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Alcon Division Mike Ball – Division Head and CEO, Alcon Meet Novartis Management | May 24-25, 2016 Disclaimer This presentation contains forward-looking statements that can be identified by terminology such as such as “potential,” “expected,” “will,” “planned,” or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding potential future revenues from any such products; potential shareholder returns or credit ratings; or regarding any potential financial or other impact on Novartis or any of our divisions of the strategic actions announced in January 2016 to focus our divisions, integrate certain functions and leverage our scale; or regarding any potential financial or other impact on Novartis as a result of the creation and operation of NBS; or regarding the potential financial or other impact on Novartis of the transactions with GSK, Lilly or CSL; or regarding potential future sales or earnings of the Novartis Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward looking statements. There can be no guarantee that any new products will be approved for sale in any market, or that any new indications will be approved for any existing products in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such products will achieve any particular revenue levels. Nor can there be any guarantee that Novartis will be able to realize any of the potential strategic benefits, synergies or opportunities as a result of the strategic actions announced in January 2016, the creation and operation of NBS, or the transactions with GSK, Lilly and CSL. Neither can there be any guarantee that Novartis or any of the businesses involved in the transactions will achieve any particular financial results in the future. Neither can there be any guarantee that shareholders will achieve any particular level of shareholder returns. Nor can there be any guarantee that the Group, or any of its divisions, will be commercially successful in the future, or achieve any particular credit rating. In particular, management’s expectations could be affected by, among other things: unexpected regulatory actions or delays or government regulation generally; the potential that the strategic benefits, synergies or opportunities expected from the strategic actions announced in January 2016, the creation and operation of NBS, or the transactions with GSK, Lilly and CSL may not be realized or may take longer to realize than expected; the inherent uncertainties involved in predicting shareholder returns or credit ratings; the uncertainties inherent in research and development, including unexpected clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products which commenced in prior years and continues this year; unexpected safety, quality or manufacturing issues; global trends toward health care cost containment, including ongoing pricing pressures, in particular from increased publicity on pharmaceuticals pricing; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, government investigations and intellectual property disputes; general economic and industry conditions, including uncertainties regarding the effects of the persistently weak economic and financial environment in many countries; uncertainties regarding future global exchange rates, including the continued increases in value of the US dollar, our reporting currency, against a number of currencies; uncertainties regarding future demand for our products; uncertainties involved in the development of new healthcare products; uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; and other risks and factors referred to in Novartis AG’s current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. Executive summary Alcon • Alcon is the global market leader in eye care, with #1 or #2 positions in Surgical and Vision Care in every region around the world • We are accelerating innovation, and starting to see results from our increased focus on devices - Launched PanOptix® and UltraSertTM; ClareonTM on track for planned launches - Closed 3 business development deals in 60 days, including Transcend to penetrate surgical glaucoma category • We are investing behind key growth drivers as well as foundational systems and capabilities - Investing in customer training and education to help shift market to more advanced technologies (e.g., toric IOLs) - Executing promotional programs for key Vision Care brands - Actions underway to improve customer experience and address operational issues • With innovation and investment, together with improved operations, Alcon expected to return to sustainable growth 2 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Agenda Alcon overview and initial impressions Surgical Vision Care 3 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon is the global market leader in eye care, with #1 position in Surgical and #2 in Vision Care Ophthalmology revenue by eye care segment FY 2015, USD billion Surgical Vision Care 3.7 2.6 1.0 2.3 0.9 1 0.6 1 Based on 2014 financials, as Valeant has not yet released FY 2015 results Source: Company filings and Alcon internal estimates 4 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation 1.5 1 1.3 Within the USD 6 billion division, each franchise includes large, profitable businesses Net sales FY 2015, USD billion Surgical Cataract IOLs Contact Lenses 1.1 1.7 0.3 Cataract Equipment Contact 0.6 1.4 Lens Care 0.3 Cataract 0.6 0.1 Refractive & Consumables Other Surgery Vitreo- Other Cataract retinal 5 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Strong equipment base drives pull-through of high margin IOLs and consumables • Further growth expected through executing commercial launches and enhancing physician training Vision care Strong position in contact lenses, which has synergies with lens care business • Further growth expected through DTC investment behind key contact lens brands Alcon has key strengths, but areas for improvement have been identified Key strengths Improvement areas • Clear device focus • Investment in promotional activities • Strong market shares and premium products • Deep customer relationships from 70 year heritage in eye care • Experienced Surgical sales force • Accelerating innovation across Surgical and Vision Care • Growth acceleration plan underway • Passion to win 6 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation to protect and grow market share • Mindset of customer delight • Surgical supply chain and quality • Systems and processes (especially with customers) • Focus on product pipeline • Prioritization New division structure improves focus in areas that are key to sustainable growth Innovation • High frequency, iterative development 7 Customer relationships • Deep relationships with physicians • Enhanced customer experience from end-to-end (e.g. purchase, installation) • Focused R&D investment • Partnership in innovation • Open to innovation from all sources • Education and training | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon growth acceleration plan is underway Accelerate innovation and sales • UltraSertTM and PanOptix® launched in EU and UltraSertTM in US • Transcend Medical agreement • Executing promotional programs in Vision Care Strengthen the customer relationship • Hiring underway for additional customer service roles • Actions underway to improve customer experience • Extensive physician discussions to define future state Improve basic operations • Projects underway to improve Surgical manufacturing agility • Deployed global pricing initiatives across all regions • Further engaging and building confidence with associates 8 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon is progressing against 2016 delivery milestones Milestones From January 27, 2016 investor presentation Focus Full operational transfer of Ophtha Pharma by end Q2 2016 Accelerate innovation and growth: Innovation & Growth • Return IOLs to growth by H2 2016 • Grow consumables throughout the year • Launch ClareonTM IOL platform by 2017 Deliver short-term, incremental innovation milestones Incremental investment in our innovation and growth priorities: Investment • Incremental M&S behind UltraSertTM and PanOptix® launches • DTC behind key Vision Care brands in H1 • Provide training, education and improved services for eye care professionals Financial 9 Alcon (ex. Ophtha Pharma): • Expect difficult H1; exiting Q4 with low to mid-single digit sales growth | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon 2016 top priorities Re-invigorate our external and internal customer experience Establish and bring to life the “new Alcon” device culture Accelerate near-term product flow Think big: Expand markets by placing “bold bets” Successfully execute the Alcon growth acceleration plan 10 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Agenda Alcon overview and initial impressions Surgical Vision Care 11 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Surgical franchise overview FY 2015 net sales USD billion 3.7 Key products Refractive / Other 0.3 Wavelight® LASIK and refractive correction equipment Vitreoretinal 0.6 Constellation® platform, numerous devices and instrumentation Intraocular Lenses (IOLs) 1.1 AcrySof® IQ IOLs, UltraSertTM, PanOptix® Cataract Consumables1 Cataract Equipment 1 Includes 12 Visco-elastics, cutting instruments, custom paks 1.5 0.3 “Other Cataract” | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Centurion®, Infiniti® phaco platforms, LenSx® femtosecond laser Surgical market expected to grow 4% CAGR 2015-20 2015 industry sales1 Market growth drivers USD billion Cataract 6.5 Projected industry CAGR1 2015-20 2015 net sales USD bn Position 3% 2.9 #1 • Strong demographic trends with aging of global population as well as rise of millennials • Higher AT-IOL3 penetration • Improved diagnostics and visualization • Growing access in emerging markets Planned Alcon growth drivers Vitreoretinal 1.3 5% 0.6 #1 Refractive 0.4 2% 0.3 #2 Glaucoma 0.1 28% n/m n/m Total 4%2 1 Source: Alcon internal estimates, Market Scope. CAGR: Compound annual growth rate Includes additional categories (e.g., diagnostics, service) 3 AT-IOL: Advanced technology intraocular lenses, e.g., toric, multifocal 2 13 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation • Strong consumables pull-through on installed base of Centurion® phaco platform • New and planned IOL offerings (pre-loaded, trifocal, new materials) • Higher toric AT-IOL penetration driven by VerionTM and ORA® launches • Vitreoretinal expansion in emerging markets • Market expansion in refractive surgery and surgical glaucoma Alcon’s Cataract Refractive Suite covers every stage of surgical workflow and drives improved outcomes Clinical Plan Surgical Planning 14 Cataract Treatment Femtosecond Laser | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Operate Intra-operative Aberrometry Strong installed base of equipment drives pull-through of high margin IOLs and consumables Quality and breadth of Alcon portfolio drives “one-stop shopping” and is a key differentiator Strong equipment base 15 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation IOLs and consumables pull-through Alcon is advancing and strengthening its IOL pipeline Recent launches UltraSertTM (pre-loaded IOL delivery) Short-term pipeline Next-generation pre-loaded IOL system Long-term pipeline Next-generation IOL platform Accommodating IOL PanOptix® (trifocal IOL) 16 TM Clareon (new material IOL platform) | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Significant progress in innovation with UltraSertTM and PanOptix® launches in multiple regions UltraSertTM pre-loaded IOL PanOptix® trifocal IOL Launched in Europe and US 14 months after project initiation Launched in Europe 11 months after project initiation; no trifocal IOL yet approved in US In some European markets, majority of cataract surgeries are performed with pre-loaded IOLs First hydrophobic acrylic trifocal IOL, providing near, intermediate, and distance vision (best-in-class intermediate vision at 60 cm) Simple to use for surgeon and staff; TensionGlideTM provides smooth lens delivery Future product extension launches: 17 • AcrySof® IQ Toric with UltraSertTM • PanOptix® with UltraSertTM • PanOptix® Toric with UltraSertTM | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Future product extension launches: • PanOptix® with UltraSertTM • PanOptix® Toric with UltraSertTM Beyond ClareonTM, Alcon is developing a next-generation IOL platform with advanced optical properties Working toward best-in-class material, optics and mechanics Targeting consistent and controlled micro-incision delivery of a full-sized optic in an automated, pre-loaded system for ease of use Targeting fully automated IOL manufacturing for better consistency, yield and costs, and for rapid launch of multifocal and toric follow-on products 18 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Collaboration with PowerVision to develop an accommodating IOL Utilizes the body’s natural ciliary muscle movement Targeting full accommodation for all distances (which would eliminate the need for glasses) Targeting contrast sensitivity/visual quality comparable to monofocal IOLs Targeting minimal visual disturbances comparable to monofocal IOLs 19 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation New state-of-the-art diagnostic equipment has potential to drive uptake of toric IOLs Significant hurdle to toric IOL uptake is the need for precise placement – ORATM System with VerifEyeTM Lynk provides that precision AnalyzORTM VerionTM enables development of pre-operative image-guided surgical plan 20 Patient’s surgical plan is transferred to ORATM Cloud | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Surgical plan is synchronized with VerifEyeTM Lynk, which helps refine IOL selection and position to drive AT-IOL penetration Alcon is the market leader in vitreoretinal surgery Global premium segment vitrectomy packs Segment share (%) 100% All other 29% competitors Accurus® (Alcon) Constellation® (Alcon) 30% 41% 2012 32% 19% 49% 2013 31% 30% 13% 9% 57% 2014 61% Constellation® procedures drive pullthrough of high margin sterile single-use consumable packs and devices 2015 Market expansion is being pursued through the development of a low-cost vitreoretinal surgical system tailored for emerging markets Source: Alcon internal estimates, Market Scope 2015 21 State-of-the-art equipment (Constellation®) with ~75% share in developed markets | Meet Novartis Management | May 24-25, 2016 | Investor Presentation First major advance for vitreoretinal surgeons since Alcon introduced Constellation® Breakthrough platform in development for ophthalmic surgical visualization, expected to enhance the surgeon’s ability to perform complex procedures in the back of the eye Expands digital visualization and diagnostic capabilities beyond traditional optical microscope Improves surgeon ergonomics Excellent teaching tool for new surgeons 22 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon introduced a more “personalized” LASIK treatment with ContouraTM Vision FDA approved for topography-guided LASIK treatment for near-sightedness and astigmatism Clinical studies demonstrate 93% of all study eyes achieved UCVA1 of 20/20 or better one year after surgery High patient satisfaction Improved symptoms typically associated with LASIK (e.g., light sensitivity, difficulty driving at night, reading difficulty, glare) Launched in November 2015 in the US 1 UCVA: uncorrected visual acuity 23 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation CyPass® micro-stent to establish Alcon’s presence in surgical glaucoma therapy CyPass® micro-stent – surgical glaucoma device designed to be implanted during cataract surgery Designed to provide continuous control of intraocular pressure May reduce or eliminate the need for glaucoma medications Designed to preserve conjunctival and scleral tissue 24 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Agenda Alcon overview and initial impressions Surgical Vision Care 25 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Vision Care overview FY 2015 net sales USD billion Key brands 2.3 Contact lens care 0.6 Contact Lenses 1.7 26 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Vision Care market expected to grow 3% CAGR 2015-20 2015 industry sales1 Market growth drivers USD billion • Continued trade-up to daily disposable lenses and premium SiHy2 materials • Uptake of toric and multifocal specialty lenses Contact Lenses Lens Care Total 8.3 1.6 • Unmet need in health, vision and comfort Projected industry CAGR1 2015-20 2015 net sales USD bn Position 4% 1.7 #2 -2% 0.6 #1 • Increasing emerging markets penetration Planned Alcon growth drivers • Increased promotion behind best-in-class innovation portfolio – Dailies Total1® water gradient SiHy – Dailies Total1® specialty lenses (multifocal launch planned in 2016) 3% – DACP3 toric and multifocal – AirOptix® Colors • Continued focus on core products performance 1 Source: Alcon internal estimates, Market Scope. CAGR: Compound annual growth rate Silicone hydrogel 3 DACP: Dailies Aqua Comfort Plus® 2 27 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon has a broad contact lens offering Tier TIER 1 TIER 2 TIER 3 28 Daily disposable contact lenses Premium water gradient technology Weekly / monthly contact lenses SmartShieldTM technology; also with color options Blink-activated moisture technology Entry-level daily disposable lens | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Entry-level daily silicon hydrogel lens Dailies Total1® continues to generate strong sales growth Dailies Total1® sales growth % +48% Ramped production to address previous supply constraints Launched in China, Korea, Taiwan, and Singapore in H2 2015; completing global rollout FY 2014 FY 2015 Launching expanded parameters1 in North America, Europe, and Australia Multifocal launch in 2016 1 Expanded 29 parameters (plus powers) include +0.5 to +6.0 diopters | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Dailies Total1® Multifocal on track for H2 2016 launch Core Lower surface silicone content than any daily disposable silicone hydrogel lens Breakthrough combination of industry-leading multifocal design and state-of-the-art water gradient technology Address top unmet needs of presbyopic wearers • Dryness – over 80% water at surface • Discomfort – first and only water gradient multifocal contact lens • Acuity – industry-leading Precision Profile multifocal design 30 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Surface An ultra soft surface gel composed of a hydrophilic polymer network Strong synergies between Contact Lens and Contact Lens Care businesses 1 #1 ranked global power brands #1 #1 #1 1 $0.6bn CLC 2015 FY net sales 2 Synergy opportunities Cross-marketing and cross-development 1 The Clear Care® brand is sold in the US, Canada and Japan; the same product is sold under the AOSept brand in other territories. 31 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation Alcon is exploring additional opportunities for market expansion Penetration of presbyopia market Contact lens market expansion 32 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation “Smart lens” technology has potential to transform eye care TM Strengthens Alcon’s leadership in the development of contact lenses and intraocular lenses, with inclusion of electroactive optics technology “Smart lens” partnership is focused on presbyopia Aimed at seamless switching between distance and near powers, mimicking natural accommodation 33 | Meet Novartis Management | May 24-25, 2016 | Investor Presentation