Afinitor® shows potential to reverse resistance to Herceptin®[*] in metastatic breast cancer patients, leading to Phase III trial

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* Afinitor (RAD001) combined with Herceptin and chemotherapy in two
separate Phase I trials halted tumor growth in 77% and 62% of
patients, respectively

* Novartis to start Phase III clinical trial program to explore
Afinitor, an oral mTOR inhibitor, as combination treatment with
Herceptin and chemotherapy

Basel, December 12, 2008 - New data from two early clinical studies
show that Afinitor® (everolimus) may overcome resistance to
Herceptin® (trastuzumab)[*] in women with HER2- positive metastatic
breast cancer[1],[2]. These results support the initiation of a Phase
III clinical trial program to fully explore the potential of
Afinitor, also known as RAD001, in breast cancer.

Two Phase I studies were presented today during the CTRC-AACR San
Antonio Breast Cancer Symposium. Initial results from both studies
were released earlier this year at the American Society of Clinical
Oncology (ASCO) annual meeting.

Updated results from the first Phase I trial show that the
combination of Afinitor with Herceptin and weekly Taxol®
(paclitaxel)[**] halted tumor growth in 77% of patients with
HER2-positive metastatic breast cancer with documented resistance to
Herceptin. In addition, the data demonstrated the first complete
response in the trial.

In addition, updated data from the second Phase I study show
promising anticancer activity for Afinitor in combination with
Herceptin and Navelbine® (vinorelbine)[***] in heavily pretreated
Herceptin-resistant patients with HER2-positive metastatic breast
cancer. In the study, Afinitor in combination with Herceptin and
Navelbine halted tumor growth in 62% of patients[2].

"Data presented at this meeting affirm the potential of Afinitor to
reverse Herceptin resistance and restore patient response to
treatment," said Ruth O'Regan, MD, Emory University School of
Medicine, Atlanta, GA. "These findings are important for patients
with HER2-positive metastatic breast cancer who develop resistance to
Herceptin."

Preclinical data have shown that Afinitor, an inhibitor of mTOR, acts
on the pathway that mediates Herceptin resistance and has the
potential to help restore response in these patients. Afinitor works
through direct antitumor activity and through its influence on two of
the most important pathways for breast cancer, the erbB receptor and
the HER2 pathways.

"We are encouraged by the benefit Afinitor provided to advanced
breast cancer patients in these early trials," said Alessandro Riva,
MD, Executive Vice President & Global Head of Development, Novartis
Oncology. "Novartis is committed to further evaluating the potential
of Afinitor in combination with Herceptin as a new treatment regimen
in breast cancer, as well as to studying its role in treating other
tumor types."

Novartis will initiate a worldwide Phase III clinical trial program
to further evaluate the potential of Afinitor in combination with
Herceptin and chemotherapy in patients with HER2-positive metastatic
breast cancer.

Study details: abstract #3119
An open-label, multicenter Phase I dose escalation trial evaluated
daily Afinitor (5 mg, 10 mg) and weekly Afinitor (30 mg, 50 mg and 70
mg) regimens in combination with Taxol (80 mg/m2 IV over 60 min on
days 1, 8 and 15 every 28 days) and Herceptin (2 mg/kg IV over 30
min) in heavily pretreated patients with HER2-positive metastatic
breast cancer with prior resistance to Herceptin [1].

Across treatment arms, there was an overall disease control rate of
77% (complete response/partial response/stable disease >16 weeks).
Twenty-two heavily pretreated patients were evaluable for efficacy:
treatment arms included five patients assigned to Afinitor 5 mg
daily, eight to Afinitor 10 mg daily and nine to Afinitor 30 mg
weekly. Among the five patients evaluated in the 5 mg daily treatment
arm, one patient had a complete response and four patients had
partial responses. In the 10 mg daily treatment arm, one patient had
a partial response, six patients had stable disease and one patient
had progressive disease. Among the nine patients evaluated in the 30
mg weekly treatment arm, three patients had partial responses, five
patients had stable disease and one patient had progressive disease.
The critical dose-limiting toxicities occurring in the first cycle of
treatment included febrile neutropenia, oral mucositis and confusion,
occurring in the 5 mg daily, 10 mg daily and 30 mg weekly treatment
groups, respectively[1]. The most commonly reported grade 3/4 adverse
events (> 10%) suspected of being related to study treatment were
neutropenia, lymphopenia, stomatitis, leukopenia, alopecia and
anemia.

Study details: abstract #406
An open-label, multicenter, Phase I trial evaluated daily Afinitor
(2.5 mg, 5 mg, 10 mg) and weekly Afinitor (20 mg, 30 mg, 50 mg and 70
mg) in combination with Navelbine (25 mg/m2 IV over 10-15 min on days
1 and 8 every 21 days) and Herceptin (2 mg/kg IV over 30 min). All
patients entering the study had progression on, or shortly after,
treatment with Herceptin and all had received prior taxane. The
median number of prior chemotherapy regimens was 3 (range: 1-5)[2].

Across treatment arms, there was an overall disease control rate of
62% (complete response/partial response/stable disease >16 weeks).
Thirty-four heavily pretreated patients were evaluated to date
(fifteen patients assigned to Afinitor 5 mg daily, six to Afinitor 20
mg weekly, and thirteen to Afinitor 30 mg weekly). Among the fifteen
patients in the 5 mg daily treatment arm, one patient had a complete
response, two patients had partial responses, nine patients had
stable disease and three patients had progressive disease. Among the
six patients in the 20 mg weekly treatment arm, one patient had a
partial response, three patients had stable disease and two patients
had progressive disease. Among the thirteen patients evaluated in the
30 mg weekly treatment arm, two patients had partial responses, nine
patients had stable disease and two patients had progressive disease.
The critical dose-limiting toxicities (i.e., dose-limiting toxicities
in cycle 1) occurring in the 5 mg daily treatment group included
grade 3/4 neutropenia, grade 3 stomatitis, grade 3 fatigue and grade
3 anorexia. In the 30 mg weekly treatment group, grade 3/4
neutropenia was the only critical dose-limiting toxicity. There were
no critical dose-limiting toxicities in the 20 mg weekly Afinitor
treatment arm. The most commonly reported grade 3/4 adverse events (>
10%) suspected of being related to study treatment was neutropenia,
stomatitis and leukopenia[2].

About breast cancer
Worldwide, breast cancer is the fifth most common cause of cancer
death. Every year breast cancer causes 548,000 deaths worldwide[3].
The incidence of breast cancer is rising among women in many European
countries, affecting up to one in 16 women[4].

Inside a breast there are many lobes, ducts and vessels that support
several important functions in the body, including reproductive needs
and fighting infection. In breast cancer, some of the cells in the
breast begin growing abnormally and divide more rapidly than healthy
cells. The quick division of cells may cause spreading through the
breast, to the lymph nodes or to other parts of the body.

About Afinitor
Afinitor, an oral once-daily inhibitor of mTOR, is an investigational
drug being studied in multiple tumor types. In cancer cells, Afinitor
provides continuous inhibition of mTOR, a protein that acts as a
central regulator of tumor cell division, cell metabolism and blood
vessel growth.

The safety and efficacy profile of Afinitor has not yet been
established in oncology and there is no guarantee that Afinitor will
become commercially available for oncology indications. The active
ingredient in Afinitor is everolimus, which is available in different
dosage strengths under the trade name Certican® for the prevention of
organ rejection in heart and kidney transplant recipients. Certican
was first approved in the EU in 2003.

In addition to breast cancer, Afinitor is being evaluated as a single
agent or in combination with existing therapies in renal cell
carcinoma, neuroendocrine tumors, lymphoma, gastric, lung and other
cancers, as well as tuberous sclerosis complex.

Disclaimer
The foregoing release contains forward-looking statements that can be
identified by terminology such as "potential," "to start," "to
explore," "may," "to fully explore," "promising," "encouraged,"
"committed," "will," "to further evaluate," or similar expressions,
or by express or implied discussions regarding potential regulatory
filings or marketing approvals for Afinitor or regarding potential
future revenues from Afinitor. You should not place undue reliance on
these statements. Such forward-looking statements reflect the
current views of management regarding future events, and involve
known and unknown risks, uncertainties and other factors that may
cause actual results with Afinitor to be materially different from
any future results, performance or achievements expressed or implied
by such statements. There can be no guarantee that Afinitor will be
approved for sale for any oncology indication in any market. Nor can
there be any guarantee that Afinitor will achieve any particular
levels of revenue in the future. In particular, management's
expectations regarding Afinitor a could be affected by, among other
things, unexpected clinical trial results, including unexpected new
clinical data and unexpected additional analysis of existing clinical
data; unexpected regulatory actions or delays or government
regulation generally; the company's ability to obtain or maintain
patent or other proprietary intellectual property protection;
competition in general; government, industry and general public
pricing pressures; the impact that the foregoing factors could have
on the values attributed to the Novartis Group's assets and
liabilities as recorded in the Group's consolidated balance sheet,
and other risks and factors referred to in Novartis AG's current Form
20-F on file with the US 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 AG provides healthcare solutions that address the evolving
needs of patients and societies. Focused solely on healthcare,
Novartis offers a diversified portfolio to best meet these needs:
innovative medicines, cost-saving generic pharmaceuticals, preventive
vaccines, diagnostic tools and consumer health products. Novartis is
the only company with leading positions in these areas. In 2007, the
Group's continuing operations (excluding divestments in 2007)
achieved net sales of USD 38.1 billion and net income of USD 6.5
billion. Approximately USD 6.4 billion was invested in R&D activities
throughout the Group. Headquartered in Basel, Switzerland, Novartis
Group companies employ approximately 97,000 full-time associates and
operate in over 140 countries around the world. For more information,
please visit http://www.novartis.com.

References
[1] O'Regan, R., et al. RAD001 (everolimus) in Combinations with
Weekly Paclitaxel and Trastuzumab in Patients with
HER-2-Overexpressing Metastatic Breast Cancer with Prior Resistance
to Trastuzumab: A Multicenter Phase I Clinical Trial. Poster
presented at SABCS 2008.
[2] Fasolo, A., et al. Multicenter Phase I Clinical Trial of Daily
and Weekly Everolimus (RAD001) in Combination with Vinorelbine and
Trastuzumab in Patients with HER-2-Overexpressing in Metastatic
Breast Cancer with Prior Resistance to Trastuzumab. Poster presented
at SABCS 2008.
[3] World Health Organization. Media Centre: Cancer Fact Sheet
http://www.who.int/mediacentre/factsheets/fs297/en/
[4] World Health Organization Regional Office for Europe.
Reproductive Health and Research: Breast Cancer
http://www.euro.who.int/reproductivehealth/areas/20071101_6

[*] In the US, Herceptin is a registered trademark of Genentech,
Inc. Internationally, Herceptin is a registered trademark of Roche.
[**] Taxol is a registered trademark of Bristol-Myers Squibb Company.
[***] Navelbine is a registered trademark of Pierre Fabre
Pharmaceuticals Inc.

# # #

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