One-year Phase III study confirms Ilaris® offers long-term remission in patients with CAPS, a severe lifelong auto-inflammatory disease

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* New Ilaris data in The New England Journal of Medicine show rapid
sustained efficacy in patients with cryopyrin-associated periodic
syndrome (CAPS)[1]

* CAPS is a debilitating genetic disorder with potentially fatal
complications and limited treatments available[1],[2],[3]

* Ilaris selectively blocks interleukin-1ß (IL-1ß), a key driver in
inflammation and tissue destruction - therapy being investigated
for other inflammatory diseases[1],[3],[4]

* Regulatory submissions completed in major countries with priority
review granted in US, Switzerland and Australia

Basel, June 3, 2009 - New results from a one-year Phase III study
have confirmed that the investigational biological therapy Ilaris®
(canakinumab, formerly ACZ885)[*] produced rapid and sustained
remission of symptoms in the majority of children and adults with a
rare and potentially life-threatening auto-inflammatory disease
called cryopyrin-associated periodic syndrome (CAPS)[1],[2],[3].

The study showed that more than 90% of CAPS patients treated with
Ilaris (28 out of 31) remained in remission at the end of the final
four-month phase of the study[1]. This finding supported interim data
from earlier phases showing efficacy in 97-100% of patients[1],[5].
The full results have now been published in The New England Journal
of Medicine[1].

"This study represents an important step forward for the rare disease
community, as canakinumab treats the underlying causes of CAPS rather
than just the symptoms," said Helen J. Lachmann, MD of the UK
National Amyloidosis Centre at the Royal Free and University College
Medical School in London, UK. "In the study, patients experienced a
benefit within hours after receiving a single dose of canakinumab and
only needed further treatment every two months to control their
symptoms. This may give canakinumab a significant advantage over
current therapies in an area of unmet medical need."

CAPS includes a number of lifelong diseases associated with a gene
mutation and characterized by the overproduction of interleukin 1-ß
(IL-1ß), a protein (or cytokine) that has a pivotal role in driving
inflammation and tissue destruction[1],[2],[6],[7]. The clinical
benefits of Ilaris, a fully human monoclonal antibody, are due to its
selective and long-lasting blockade of IL-1ß[1],[6]. By neutralizing
IL-1ß for a sustained period, Ilaris switches off all symptoms of
inflammation in CAPS, as demonstrated in new research published in
The Journal of Experimental Medicine[1],[4],[6].

The success in treating CAPS led Ilaris to be investigated also in
other rare diseases such as systemic juvenile idiopathic arthritis
(SJIA), or more common ones such as some forms of gout, chronic
obstructive pulmonary disorder (COPD), rheumatoid arthritis and type
2 diabetes[4],[6],[8],[9].

The Novartis research and development strategy for Ilaris involves
using proof-of-concept studies which are small-scale Phase I clinical
trials in genetically well-defined diseases to determine how genes
interact in molecular or 'signaling' pathways[10]. The resulting
clinical and biomarker data are then subjected to state-of-the-art
modeling and simulation to yield new insights into the regulation of
IL-1ß in patients[10].

"Ilaris is the outcome of our highly innovative approach to research
and development that is designed to bring more and better targeted
medicines to patients in the shortest possible time," said Trevor
Mundel, MD, Head of Global Development at Novartis Pharma AG. "We are
extremely excited about the efficacy shown by Ilaris in patients with
CAPS, and we hope to be able to extend these benefits to many more
patients with other inflammatory diseases which are more widespread,
and often equally debilitating."

CAPS comprises three syndromes of increasing severity: familial cold
auto-inflammatory syndrome (FCAS), Muckle-Wells syndrome (MWS) and
neonatal-onset multisystem inflammatory disease (NOMID)[1],[2].
Patients with CAPS experience debilitating fatigue, fever and chronic
anemia from infancy[1],[2],[11]. Inflammation can affect the skin,
eyes and bones causing rashes, conjunctivitis and destructive
arthritis[1],[2],[11]. Other severe complications of CAPS include
progressive hearing loss, visual and intellectual impairment, and
amyloidosis, a condition in which the build-up of proteins can cause
vital organs to fail[1],[2],[3],[11]. About 25% of CAPS patients
develop systemic amyloidosis resulting in renal failure, and usually
in death within five to 10 years[3].

The Phase III clinical trial in CAPS was a multinational, randomized,
double-blind and placebo-controlled study designed to assess the
efficacy, safety and tolerability of Ilaris[1]. The 48-week study
involved 35 patients aged nine to 74 years old and was divided into
three parts[1]. First interim results were presented at the American
Rheumatology College meeting in October 2008[5], while full one-year
results are now published for the first time in The New England
Journal of Medicine[1].

In the first part of the study lasting eight weeks, 35 patients
received a single dose of Ilaris (150 mg by subcutaneous injection).
All but one patient (97%) showed a rapid and complete response[1].
After this, 31 patients who maintained their response proceeded to
part two, a randomized 24-week, double-blind placebo-controlled
phase. Patients were treated every eight weeks with either Ilaris or
placebo and if a relapse occurred, they entered part three.

Part two of the study included the primary endpoint, a comparison
between the number of patients treated every eight weeks with Ilaris
who experienced disease relapse or 'flares' vs. those on placebo.
Results showed that no patients in the Ilaris group experienced a
disease flare compared to 13 out 16 patients in the placebo group (0%
vs. 81%, p<0.001)[1].

Following either completion of part two or occurrence of a disease
flare, patients proceeded to part three which involved at least two
further doses of Ilaris for a minimum of 16 weeks. Out of 31 patients
who entered part three, 28 completed this phase of the study without
suffering a relapse (90%)[1]. One patient suffered a relapse on the
last day of the study, i.e. 62 days after receiving their last dose
of Ilaris[1]. In addition, one patient discontinued the study due to
a perceived lack of therapeutic response, and one discontinued
because of a urinary tract infection[1].

Ilaris was generally well tolerated, with no consistent pattern of
adverse events beyond an increase in all suspected infections[1]. Two
patients experienced serious adverse events but there were no deaths
or life-threatening adverse events during the study[1].

Ilaris has orphan drug status in the EU, US, Switzerland and
Australia for the treatment of CAPS and is currently under priority
review by the regulatory authorities in US, Switzerland and
Australia. Regulatory review is also underway in the EU. Orphan drugs
are those designed to treat serious or life-threatening diseases
affecting fewer than 200,000 people (in the US)[12] or fewer than
five out of 10,000 people (in the EU)[13]. Ilaris has also been
granted orphan drug status for SJIA in the EU, Switzerland and in the
US.

Disclaimer
The foregoing release contains forward-looking statements that can be
identified by terminology such as "potentially," "being
investigated," "priority review," "may," "designed to," "hope to," or
similar expressions, or by express or implied discussions regarding
potential future regulatory filings or marketing approvals for Ilaris
or regarding potential future revenues from Ilaris. You should not
place undue reliance on these statements. Such forward-looking
statements reflect the current views of the Company regarding future
events, and involve known and unknown risks, uncertainties and other
factors that may cause actual results with Ilaris to be materially
different from any future results, performance or achievements
expressed or implied by such statements. There can be no guarantee
that Ilaris will be approved for sale in any market, or for any
particular indication. Nor can there be any guarantee that Ilaris
will achieve any levels of revenue in the future. In particular,
management's expectations regarding Ilaris could be affected by,
among other things, unexpected regulatory actions or delays or
government regulation generally; unexpected clinical trial results,
including unexpected new clinical data and unexpected additional
analysis of existing clinical data; 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 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 2008, the
Group's continuing operations achieved net sales of USD 41.5 billion
and net income of USD 8.2 billion. Approximately USD 7.2 billion was
invested in R&D activities throughout the Group. Headquartered in
Basel, Switzerland, Novartis Group companies employ approximately
98,000 full-time-equivalent associates and operate in more than 140
countries around the world. For more information, please visit
http://www.novartis.com.

References
[1] Lachmann HJ, Kone-Paut I, Kuemmerle-Deschner JB et al. A
Randomized Trial of Canakinumab in Cryopyrin-Associated Periodic
Syndrome. NEJM. 2009.
[2] K. L.W Durrant, R. Goldbach-Mansky, H. Hoffman, K.Leslie, B.
Rubin. CAPS Cryopyrin-Associated Periodic Syndromes 2008. Available
at: http://www.nomidalliance.net/Download1.html, last accessed
19.04.09.
[3] National Horizon Scanning Centre. Canakinumab for cryopyrin
associated periodic syndrome. November 2008. Available at:
http://www.pcpoh.bham.ac.uk/publichealth/horizon/outputs/documents/2008/sept-dec/Canakinumab.pdf
Accessed: 21.04.09
[4] Alten R, Gram H, Joosten LA, et al. The human anti-interleukin-1ß
(IL-1ß) monoclonal antibody ACZ885 is effective in joint inflammation
models in mice and in a proof of concept study in rheumatoid
arthritis patients. Arthritis Res Ther 2008;10:R67.
[5] Lachmann HJ, Kone-Paut I, Kümmerle-Deschner J et al. Efficacy and
safety of canakinumab (ACZ885), a fully human anti-interleukin-1ß
antibody, in cryopyrin associated periodic fever syndrome: Results of
a multicenter, randomized, double-blind, phase III study. Poster
presented at the American College of Rheumatology 2008. 24-29
October. San Francisco, USA.
[6] Lachmann HJ, Lowe P, Felix SD et al. In vivo regulation of
interleukin 1 in patients with cryopyrin-associated periodic
syndromes. J. Exp. Med. 2009. Published online April 13 2009.
Available at: www.jem.org/cgi/doi/10.1084/jem.20082481
[7] Joost PH, Drenth MD, Jos W.M. van der Meer. The Inflammasome - A
Linebacker of Innate Defense. NEJM 2006. Vol 355:730-732. Number 7
[8] Church LD, Cook GP, McDermott MF. Primer: inflammasomes and
interleukin 1ß in inflammatory disorders. Nat Clin Pract Rheumatol
2008;4:34-42.
[9] Dinarello C.A. Blocking IL-1 in systemic inflammation. JEM Vol.
201, No. 9, May 2, 2005 1355-1359
[10] Novartis data on file
[11] Kastner DL. Hereditary Periodic Fever Syndromes. Hematology
2005-American Society of Hematology Education Program. 2005:
74-81.Available at:
http://asheducationbook.hematologylibrary.org/cgi/reprint/2005/1/74
[12] Orphan Drug Act. US Food and Drug Administration. Section 526
(2), Line 2.
[13] The orphan drug strategy. Europa: Gateway to the European Union.
Paragraph 1, Line 1.

[*] Tradename Ilaris (spelt: I-L-A-R-I-S) is subject to regulatory
approval.

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