics' products also include meningococcal, pediatric and
travel vaccines. Chiron, the blood testing and molecular diagnostics
business, is dedicated to preventing the spread of infectious
diseases through the development of novel blood-screening tools that
protect the world's blood supply.

Novartis AG (NYSE: NVS) is a world leader in offering medicines to
protect health, treat disease and improve well-being. Our goal is to
discover, develop and successfully market innovative products to
treat patients, ease suffering and enhance the quality of life.
Novartis is the only company with leadership positions in both
patented and generic pharmaceuticals. We are strengthening our
medicine-based portfolio, which is focused on strategic growth
platforms in innovation-driven pharmaceuticals, high-quality and
low-cost generics, human vaccines and leading self-medication OTC
brands. In 2005, the Group's businesses achieved net sales of USD
32.2 billion and net income of USD 6.1 billion. Approximately USD 4.8
billion was invested in R&D. Headquartered in Basel, Switzerland,
Novartis Group companies employ approximately 97,000 people and
operate in over 140 countries around the world. For more information,
please visit http://www.novartis.com.

Media contacts
Eric Althoff John Gilardi
Novartis Vaccines & Diagnostics Novartis Global Media Relations
Global Communications +41-61-324-3018 (direct)
+1-510-923-6500 +41-79-596-1408 (mobile)
+1-510-387-7604(US Mobile) john.gilardi@novartis.com
+41-79-593 4202 (CH mobile)
eric.althoff@novartis.com

Media materials

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ots Originaltext: Novartis AG
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Contact:
Eric Althoff of Novartis Vaccines & Diagnostics, Global
Communications, +1-510-923-6500, +1-510-387-7604 US Mobile,
+41-79-593 4202 CH mobile, eric.althoff@novartis.com; or John Gilardi
of Novartis Global Media Relations, +41-61-324-3018 direct,
+41-79-596-1408 mobile, john.gilardi@novartis.com