Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning, good afternoon, ladies and gentlemen, and welcome to the Novartis R&D Day 2021. [Operator Instructions] And the event is being recorded. [Operator Instructions] A recording of the full event will be available on our website shortly after it ends. With that, I would now like to hand over to Samir Shah, Global Head of Investor Relations. Please go ahead.

Thank you very much, and good morning and good afternoon to everybody. A big welcome and thank for taking part in this R&D event from Novartis. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. Just a couple of -- sorry, just a couple of logistic words before we start. There's a Q&A session after each of the sessions, which we've got on today's agenda. And please press star 1 for every session. And you should note that the queue will be refreshed after each session. So please remember that. [Operator Instructions] If we can just have the next slide, please. With us today, we have Vas Narasimhan, who everybody knows is the CEO; Harry Kirsch, the CFO; Marie-France Tschudin, who's the President of Novartis Pharmaceuticals; Susanne Schaffert, President of Novartis Oncology; John Tsai, Global Head of Drug Development and CMO for Novartis. We also have special speakers for today's R&D event. Dave Soergel, who is the Global Head for Cardiovascular, Renal and Metabolism Development Unit. We have Angelika Jahreis, who is the Global Head for Immunology, Hepatology and the Dermatology unit; Norman Putzki, who is the Global Head for Neuroscience Development Unit. Jeff Legos, the Global Head for Oncology Development. Alice Shaw, the Global Head for Oncology -- Translation Clinical Oncology and NIBR. And of course, Jay Bradner, President of the NIBR, Novartis Institutes of Biomedical Research. And with that, I'd like to hand across to Vas.

Terrific. Thank you, Samir, and thank you all for joining us and being part of our Novartis R&D update for 2021. We're excited to provide you an update on our growth story, our strategy and our pipeline where you'll get to hear from our scientists about some of the incredible medicines that we're working on developing to improving the lives of patients around the world. Now let's start with our strategy. If we can move to the next slide. We remain focused and dedicated, and continuing to hone the strategy of the company in a dynamic and changing world. We continue to remain focused as a medicines company. We want to be a leader in technology, a leader in commercialization and access as well as in data science, areas we believe will shape the future of this industry. We continue to think about where we want to play and the focus of the company with respect to therapeutic areas, platforms, geographies and continuing to work to transform Sandoz. We are dedicated to our 5 key priorities and remain convinced that culture, going big on data and digital, having a clear focus on operational excellence and continuing to build trust with society are the how elements for us to succeed in the long term. And we also have defined our aspiration, which is to be a top 3 innovator in our sector, to have consistent above median growth over the long run and the medium term, to be a company that generates attractive returns with high 30s innovative medicines margins but also an attractive return on invested capital, which we're dedicated to improving over the coming years. And lastly, to be a leader on material ESG factors, not only in our sector, but across sectors. Now turning to the next slide. When you look at the actions that we've taken to deliver against the strategy, we made some big moves over the recent years, which have shown our commitment to focusing the company, alongside the exit of the consumer health stake a few years ago and the successful spin of Alcon. This year, we've announced a strategic review of Sandoz, where we'll look at all the different options for that unit as well as the sale of our financial nonstrategic Roche stake in a single bilateral transaction, generating $21 billion of value to Novartis with no tax leakage and IRR of 10.2%. Alongside that, as we've executed on this strategy, you've seen consistent financial performance from the company. Our sales growth in Innovative Medicines over the last 4 years has been 7%, our core operating income growth of 14%, and we've consistently improved our Innovative Medicines margin from 32.4%, now exiting in the last quarter, 9 months to date, 37.1%. And when we go to the next slide, when you look at how we think about capital allocation, we remain disciplined and shareholder-focused and continue to have the 4 core principles around capital allocation. One, to invest in our organic business; two, to grow our annual dividend in CHF. And when you look back over 24 years, we've consistently grown that at 9.8% CAGR in U.S. dollars. Value-creating and selective bolt-on M&A, approximately 10 deals over the last few years with an average deal size of $2 billion. And share buybacks where we return capital to shareholders when we have excess capital available. And when you look at the recent period, we've done $12 billion of share buybacks with the most recent share buyback program of $2.5 billion completed over 4 months earlier this year on the Swiss second line. Now with the recent Roche stake sale, we are evaluating the best approach to fully utilize the capital that we've generated through that sale. And we're going to look at the different options. We're evaluating it from a strategic standpoint, talking to all of our key shareholders to gain their input and listening to their diverse perspectives, and we'll look forward to providing you further updates in the coming months. Now moving to the next slide on Slide 8. When you look at the profile that Novartis presents to investors, we believe it's a unique profile. It's appropriately diversified across 5 key therapeutic areas with selective expansion in 2 additional therapeutic areas with 14 in-market blockbusters, 20 potential significant assets in the pipeline that could be launched by 2026, and limited binary risk with the largest product in our portfolio accounting for about 8% of our sales. At the same time, we build our position in technology platforms, which will drive the future of the sector. And we'll talk more about that later in this presentation. And we're also uniquely geographically diversified with a solid presence in the U.S., a leading presence in Europe and a high-growth presence in China, where we expect to double the scale of our Chinese business from 2020 to 2024. This allows us to have low exposure, relatively speaking, to U.S. drug pricing reform and have a diverse growth base to which to drive the company over the coming period. Now moving to the next slide. When you look at our pipeline, we've been very focused on driving against unmet needs, but also more and more focused on trying to deliver high-value assets. Now you can expect from Novartis, given our diverse therapeutic area base, that we have 70 NMEs, one of the highest in the sector, and continue to generate breakthrough science with 23 FDA breakthrough therapy designations and 85% of our pipeline now with first-in-class or first in indication. When you look at the trailing couple of years, we're #1 in the sector in NME approval. The one area we've been very focused on improving is the value per asset in our pipeline. And when you look between 2017 and 2021, we've increased the value per asset by around 50%. Now looking ahead, our focus is to look at assets with significant potential, early expansion into multiple lines and multiple indications as we've done with some of our recent medicines, rapid transitions as we're currently doing in oncology and early out licensure of nonstrategic assets. And what we believe we will do over time is focus us on the highest value assets that can move the needle for a company of our size. Now moving to the next slide. When you take all of this together, the strategy, the execution, the pipeline, it gives us conviction that we can consistently grow the company over the coming decade and beyond. We expect from 2020 to 2026, at least a 4% sales growth, driven by our in-line brands and upcoming pipeline launches, from 2026 to 2030 above peer median growth given the replacement power that we have and the pipeline that we have in the company. And then over the longer term, beyond 2030, to drive above peer median growth because of the power we have behind the platforms that we're developing. And what I'd like to do now is take each one of these eras in turn. So if we go to the next slide, from 2020 to 2026, the Novartis story is driven by six major brands and then some additional pipeline launches where we believe we can well overcome the patent expiries that we have in the period to drive growth. So if you go to the next slide, there are 6 key brands that we're very focused on driving at the moment. First, Cosentyx, our largest medicine with Q3 annualized sales of $5 billion this year potentially, a peak sales that we've guided to of over $7 billion, a solid growth driven by additional indications and additional presentations that are not fully factored in that peak sales outlook, and a long LoE on the brand at least until 2029 in the U.S. and potentially longer. With Entresto, we have a high-growth cardiovascular medicine that's continuing to perform well around the world with -- particularly being driven by new launches in China and Japan, a peak sales we've guided to of over $5 billion, a base case LoE of 2025, but the potential to extend into the 2030s depending on how the patent landscape evolves for the medicine. With Zolgensma, a medicine that's already a blockbuster, the opportunity to expand further as we think about the intrathecal indication where we're starting a pivotal study or in the midst of starting a pivotal study. And again, an opportunity to drive this medicine into the 2030s given the LoE landscape. And of course, there's additional potential given that it's a gene therapy with complex manufacturing. With Kisqali, the opportunity to create a multibillion-dollar brand. Already, we have 3 OS studies in our favor. We're seeing very strong growth for the brand right now based on those OS studies. And with the adjuvant readout that we'll be talking more about later in the broadcast, an opportunity to drive even further growth. Kesimpta is off to a very strong start. Strong share gains in the U.S. And we believe this can be one of the leading multiple sclerosis medicines in the sector for the next decade. And again, the opportunity to drive this brand into the 2030s. And lastly and importantly, Leqvio, our new medicine for cholesterol lowering, where we've already launched in many parts of the world with a planned launch in the U.S. A multibillion-dollar potential drug with a runway well into the mid and long -- further out into the 2030s. So let's go a little bit deeper into Leqvio, if you go to the next slide. Leqvio's on track with our discussions to date with the U.S. for a launch with -- in January, with an action date January 1. Our U.S. launch preparations are well on track. We have an outstanding launch team focused on 200 prioritized health care systems as well as building capacity in the system for -- through alternative injection sites. In the first part of next year, we'll focus on really building up the capacity in the system. We expect 50% to 55% of patients at baseline to not have any blocks from a payer access standpoint. And that allows us, hopefully, to build a solid base. We'll expect a slow and steady ramp and then an acceleration for this brand over the coming years. Our ex-U.S. launches continue well. We have approval in 50 countries now. And reimbursement reviews in over 10 markets with many markets interested in building off the population health model that we've put in place in the U.K. Now moving to the next slide. Additional key launches will build off of our long heritage in oncology. We recently got approval for Scemblix in CML, a unique medicine with a very different mechanism of action, a STAMP inhibitor. We'll begin in third line setting where we have very strong data versus the current standard of care, with the goal to move into earlier lines of therapy with our Phase III study now initiated in first-line versus choice of TKI. It's important to note there is still significant unmet needs for patients with CML. And then with Lu-PSMA, which we'll be talking about in a bit more detail, the opportunity to bring a next wave RLT medicine to patients with prostate cancer, starting in late lines of therapy and then moving to earlier lines with a range of studies over time. So a lot to be excited about when you think about these launches as well. Now moving to the next slide. The other part of the Novartis story, of course, is thinking about the generic exposure that we have over the coming years. What we endeavor to do in this slide is to take a look at the brands that are coming off patent over this period or potentially coming off patent, depending on how things unfold. And we modeled based on our historical strength at maintaining the sales of our brands over time given our large global presence. We currently estimate our exposure between 2020 to 2026 at around $9 billion, and we believe we have the pipeline to be able to replace that. Now that assumes an Entresto LoE in 2025. There would be further upsides to this, of course, if Entresto were to last longer. And so we'll look forward to keeping you updated. But we think this is an important part of the story to frame so that you can think about our growth drivers and pipeline versus that gap to fill. And when you go to the next slide, you can see when we look at our upcoming period, we believe that gap to fill of $9 billion will be overcome just by our in-market growth of our in-line brands and our base business. Then on top of that, we have the opportunity with Leqvio and additional launches that could come to fruition over this period on a probabilized basis to drive even further growth, giving us the confidence to put forward our plan of at least 4% growth over this period. So also with this, we wanted to highlight once again that our IM core margin in 2020 was 35%, and we continue to expect to be able to reach the high 30s by 2026. And alongside that, we also expect to continue to improve our return on invested capital over this period towards the peer median in the sector or better. Now moving to the next slide. In summary, when you look at this '20 to '26 period, just to frame it, 1.5% growth, if you look at the $9 billion Gx erosion gap, and assuming zero contribution from Leqvio or the Novartis pipeline, a consensus that is in the range of 2.7% to 3%. Our own Novartis expectations with a probabilized pipeline sales that we talked about in this section and an Entresto LoE forecast assumption of 2025 of 4%. And the possibility to go to higher ranges, if we were successful in defending Entresto for a longer period of time, and further delivery in the pipeline beyond what we currently model. So that gives you our story from 2020 to 2026. Now moving to the next slide. When you look at 2026 to 2030, this is the period where we expect our next wave of medicines to really drive the growth of the company. And we're very excited by the number of important medicines we're currently developing in the mid- to late-stage pipeline of Novartis. So going to the next slide. What we try to do here is summarize in a single slide, the late -- mid- to late-stage portfolio of the company. Looking at -- on the one hand, on the x-axis at the strength of evidence based on the data we see in Phase II studies or other confirm -- other signal finding studies that give us confidence in the evidence base. And then on the y-axis, looking at the sales -- unprobablized sales potential of less than $1 billion versus $1 billion or multibillion. And some things to note on this slide. First, a significant number of medicines that are in the high bucket with $1 billion to multibillion-dollar potential, including 6 medicines that are in submission right now. Important number of medicines with moderate evidence and still significant sales potential. And importantly, when you reflect on, of course, all of these medicines will not work. But even if you take industry standard attrition rates, we would expect a significant number of these medicines to succeed and ultimately enable us to drive the growth of the company. It won't all work, and we'll, of course, continue to work rigorously to design the studies and execute them in the best possible way. But this shows you the pipeline potential we have in Novartis to drive that next wave of growth. And when you go to the next slide to dive a little deeper, these are some of the assets you'll be hearing about over the course of today in our key therapeutic areas. Some things to note, 10 assets on this slide with $2 billion-plus unprobablized peak sales potential. We have 7 assets, which are first-in-class in terms of mechanism or the approach they're taking to treating a disease. So a lot of exciting elements here, and we look forward to sharing you -- with you the details over the course of the day. And then moving to the oncology pipeline, it is a similar story on the next slide. We have multiple assets here as well with multibillion dollar potential. And again, a total of 8 assets, which have first-in-class potential. So I think when you look at that on all dimensions, some pretty impressive opportunities we have within the Novartis portfolio. Now moving to the next slide. When you look at the data that we're currently generating to support the momentum of this pipeline, we're consistently putting out releases, we believe, that are enabling us to progress this pipeline. Today, we announced Cosentyx in 2 studies in hidradenitis suppurativa. We'll talk more about that later in Phase III being successful. YTB and PHE are next-generation T-Charge CAR-T cell platform where we expect to be able to move our entire overtime CAR-T therapy efforts. I had positive data, which we presented at ASH, very impressive data, we think, is really standard setting. Our ianalumab data in Sjogren's disease enables us to now move in Phase III. And this is an exciting asset, which we believe we can take into multiple different indications over time, and we'll talk more about that as well in a little bit. So moving to the next slide. Before we turn to 2030, again, we feel confident in that ability in '26 to 2030 to drive above median growth. Then lastly, when you think at 2030 and beyond, we have to imagine a very different world. This industry relies on companies that evolve over time, that see the next pivots in technology and get ahead of those pivots to be able to generate significant medicines against that technology backdrop. When you go to the next slide, external sources continue to model that we would -- we see an explosion of new technologies shaping this industry now and into the future, moving from conventional small molecule therapies and monoclonal antibodies to a whole new wave of advanced technology platforms. For Novartis, we expect that to enable us to drive a shift from the company currently being at about a 30% mix of these biologics and novel technologies to being well over 50% by 2030. And our goal is to invest in the capabilities to lead in that time frame so that we really enter that period being the most successful and most impactful company that can leverage technology to find medicines to move human health. Now going to the next slide. When we think about which platforms we're bringing into the system or deciding to retire, we take a very principled approach. We think about which platform investments have broad applicability, could differentiate us, where we have talent that could be scaled and fit with our disease area strategy. Today, we have 5 major platforms, chemistry and chemical biology including targeted protein degradation, biotherapeutics and xRNA building off our RNA know-how, stem cell progenitor cell therapies such as Kymriah, viral gene therapy and, of course, radioligand therapy. And we apply these technologies in our core therapeutic areas, thinking through, if we find a viable target, which technology would make the most sense to apply against the given target while, at the same time, ensuring we maintain scale in some of the key therapeutic platforms such as RLT cell therapy, et cetera. Now moving to the next slide. I just wanted to take a moment to highlight some of our work and progress we're making, and Jay will speak more about this a little later in the broadcast. First, we are making strong progress within our biologics portfolio to move to a next wave of biologics and xRNA therapeutics. We, of course, have 15 products now in the market that are biologics. And we have 70 projects now in the clinic at one phase or another, looking at novel biologics, including areas like peptide therapeutics, such as LNA or antisense therapy like we do with Pelacarsen. And then in the early-stage portfolio, we have over 50 projects looking at novel technologies, such as antibody drug conjugates, multi-specific and multichain biologics as well as multi-format biologics where we combine RNAs and antibodies to try to direct the RNAs to specific tissue locations beyond the liver. So it's an area that, historically, Novartis was not the strongest but I truly believe and we truly believe that we're emerging to be one of the leaders in developing novel biologic formats. And going to the next slide, when you think about advanced therapy platforms broadly, we now have 70 projects within NIBR across these different areas. And while these technologies are taking longer to mature maybe than we originally thought, we continue to believe each one of these can shape the future of medicine and have a significant impact on the company as well as the patients that we serve. In each one of these areas, we either have a drug approved or approaching the next filing. And we think that will enable us to continue to build momentum. And when you think about it and you go to the next slide, one of the things this enables us to do is build really unique within the industry, a significant manufacturing footprint in advanced technology platforms. You can see in these maps across biologics as well as advanced platforms, we have a broad manufacturing footprint, significant capacity. That allows us to build deep expertise, get close to customers in areas like cell and RLT where customer manufacturing have to be closely linked, deep technical expertise within the organization and also the opportunity to leverage this platform from a manufacturing CMO basis, which we've done over the course of the pandemic, and we'll look to do in the future to supplement our overall Innovative Medicines business. So going to the next slide. In the long run, what we believe in these technology platforms is a combination of our manufacturing scale, our experience in commercialization, our development and regulatory experience we're rapidly accumulating and the depth of the portfolio with over 70 projects will enable us, over time, step by step, to continue to be one of the leaders for the next wave of growth in this sector. Now one other element of the story is clearly data science and digital. And when we go to the next slide, we continue to invest in being one of the leaders in data science and AI and biopharmaceuticals. We wanted to highlight just a few examples. One is our Data42 data science platform, one that's being recognized increasingly across the industry. We have nearly 2,700 trials now in that system from Novartis. We also now are increasingly bringing in real-world evidence as well as data from other partner companies to build what we believe is one of the most complete and diverse repositories of human clinical trial data in the world. This allows us to be faster and hopefully finding new drug targets or new insights as well as faster to driving our clinical study performance. Other examples of areas we're currently looking at to lead in the long term is our AI partnership with Microsoft, our partnership in reaching patients in China with Tencent and then lastly, our partnerships with AWS in the U.S. to really redesign the patient experience in getting their medicines. So in closing, on the next slide, I just want to leave you with 4 key points. First, we have a clear strategy, a strong management team and a conviction to deliver on the strategy of a focused medicines company. Second, we have an attractive growth profile, 4%-plus sales CAGR to 2026 and the ability to grow above peer median beyond. Third, a strong mid-stage portfolio, over 20 assets with significant potential, a conviction to continue to develop large and valuable assets for the company and to further go 2030 and beyond. And the belief that technology platforms will be driving the next wave of growth in this industry and having the conviction and the courage to make strategic investments in those areas to succeed in the long run. So we look forward to taking your questions today, sharing with you our science over the course of the full day. And with that, I'd like to invite my colleagues up and we can start the Q&A. Thank you.

[Operator Instructions] We have the first question coming from the line of Matthew Weston from Crédit Suisse.

Mindful of the first question -- or the one question rule. I'm very intrigued thus in the Slide 25, which shows where you see the technology platforms applying across different areas. And the one that jumps out to me is that xRNA is the one where you see the most opportunity. I'm really interested because as I recall in 2015, you sold that pipeline and -- or sold an element of your pipeline. So what has changed between now and then that's made xRNA so interesting? And what capabilities do you have in-house that means that you are confident that you can exploit that?

Yes. Thanks, Matthew. So the history here, of course, is in 2014, we did have a partnership with Alnylam. And we also had a very capable in-house RNA team that was working diligently. But at the time, the GalNAc conjugation technology had not been fully developed to enable us to bring siRNAs to low doses, target them to specific RNAs within a cell. And so it didn't look like at that moment that the therapeutic index was really there to enable these therapeutics to move forward. Fast forward 18 months after that, of course, colleagues in the sector did solve some of the challenges by being able to bring siRNAs to much lower doses and with much higher specificities. So for Novartis, we continue to have RNA expertise in-house, which we've developed over a decade. And of course, now with our partnership with Alnylam with inclisiran, and really bringing inclisiran to market, we will be arguably -- or certainly, the largest manufacturer of siRNAs in the world in relatively short order. We believe we'll be able to bring that -- we will be able to bring that entire manufacturing footprint in-house. So we'll control end-to-end, the manufacturing. We're going to be continuing to build expertise in technical development and of course, the pilot plant. And then in-house because of that expertise, we already have partnerships that we've made and the ability, we think, to be able to hopefully direct siRNAs beyond the liver to other parts of the body, an opportunity to build a portfolio using our internal capabilities.

Can I just cheat then Vas. You said the in-house RNA manufacturer. Just a quick cheat on Leqvio. You've said you're confident in the January PDUFA. Does that mean that the manufacturing plant in Austria has been inspected and that you're all set to go on manufacturing?

Yes. So Matthew, right now, our conversations with FDA continue on track in terms of all of the various elements, including discussing the label. The FDA has not visited that manufacturing site, and we don't know, of course, if they plan to do that in the coming weeks. But all what we can say is all of the steps to move forward, including the beginning of the label negotiations are currently happening.

We have the next question coming from the line of Graham Parry from Bank of America.

So Vas, on capital allocation, you said you'd seek investor input on uses of capital and referenced diverse investor view. So I'm just wondering what are the range of options that you're intending to discuss with your stakeholders and shareholders? And I'm sure you've already received plenty of feedback already anyway. So what's on balance do you think investors are asking you to do, the capital? And how does that sit with where your thoughts are on what the best uses are?

Yes. Thanks, Graham. Maybe Harry, if you want to start and then I can...

Yes, Graham, thank you for the question. Of course, one of the most asked questions and most debated after our announcement on divesting at a very attractive price to Roche stake, and very -- also very tax efficient. So clearly, we have a wide range of investor feedback. I would say, half really urging us for share buyback of significant size and half urging us to take the time to see if we can find a good business to invest in. So everybody has an opinion. And of course, we take especially from our long-term shareholders all input and that are debating that. So as you know, Vas laid out our priorities. The first two, investing organically and secondly, growing our dividend in Swiss franc is given, if you will. So it's number three, the bolt-on acquisitions and number four, the share buyback that we are debating and we are taking some time to see what opportunities are there. Of course, we have not lowered our financial and strategic criteria for what a good bolt-on M&A acquisition represents and has to also create and -- including significant and highly probable shareholder returns. So -- but it takes a bit of time. And clearly, also share buybacks, I would expect continue to be part of the capital allocation.

And so if I can just follow up on that one. Just the -- when you say bolt-ons, I think in the past, you said that was 5% to market cap or up to about $10 billion. Is that still your definition of bolt-on? Or as we saw with some of your peers, could that go higher?

Yes. As I often mentioned, we don't have exact formula. We did buy the GSK Oncology portfolio for $16 billion. We did some smaller ones, and we had years where we did more. We did less. So of course, we have now more firepower, if you will, including our balance sheet. But the strategy continues to be bolt-on. If they are a little bit bigger, and we think it's the right thing to do, we would do it. We would have done that also before liquidating the Roche stake. So it's unchanged and especially indicating strongly that we are not after large M&A.

Thank you, Harry.

We have the next question coming from the line of Richard Parkes, BNP Paribas.

Just one, obviously. Your targets are obviously implied the consensus. It looks like you're implying the consensus is correctly modeling the pipeline contribution and generic impact. So I'm just assuming that the gap you're flagging to consensus seems to reflect your greater optimism on some of the key assets like Cosentyx in particular, given your recently raised guidance. So just I wonder if that's the correct interpretation of where you feel consensus is underestimating the outlook?

Yes. I think broadly speaking, our -- we have conviction in our in-line growth assets. Certainly, we've guided on Cosentyx and Entresto. We believe that Kesimpta, Kisqali and Leqvio will be significant medicines and that can outperform the current external outlook. We also believe that scientifically Zolgensma intrathecal has the opportunity to deliver and also contribute meaningfully to the plan. And then lastly, we also believe that we can do better than the outlook externally on Lu-PSMA and asciminib. I don't know Susanne, if you want to say a word about these 2 assets.

Yes. Certainly, very excited about it. We are ready to launch now lutetium-PSMA. And I think the true potential is then certainly, we're starting in fourth line, but we have started several trials in earlier lines. And the product is very efficacious and very, very safe. So it should be a very good option also for earlier lines. And therefore, certainly, I don't know if all models have already figured that in.

We'll have our first data from an earlier line study in 2023 already with respect to Lu-PSMA. You want to go, Harry?

Just one comment, I would agree with your rough analysis that the $9 billion gap we showed from, if you will, '20 to '26 of the newly to be expected genericized products, if you will, is also pretty much reflected in consensus. But I think it was important to showcase that because there have been some numbers flying around much bigger, and I think it's important for our investors to, of course, see our confidence in our ability to manage the tail end of our medicines. And so this is very much in line actually with consensus as well as with analogs of how usually we manage our LoEs, if you will.

Thank you, Richard.

We have the next questions coming from the line of Laura Sutcliffe from UBS.

Just on your comments about the way you want to build the business for the long term. Are you really aiming to earn assets that are very much tilted away from exposure to see patent cliff? And if so, should we really expect you to kind of maneuver away from those in terms of any acquisitions, whether they be bolt-on or other way?

Yes, thanks, Laura. Certainly, we want to have -- we believe, I should say, with advanced therapy platforms such as RLT, gene therapy, our new T-Charge platform, it's very complex because the manufacturing and the product are closely interlinked. These are not easily replicable manufacturing processes. There's IP, both related to the target and the drug but also the manufacturing process. So our expectation is that will enable us to have a longer life cycle on these brands. And over time, hopefully have a portion of -- a significant growing portion of Novartis sales, which are less exposed to typical LoE life cycles. Think of it like a device business where there is this base that just continues. And that's very much part of our long-term vision. That said, we will continue to have monoclonal antibodies and small molecules, which would be exposed under the normal cycles that we expect. But if you could imagine a world in '20 -- late 2020s, 2030s where 20%, 30% of our sales now are out of base that can be consistently carried forward for long periods of time, that's meaningful for a company of our size.

The next question comes from the line of Richard Vosser from JPMorgan.

Maybe just following up on that one, on new therapies and healthcare reform. Some elements of U.S. healthcare reform are looking at mandatory price cuts for very expensive drugs in the future after maybe 13 years of patent expiry. Just how do you think of that when you're thinking about these advanced technology platforms with longer life?

Yes. Thanks, Richard. I mean -- of course, the current legislation that's being considered needs to be finalized and ultimately passed. And I think what -- there are many unknowns as to how the final language would look. Our current modeling of our portfolios, we would have very limited exposure under the negotiation parameters of the bill. And we would see the Part D benefit redesign as an overall positive for the sector over the long run and a big -- most importantly, positive for the beneficiaries. And then, of course, the inflation cap will be something that the entire sector will have to adjust to in the early periods. We don't believe this changes the conviction that if you develop medicines that have significant therapeutic benefit. I think the concern is much more if you fall into the categories of Part B and Part D, not necessarily if you develop onetime therapies with significant benefits. So that doesn't change our strategy.

Our next question comes from the line of Kerry Holford from Berenberg.

Question for me on Slide 10. I wonder if you can define a peer group you're referencing here. Would that medium pharma sales going to figure in the 2026, '30 and 2030-plus time frames? Can you detail what those hurdles are that you intend to exceed?

Maybe Harry, do you want to...

Our peer group is large pharma companies. I mean -- so...

16 large...

16 large, you see it also in our comp report, which is pretty much the peer group we benchmark ourself to.

Yes. So it's really those -- those large cap companies. You can find them in the annual report. I mean, I think you can find also externally the various models from IMS on how the sector grows over time. And I think that's something we aspire to be better that, and we think we can be better at given the strength of our portfolio and our pipeline.

And our next question comes from the line of Steve Scala from Cowen.

I'd like to take the other side of an earlier question. So Novartis is now considering how to use the cash from the Roche stock sale. I am surprised that the use of cash wasn't decided before the sale, particularly if no better use is determined. The sale is dilutive to Novartis and if anything, prospects for Roche are improving. So why wasn't use decided beforehand or at least the conversations with shareholders conducted beforehand? And why did Novartis get any additional economics or, say, co-promotion rights from Roche rather than just selling at the market price? Or was that not possible?

Go ahead, Harry.

Yes, yes. Steve, thank you very much. So I think we have to start with that a decision on liquidating an asset has to be separated from the use of the funds received. Ideally, we would have both together. But I think if you always try to optimize both at the same time, it's usually suboptimal, right? It's hard enough to time -- to find a solution at a record historical high price levels, which we have done. This is a onetime transaction, 0 tax leakage and basically add the nonvoting stake. Other solutions would have been much more longer, would have resulted in significant discounts or significant tax leakage. Also this was absolutely tax-free. So we believe this was a fantastic divestment at the right moment. Now of course, ideally, you would have the redeployment already there as a solution, but I think it's also in the best interest of our shareholders that we have decoupled those 2 decisions and that we take a bit of time to figure out what the optimum use is as we go forward.

Thank you, Harry. Was that everything, Steve? Or was there another -- I can't remember, you had a few of the elements there. Maybe that was everything.

We have the next question coming from the line of Peter Welford from Jefferies.

My question follows on, on the 26-plus range, where I understand with regards to the growth on the top line, but I'm wondering more with regards to the margin. Given, obviously, you're going to get to the high 30% level, which I think is pretty competitive given your business mix, but also you're aiming to drive much more of the growth in the future from novel platforms, the division of over half of that. Given the investment in those platforms like the required and probably manufacturing capacity for some of these and also likely potentially royalties and other third-party payments for some of those, should we anticipate that realistically, that operating margin is then sustained at best? Or do you see further upside? And I guess maybe why shouldn't we assume that given the evolving business mix, potentially that, that margin could perhaps be at risk going forward to 2030s?

Yes, thanks, Peter. Harry?

Yes. So the way we see the margin is getting to the high 30s is absolutely doable. And it's not only an aspiration. That's part of our plan. And given the sales growth, our productivity programs, especially on manufacturing and the product mix, we are very confident about the high 30s. And you have seen already first 9 months 37%, last year 35%. So clearly on track to each year, some -- a little bit increase the IM margin, after 2 years of significant increases from the low 30s to the mid-30s. Now beyond the high 30s, I believe strongly is a question of product mix and the technologies we will have then. I tend to believe that usually new technologies, which give us also a bit of protection from competition, if you will, in niche areas, tend to be high margin. But we have to see by the time we get there, because we are also, for example, in cardiovascular, quite broad-based in, let's say, lower-priced specialty areas. But I do believe that the high 30s there, certainly to be maintained. And then as of the middle of the decade, we have to see how our product mix and technologies develop. I think it's also important that we continue to invest strongly into R&D and the appropriate SG&A capabilities. But the high 30s, I'm very confident and also longer term.

Maybe a few points to add, Peter. When you look at technology platforms that we're in, our ability to drive down cost of goods through know-how and expertise is only accelerating. So if you think about Leqvio's launch, we will, as I mentioned, internalize the entire manufacturing and be able to eventually get the cost of goods for this medicine, we hope towards small molecule cost of goods. Given the immense scale, it's still a novel technology like siRNA, that gives us an attractive gross margin. Today, we announced the T-Charge portfolio with YTB and PHE. T-Charge not only has the potential to increase the stemness of cells, which Alice and Jeff will talk more about, but also -- and therefore, higher efficacy, but also brings down the cost of goods significantly and the vein-to-vein or the overall time of delivery significantly. With Zolgensma, we're already making significant progress in the manufacturing. On top of that, the intrathecal is at 1/10 the dose of the IV. So again, factors lower manufacturing cost of goods. And then lastly, with radioligand therapy, we're scaling up our manufacturing. New center, we're building in Indianapolis. All of this together should also enable us to bring those cost of goods down as well. So these technologies will not only be hopefully more protected significant efficacy for patients, but also highly profitable for Novartis.

The next question comes from the line of Keyur Parekh from Goldman Sachs.

Two, please. Vas, if I can start with perhaps a provocative one for you. You're guiding to longer-term growth ahead of industry kind of, and I think most of us think of it, industry being in that 4%, 5%, 6% range. For a company of Novartis' size and investment in R&D, is that an ambitious enough target? Or should you be looking and aiming towards the higher end of your peer group where several companies would be in the high single to low double-digit range? So just wondering kind of how you're balancing kind of being conservative, but also being ambitious. And then secondly, just as a clarification. By when do you expect to be able to deploy the $21 billion you gotten from Roche? I think there's been some commentary suggesting that it will be deployed over the course of 12 months from receipt of this cash. And if that's true, that will either imply multiple $2 billion transactions or a massive stock buyback in 2022?

Yes, I'll take the first one and then Harry can tackle the second one. When we think about growth, we, of course, especially in that time frame, I think first, it's important to think about, of course, the compounding that happens at a company of our size. We are a consistency story given the capabilities we have in the pipeline. And if we could consistently grow, as you know, in that mid-single digit or mid- to high single-digit range, that creates massive value for shareholders when you think about our profitability over time. So I think it's prudent to say, right now, given what we know today, we want to be above the median of our peer group, which rightfully, as you say, historically, that median is in that mid-single-digit 4%, 5%, 6%, and we want to be better than that. If we can do even better, of course, that is our internal aspiration. But I think in terms of guiding the external world, that's a prudent guidance. And already, if you could do that consistently over time, I believe, would be an incredibly valuable proposition to long-term shareholders. And then Harry, on the timing?

Yes. Of course, first of all, we don't have the cash yet. So -- but it's closing soon. As you know, EGM approved it of Roche. So that's over the next days. And then I would agree the 6 to 12 months, not an unreasonable time. Of course, we are not sitting on our hands but also, we don't want to rush things. So we will update you over the next months and then I would expect a 12-month time frame is a good one.

Thank you, Harry.

We have next question coming from Wimal Kapadia from Bernstein.

So Vas, I'm just curious, how are you thinking about novel platforms more broadly. Novartis was the first to launch cell and gene therapies. But if you actually take a step back, I just wanted to get your honest views on the progress you've made since those launches? And I guess what lessons have you learned about being first with certain novel modalities? And how you think that will inform your investment and decisions, particularly around RNA and the degradation platforms?

Yes. Look, I think it's easy to play Monday morning quarterback and look back and say, we would prefer to be second, third in class. I think in general, in these novel areas, you accumulate know-how over time. And that's the reason, for instance, we have the T-Charge platform is that we understood deeply the Kymriah platform. And that enables us, we hope, to win in the long run. Similarly, with Zolgensma, we have the only marketed large-scale gene therapy. We have significant manufacturing capacity. We can leverage that intrathecal, and we hope then into a portfolio. We certainly have learned lessons. We certainly got a lot of things wrong. But along the way, we learned those lessons maybe earlier than our peer set. Now I think looking forward, we would, of course, accept that we can't be everywhere. And I think each new technology that we add in, we have to at least ask ourselves what is the level of investment it can sustain? Or do we have to stop another technology to add yet another? I think we're in the right place at the moment, and we believe we can sustain the platforms that we have. Targeted protein degradation, we believe we're one of the leaders in the sector. Jay will talk more about that. And that is harnessing our small molecule capacity that Novartis has had for generations. So we don't view that as a challenging space for us from a technical standpoint. And then we'll see how the world evolves, and we'll keep learning and adapting as we go. But I don't think we'll shy away from -- if we see something that we believe could truly shape the industry in the long term, we, of course, would have to seriously look at it as always. And I think -- okay, there's one last question, so I'm being asked to take the last question.

We have the next question coming from Seamus Fernandez from Guggenheim.

So I guess, Vas, as you kind of think about the broad array of claims that are being made with regard to speed to IND, novel developments. I guess the one concern that we have is with regard to target crowding or chasing that we're starting to see across the industry. So we're seeing more technologies basically go after what seems to be an increasingly limited number of potential targets. How do you sort of respond to that? And how important is it to be sort of first-in-class and really breaking new ground because it seems like the technologies that you're bringing forward are kind of taking that type of an approach? So just love to kind of get your high-level thoughts there.

Yes, I think there is a challenge that we have to acknowledge that if you do disclose a novel target, the time you have now to get -- to prosecute that target and get it to market is likely shorter than it was in the past. Nonetheless, we continue to believe that target discovery is, and identifying the target and the appropriate disease, is fundamental to the long-term value creation in the sector. We are, of course, being much more thoughtful in how we disclose information on our targets. So you'll note that in our research presentations, we disclose fewer and fewer details. We want to get further along. We also believe that it's not always straightforward even within small molecules and biologics to figure out the right disease against the target, you see that in our portfolio. And then our last belief is that in these areas that we have nascent areas that are relatively small part of the company today. But in these areas, they're hard to replicate the full value chain, if you want to create a radioligand or you want to create a novel cell therapy. So those are areas, of course, we think about. But I think the problem you raise is an important one, and we have to get faster as a company. So I think with that, we'll hand it over to Dave Soergel, who will lead us through the cardiorenal metabolic. Thank you again for joining us today.

Good afternoon, good morning, everybody. It's a pleasure to be here to talk about the Cardiovascular Renal Metabolism portfolio. There's a lot of exciting things going on in our pipeline and I'm very excited to talk about these things. If we go to Slide 33, please. Next slide. In the Cardiovascular Renal Metabolism group, our focus is to deliver innovative medicines to patients who can benefit from them and really, fundamentally, alter the current standard of care. What we have today to present to you are 3 medicines that really fit into that category: Leqvio, pelacarsen and iptacopan. And what you'll see about all of these medicines, I expect, is that they can fundamentally improve and extend patients' lives. But also, I think what I'd like you to take away from this presentation is that we have an agile way of looking at opportunities within the CRM pipeline. And we can find medicines that can serve tens of millions of people or we can also find medicines that serve tens of thousands of people. In both cases, these medicines are compelling from a patient impact standpoint and deliver value to the individual and to the practitioner. Let's go to the next slide, please. So let's start with Leqvio. Leqvio is the first and only small interfering RNA LDL-cholesterol-lowering agent out there. So why is this important? Why do we need a new cholesterol-lowering agent? Well, there are 135 million people worldwide who live with atherosclerotic cardiovascular disease. And surprisingly, despite existing therapies that lower LDL-cholesterol effectively, only about 20% of patients can get their LDL cholesterol within the target range that they're expected to get to. Why is having a low LDL important? LDL cholesterol is directly linked to heart attacks and strokes, bad cardiovascular outcomes. The lower you can get your LDL cholesterol, the less likely you are to have a heart attack and a stroke and the better your cardiovascular health will be. This is where Leqvio comes in. Leqvio has a unique profile that offers both strong LDL-lowering activity and a sustained effect with only twice a year dosing. So it takes a lot of the burden away from the patient and will allow them to get to these targets much more effectively. We're very excited about this medicine, and we're fully committed to making a big difference in atherosclerotic cardiovascular disease, as you'll see in this presentation. And we -- our intention is to get this medicine to as many patients who can be beneficially affected by it as possible. Let's go to Slide 36, please. So this is a slide, a version of which I show every time I do this presentation. Cardiovascular disease remains the #1 killer globally. It kills 1 in 3 individuals across the planet, which means that pretty much everybody on this call knows somebody or is themselves affected by cardiovascular disease. This is a huge problem with respect to personal impact and public health impact. If you look on the right-hand part of the slide, you see it also poses a huge financial problem for healthcare systems. By 2025, we expect cardiovascular disease to cost $1 trillion globally because of recurrent heart attacks, strokes, cardiovascular death and lost productivity. Slide 37, please. The good news is that we can do something about this. So for the last 50 years, we found that lowering your LDL cholesterol can improve your cardiovascular health and prevent you from having heart attacks and strokes. As you see on this graph on the left-hand part of the slide, the lower you can get your LDL cholesterol on the x-axis, the better your cardiovascular outcomes are on the y-axis. And the longer you can keep your LDL-cholesterol low, the even better your outcomes will be. What we also show you on this slide is an important consideration when you think about a chronic therapy for something like LDL cholesterol, which is the patient burden of having to take a medicine every day or inject themselves with a medicine. The fact of the matter is that this patient burden can impact on how well the medicine works in the real world. And this is what we see that with statins, where you have to remember to take a medicine every single day, over 365 days a year, it's much more challenging to get your LDL cholesterol in line to lower your cardiovascular risk. Slide 38, please. So as I mentioned, LDL cholesterol is directly linked to cardiovascular outcomes. International guidelines recognize this. The reason why there are very specific goals for LDL cholesterol lowering in international guidelines is because lowering your LDL cholesterol improves your outcome. So as you can see, over time, our targets for lowering LDL cholesterol have gotten more and more aggressive. And this recognizes the fact that there's no lower limit to the benefit. In other words, the lower you can get your LDL cholesterol, the better your cardiovascular health will be. The lower, the better when it comes to LDL cholesterol. Next slide, please. So this is where Leqvio can help. As I mentioned, it has a unique profile. Twice a year administration can substantially and sustainably lower your LDL cholesterol by up to 52%. So this is a dramatic opportunity for individuals to really take control of their cholesterol and get within those targets and protect their cardiovascular health. Next slide, please. Next slide, please. So as you can see, and as Vas mentioned in the initial part, inclisiran is now approved in 50 countries, and we expect the U.S. PDUFA date, January 1, 2022. The review is ongoing in the U.S. And ex-U.S., as it says here, we've had ongoing regulatory reviews in more than 20 countries as well. Slide 43, please. So one of the most important things we have to do is establish an evidence base to show that Leqvio is important for patient health and for patient outcomes. We believe firmly that in order to establish leadership in atherosclerotic cardiovascular disease, you have to lead with the science. And so what you see here is a strong commitment to leading with the science. Three cardiovascular outcome studies that we are planning to shape how cardiovascular medicine is practiced in the future and shape the practice of medicine around atherosclerotic cardiovascular disease and reducing LDL cholesterol. The reason why these are -- these studies are important is not just because of the primary endpoint, but because of all the additional analyses that will inform the science of medicine in the future with respect to ASCVD. Slide 44, please. So now we're going to go from a well-established modifiable cardiovascular risk factor, LDL cholesterol to a genetically determined cardiovascular risk factor that's currently unmodifiable which is lipoprotein(a). And we're going to talk about pelacarsen, which is an antisense oligonucleotide that reduces lipoprotein(a) unlike any other therapy out there right now. Next slide, please. Lipoprotein(a) is an independent risk factor for atherosclerotic cardiovascular disease. And currently, there are no treatments. So you can exercise, you can eat well, you can take statins. None of those things are going to improve your Lp(a). You inherit your Lp(a) and your cardiovascular risk as a consequence of it. Lp(a) looks a lot like an LDL particle, except it has an extra piece called apolipoprotein(a), which is atherogenic and thrombogenic which increases cardiovascular risk. Next slide, please. Elevated Lp(a) is not rare. About 1 in 5 individuals across the globe are afflicted by elevated Lp(a), which equates to about 1.4 billion people. So if you think back to the numbers that I mentioned with respect to Leqvio, about 135 million people have atherosclerotic cardiovascular disease globally, and about 20% of those individuals have elevated Lp(a) as well. So that's about 25 million people globally. So this is a big problem. It's the most common monogenic cardiovascular disease risk factor that we know of. Can we go to next slide, please. So what's the evidence that elevated lipoprotein(a) increases cardiovascular risk? So I'm showing you two pieces of evidence here, both based on epidemiologic studies. On the left-hand part of the slide, we show you that there's a dose-related increase. In other words, as you increase your lipoprotein(a), you have a higher risk of coronary heart disease, as you can see on the y-axis. And this is from a very large epidemiologic study conducted in over 100,000 individuals. On the right-hand panel of this slide, you see also an epidemiologic study, combination of 3 trials from Denmark, which show you similarly an elevated risk as you increase lipoprotein(a). We believe the most important patient population to approach with elevated Lp(a) are individuals with Lp(a) greater than 70 milligrams per deciliter. So as you can see, that puts these individuals at a risk that's about 50% or greater or higher compared to the baseline risk of Lp(a). Next slide, please. So if you look at the distribution of lipoprotein(a) concentrations in the population we show you in this histogram, and you see Lp(a) mass on the x-axis. You can see as you increase Lp(a), the proportion of patients become smaller and smaller. However, these are the individuals who are at the highest risk. So as I pointed out, the individuals with Lp(a) greater than 70 milligrams per deciliter are at the highest risk. And yet, there's not anything that these patients can do to modulate their cardiovascular risk now. Even something as invasive as apheresis doesn't reliably reduce Lp(a) and puts you into a low-risk subgroup. Next slide, please. So what we've seen from pelacarsen from the Phase IIb study is in patients with elevated Lp(a), pelacarsen can dramatically reduce those lipoprotein(a) levels by up to 80%. So what does that mean? That means that we can take people who have a high -- very high Lp(a) of about 100 milligrams per deciliter and bring them all the way down to 20, which puts them into the lower risk category. So this is an opportunity to take that big cardiovascular risk burden that those people are carrying around in the -- as high Lp(a), reduce it and hopefully get them better cardiovascular outcomes. Next slide, please. So we're studying pelacarsen currently in the HORIZON cardiovascular outcome study, where we're comparing pelacarsen 80 milligrams a month to placebo. And as you can see, we optimized cardiovascular risk factors like LDL cholesterol in this patient population before we randomize them so we can truly test the hypothesis. As I mentioned earlier, we're focusing on that highest risk population of individuals with Lp(a) of greater than or equal to 70 milligrams per deciliter. And we're also in the primary analysis testing a subgroup of individuals with even higher Lp(a) of greater than 90 milligrams per deciliter. We expect Horizon to read out in 2025. And at that time, finally, these patients with elevated Lp(a) and high cardiovascular risk will have an alternative for treatment. Next slide, please. So I put this here because I always like to end a presentation about pelacarsen and Lp(a) to indicate that even though there's no therapy currently for high Lp(a), there are other things that you can do. And guidelines are currently recognizing that it's a good idea to test for LP(a) now so that we can manage cardiovascular risk factors other than Lp(a) more effectively. And of course, the more people that are tested now when pelacarsen becomes available, then they'll have an alternative that will actually be able to more effectively manage their cardiovascular risk. Next slide, please. So now we're going to completely shift gears and we're going to go from indications like ASCVD, which are in the 100 million individuals -- afflict hundreds of millions of individuals and talk about iptacopan, which was -- is an exciting oral first-in-class agent that inhibits complement Factor B targeting the alternative complement pathway. Iptacopan is a potentially game-changing medicine for patients with rare renal and hematologic disorders. By inhibiting the alternative complement pathway, it targets the fundamental pathophysiology of many of these complement-driven diseases and, therefore, could provide a great treatment option for these patients. What we've seen from iptacopan so far in the Phase II studies has been really compelling. We've seen that iptacopan is well tolerated and has a stellar results in a variety of Phase II trials. Next slide, please. So iptacopan is truly a pipeline in a pill. And when you think about all of the potential complement-mediated indications, you can see that there's quite a long list. Right now, we're in the process of embarking on 4 Phase III trials. We started one in IgA nephropathy, started one in C3 glomerulopathy, in PNH and embarking on one in atypical hemolytic uremic syndrome as well. In addition, we have additional -- we have indications in the Phase II realm that are also very compelling with respect to the value that they could bring to patients. Next slide, please. So we're going to start by talking about PNH. PNH is a rare hemolytic disease called paroxysmal nocturnal hemoglobinuria. And Iptacopan has the opportunity to be the first line and an oral option for these patients who currently don't have an oral therapy option. What's interesting about PNH is that despite the availability of current therapies, is that many patients remain anemic and have a need for additional therapy. So as you can see from this graph, about 40% of patients remain anemic and 20% of patients remain transfusion-dependent, which indicates that the current therapy is not really doing enough for these patients to improve their quality of life. Iptacopan, because it addresses extravascular hemolysis in addition to intravascular hemolysis, may deliver something really important to these patients. So let's look at the next slide, and you'll see the Phase II data. So from -- in Phase II, what we saw with iptacopan is that we could rapidly and durably increase hemoglobin and reduce hemolysis. So as you can see on the left-hand part of the slide, patients rapidly increased their hemoglobin concentration and hemolysis declined rapidly. What we saw also from earlier trials that we had done is that patients who had been on eculizumab but had not adequately responded to it, did respond to iptacopan with similar results with a decrease in hemolysis. Next slide, please. So we're studying iptacopan in the APPLY-PNH trial now, comparing iptacopan to anti-C5 antibody standard of care. And it's powering to show superiority versus the standard of care anti-C5 agents. The primary readout for this trial is expected in the second half of 2022. Next slide. The next disease that we're approaching with iptacopan is C3 glomerulopathy, which is a rare renal disease that afflicts young, mostly adolescent patients. And the fundamental pathophysiology involves the alternative complement pathway and deposition of C3 particles in the glomerulus causing inflammation and renal damage and proteinuria and eventually leading to transplant and dialysis. In this disease, iptacopan has the potential to be disease-modifying because it targets the fundamental pathophysiology of the alternative complement pathway. Next slide, please. As you can see in Phase II, we had compelling data showing a reduction in proteinuria by about 45%. And in transplanted kidneys, we saw that C3 protein deposition was reduced as well. Next slide, please. We're studying iptacopan in C3G in the APPEAR-C3G Phase III trial, where we randomized iptacopan versus placebo for 6 months. And as you can see, the primary analysis will be proteinuria reduction comparing iptacopan versus placebo. Next slide, please. Lastly, IgA nephropathy is a huge unmet medical need. It's the most common primary glomerulonephritis and causes renal failure in many young individuals. The epidemiology has shown us the proteinuria reduction is directly linked to sparing renal function. And so if you can reduce proteinuria with iptacopan, you'll be able to prolong renal survival and improve renal outcomes. What we've seen in biopsies in patients with the IgA nephropathy is that fragments of the alternative complement pathway are largely present there, suggesting that medicine like iptacopan, which targets the alternative pathway, could be an effective therapy. And indeed, next slide, please, what we saw from our -- what we're studying in our Phase III study is looking at iptacopan versus placebo evaluating iptacopan's effect on proteinuria reduction and then following patients to show that their GFR -- that their renal function is maintained over time. So that's a whirlwind tour of the cardiorenal metabolic mid-stage pipeline. I hope what you take away from this is that while the current landscape, there's a lot of work to do, I think the horizon is very bright in the future. So thank you very much, and thanks for your attention.

Operator?

[Operator Instructions]

Great. [Operator Instructions]

We have the first question coming from Emmanuel Papadakis from Deutsche Bank.

Maybe I'll kick it off on iptacopan and just the competitive landscape in IgA, and we've seen a couple of molecules appear recently, and it might be on the market for something specifically [indiscernible]. So very interested to hear your perspective on clinical differentiation relative to those molecules? And latest thoughts or comments as regards the FDA's willingness to accept proteinuria 9-month endpoint as the basis for an interim [indiscernible]? And it looks like that's now not due until 2023? Or is that still possible later in '22?

Thanks for the question. Yes, I mean, I'll answer the second part of your question first, which is that proteinuria reduction in 9 months is a recognized endpoint for conditional approval by regulatory authorities. And that's because, as I showed during the presentation, there is a very strong link between proteinuria reduction and protection of renal function. So that's been recognized. What the agency does require is that you continue to follow patients and confirm the effect on GFR over the longer time frame. So that's why there's an initial interim analysis where that conditional approval would be sought, and then we'd follow the patients through to the end. With respect to the landscape, indeed, I mean, it's a good thing for patients, right? So there's been decades of no innovation in renal diseases and now we're seeing quite a bit, which is great. I think what really distinguishes iptacopan in this field is that it targets the fundamental pathophysiology involved with IgA nephropathy and renal damage. So it targets the inflammatory component rather than the hemodynamic component, which is what you see with the ACEs and ARBs and other hemodynamically affected agents. So no pun intended, it's a bit of a complementary agent in IgA nephropathy versus the other agents that are out there.

And I think just to add to that, Dave, what's unique about iptacopan is it's an oral molecule. And I think that really differentiates from subcu treatments that are out there because patients can take this at home and it targets the alternative complement pathway. So it leaves the lectin and classical pathways intact. So having an oral molecule, I've seen a lot of physicians who -- and patients who are really wanting to actually move forward for IgA nephropathy.

Our next questions come from the line of Simon Baker from Redburn.

One on Leqvio, if I may. You highlighted that you have a number of large and long outcome studies ongoing. And you also reminded us that the case for lower cholesterol has been made very robustly over decades. So now that you have approval in 50 countries, I wonder if you could give us a flavor of how essential in different parts of the world that data is? It clearly hasn't prevented the U.K. deal being done. We're not waiting for the outcome of those studies. So I wonder if you could just give us a flavor of other markets and the significance of those studies in determining the initial uptake of Leqvio?

Yes. I think -- thanks for the question. I think I'll focus more on the medical need and the science rather than the market uptake because, I mean, I can speak more expertly to that. The fact of the matter is most practitioners that you talk to today are very comfortable with the link between LDL cholesterol lowering and cardiovascular outcomes. As I said, we're committed to being the leader in atherosclerotic cardiovascular disease management. And in order to do that, we really want to expand and explore and push forward the boundaries of the management of patients with ASCVD. In order to do that, the best way to do it is to generate data. And that's really what those trials do. So yes, we will confirm that LDL lowering improves cardiovascular outcomes in ORION-4 and V2P and ORION-17. But at the end of the day, I think the aggregate of that data is really going to be the fruit of thousands of publications over the next 10 or 15 years.

And maybe just to add to that, Dave. I think as we look at ORION-4, which is being conducted in the U.K. and the U.S., what we'll be able to see in V2P is another large population or study in terms of secondary prevention outside of those geographies because what we do know is that there are different practice patterns in terms of treating LDL. So outside of the U.K. and in the U.S., there have been questions around, well, how is that practice and how does that actually impact our specific region? And that's exactly the point of V2P of what we're looking at. And I think having the two together, in fact, will allow us to have really a rich database to be able to address what happens with LDL across the population and specifically for inclisiran.

We have the next question coming from the line of Richard Vosser from JPMorgan.

Relatively simple one. I think pelacarsen, the readout has been delayed to 2025. So just thoughts on the reason for that. Is it slow recruitment, physician brought into this? Just some thoughts there.

Well, yes, I mean the pandemic, I think, has affected a lot of trials across the industry, and HORIZON was no exception to that. The fact of the matter is though we're back up on track and we're recruiting very well. So we had a pretty minimal delay in terms of the recruitment time line. I think that at the end of the day, the most important thing to consider is that this will be the first therapy for patients with elevated Lp(a) right now there -- who have no therapies or ways to be able to modulate their cardiovascular risk. So those data, we're acting with urgency. We see the patients on the other end of this and absolutely are doing our best to get this medicine to them as quickly as we can.

We have the next question coming from the line of Laura Sutcliffe from UBS.

Back to iptacopan, if we can. Thinking about the competition you might have specifically in the proximal complement inhibition space. Do you have a view on whether inhibiting Factor B has any advantage over inhibiting Factor D?

Yes, great question. I mean, from what we've -- I mean, obviously, what will matter will be the data and actually being able to see the efficacy of the two compounds. I think based theoretically, if you look at the complement pathway and the counter regulatory processes, there are different ways in which Factor B and Factor D are regulated. But if you just look at them pharmacologically on a picture of the complement path like we had in our slides, there isn't any reason to believe that they would be different pharmacologically. What I will say is that, again, one of the strengths of iptacopan are 2. The first is -- it's 3 actually. So it's that it's orally available, it's well tolerated, and we have an extremely broad development program where we're going very aggressively, very broadly into a variety of indications to try to bring this medicine to as many patients as possible.

Yes, in that slide that you showed, Dave, we had 4 Phase III studies already in place and then 4 Phase II that are already in place or have initiated. So as we see additional opportunities, we'll fully explore the LCM, life cycle management, for iptacopan.

We have the next question coming from the line of Wimal Kapadia from Bernstein.

Great. Can I just go back to pelacarsen, please, a very interesting asset. But my question is more about where the drug would be used in the treatment paradigm? I know you mentioned high risk, but it feels like early setting and in combination just given there's nothing else that targets Lp(a). Just curious to hear your thoughts there. And then just tied to that, are we actually seeing any human data for any drug that has demonstrated explicitly that the reduction in CVD driven by lowering of Lp(a)?

Yes. It's a great question. So I think if you look at the sub analysis from FOURIER and ODYSSEY, I think they've tried to be able to tease out some sort of -- some effect of the PCSK9 monoclonals on Lp(a) and improving cardiovascular outcomes. Unfortunately, the sample sizes are too small, and they don't have enough patients in those highest quartile subgroups, which are, as I mentioned during my talk are the most important. So individuals with Lp(a) greater than equal to 70 milligrams per deciliter. So as far as I'm aware, the data are not particularly strong on pharmacologic lowering. I mean, that's what it means to be first in class. I mean, at the end of the day, we -- our obligation is to prove that this medicine is an important medicine for patients and can improve cardiovascular risk, and that's why we've embarked on the outcomes trial.

Yes. Maybe just to add a little bit to that. What we've seen from the PCSK9s is reductions in Lp(a) maybe up to 16% or 17%. Apheresis will get you maybe to 30%. But what we've seen with pelacarsen is about an 80% reduction overall. So as we try to reduce these Lp(a), and 1/5 of the patients that are greater than 70, we actually need to bring that down. And I think the first part of your question was around which population of patients would actually need this? Well, we said it was an independent risk factor. So bringing down LDL may not be enough. And so we probably will need to bring down Lp(a) and this is the reason why we're conducting outcomes trial. So currently, what we've seen in epidemiology is that patients with elevated Lp(a) have higher cardiovascular risk. And so that would actually protend that you would, in fact, would need to bring them down to reduce that risk. And once we get the results from our studies, I think we'll certainly be able to say with certainty that this would be able to reduce the risk for patients.

We have the next question coming from the line of Graham Parry from Bank of America.

Okay. And this is almost more a question for Vas and Harry, but I'm wondering when you think Leqvio will be able to return above its cost of capital when you take into consideration acquisition costs of the medicines company, 70,000 patients in clinical trials, setting up the alternative investment -- injection centers, and then only around potentially 10 years of patent life post outcomes data in 2024. So is this going to be returning just high level at the end of its patent life? Or are you sort of banking on there being manufacturing know-how to extend that exclusivity beyond those patent days?

Yes. I'm looking at, Harry, but I can't read sign language very well. So maybe what I'll do is I'll ask Samir to come back to you with that response. But I think the approach to that, Graham, as we think about this, is really looking at population-based approach and it's not a traditional approach that we're looking at. So as we move forward, this is a very different approach in terms of treatment for patients with LDL and we're hoping to actually get a big population in terms of getting on reduction for LDL and serving a really large population of patients.

We have the next question from Seamus Fernandez from Guggenheim.

Great. Thanks for the question. So really, I just wanted to move to thoughts around other potential targets and how Novartis is approaching triglyceride specifically. I believe there's a lot of programs out there, ApoCIII as well as other ANGPTL3 type target. So what are Novartis' thoughts around those approaches? And if RNAi is the right way to get after them?

Yes. I mean, I can speak in general terms about triglycerides and its interrelationship with cardiovascular risk. I mean, I think the -- there is a strong body of evidence that, that indicates the triglycerides pose a risk to patients moving forward. Triglycerides are one of those highly modifiable risk factors though in many patients. So for example, diet, exercise, healthier living, those kinds of things can substantially improve your triglyceride level. And I think that the real question is in the treatment paradigm for lowering your triglycerides, the first step is to improve your LDL by the way. So the first line of therapy is always going to be statins to lower your LDL cholesterol as much as you possibly can because that's LDL cholesterol is the clear proven modifiable risk factor that's directly linked to cardiovascular outcomes, triglycerides less so. As you said, we've seen some data from some agents that show some beneficial effects. But interestingly, there doesn't seem to be a strong relationship between triglyceride lowering and the cardiovascular benefit that you see in those trials.

Great. Thanks, Dave. And I think those are all the questions that we have time for, for the cardiovascular renal metabolism section. So we'll take a break now and come back at 10 till. So I think we have a 20-minute break, and we'll be back and hopefully refill your coffees and see you in about 20 minutes. [Break]

Thank you. Hi, everyone.

Once again, I'm transferring you now, and I will introduce the call. One moment. Thank you. Welcome back to the Novartis R&D Day 2021. We will now continue with the IHD session. [Operator Instructions] I would now like to hand over to Angelika Jahreis, Global Head, Immunology and Hepatology and Dermatology Development Unit. Please go ahead.

Hi. Welcome back from the break, everybody. My name is Angelika Jahreis. I'm the Global Development Unit Head for Immunology, Hepatology, Dermatology. This is my first R&D day with Novartis, so I wanted to briefly introduce myself. I am a physician scientist by training and a board-certified dermatologist. And after my training at the Scripps Research Institute, I went into the biotech industry, and I have been developing drugs in immune-mediated -- for immune-mediated diseases over the last 20 years of my life, and I have been fortunate to bring a few transformative therapies to patients. With this, I wanted to start and talk about the -- our pipeline here for IHD. Let us go to the next slide, Slide 68, please. Across immunology, in IHD, we focus on the areas of highest need in rheumatology as well as immuno-dermatology. On the left-hand side, you see our -- on the right-hand side, you see our portfolio, and our immunology portfolio has breadth and depth. Let me just remind you that what you see here, we have 6 Phase III programs for Cosentyx as well as 3 Phase III programs for ligelizumab and remibrutinib, and we have a staggering 15 Phase III programs across 10 indications as well as 10 assets. We also have depth in this immunology portfolio. We have several assets across the areas of highest unmet need like Sjögren's, lupus, osteoarthritis as well as in dermatology, hidradenitis suppurativa, CSU and atopic dermatitis. Let's go to Slide 69, please. Cosentyx is our fully human interleukin-7 inhibitor that has already been approved for psoriasis as well as spondyloarthropathies. Based on its significant benefit, it had massive uptake, and we have been reaching more than 500,000 patients across these indications. We have a very active life cycle management plan ongoing to achieve our ambition of 10-plus indications for Cosentyx. In addition to expanding into further life -- into further indications, we are also developing an IV formulation to give patients on current indications a greater flexibility and a greater choice of dosing. With that, let me please go to Slide 69 -- 71, sorry. Here, you see an overview of the Cosentyx pipeline. And Cosentyx is truly a pipeline in a drug. On the left-hand side, you see the asset potential. Below, you see the prevalence of these additional indications that we are targeting. On the right-hand side, you see the expansion in formulations, and I will speak later about the IV formulation in PsA and share with you the very exciting data from this formulation. As -- we also have fully enrolled our IV axSpA program. With respect to new indications, I'll be sharing exciting data with you today about HS as well as the GCA program. These are near-term deliverables for us. I would also like you to take a look at the time line as I think we have quite a few near-term catalysts for Cosentyx, which is truly exciting. With that, let me please go to Slide 72. Hidradenitis suppurativa is certainly a truly debilitating disease. You can see the axilla of a patient that's afflicted by this disease on the right-hand side with mainly scarring that is a result of the painful nodules and abscesses of this disease. Hidradenitis suppurativa is a highly prevalent disease. 1% of patients are afflicted. It is significantly underdiagnosed. And there are very few treatment options available. The impact on patients is massive as it not only affects the axilla, as you can see on this picture, but also other intertriginous areas like the groin, perineal, perianal and inframammary regions. Next slide, please. Here, you see our Phase III programs that we have done to address the unmet medical need in this patient population. The SUNRISE and SUNSHINE studies are our 2 pivotal trials that are ongoing up to week 52. However, the primary endpoint was at week 16, and I am very happy today to share with you that we have met the primary endpoint for both of these studies. The safety of the data was also consistent within what is a very well-established safety profile for Cosentyx. The studies will remain blinded until we have the data readout at week 52, but we will engage with health authorities about the next steps based on this data. Now let me go to the next indication, which is giant cell arteritis, Slide 76. Giant cell arteritis is a vision-threatening vasculitis, and it is also the most common large vessel vasculitis. It has substantial morbidity due to the -- to its potential of irreversible vision loss, and it is associated with massive toxicity of the current standard of care, which is prolonged and high-dose corticosteroid use. An unmet need truly is -- remains for safe and effective therapies. And with that, I want to share with you very exciting data on the next slide from our GCA TiTAIN II study. This study that has been presented at EADV this year demonstrated sustained efficacy as the primary endpoint but also met all of its secondary endpoints. Secukinumab was assessed versus placebo with -- in combination with the 26-week steroid taper. And what you see as the primary endpoint, sustained remission, is remission while adhering to the very stringent steroid taper. You see a staggering 70% of patients on secukinumab on the left-hand side of the slide versus only 20% of patients achieving this very high hurdle endpoint. On the right-hand side, we have also looked at the time to first GCA flare after baseline. And if you look at the slide, you will see the patients on secukinumab in dark rectangles and patients on placebo in the triangles. And what we're depicting here is the probability of being event-free. So if you look across, about 80% of patients remain flare-free over 1 year. This is in stark contrast to what you see for placebo where only 20% of patients remain flare-free. In this study, secukinumab also showed good tolerability. Taken together, there is a significant and clinically meaningful effect of secukinumab on patients with giant cell arteritis. With that, we have already embarked on initiating a Phase III study and have already enrolled first patients in Phase III. Next slide, Slide 79, please. We are providing additional options for patients with psoriatic arthritis and axial spondyloarthropathies. We know that about 20% of patients prefer IV biologics either because they have better access to it or because they -- it is their choice. On the next slide there, you see the outcome of our Phase III study, Slide 80. Secukinumab IV was effective in Phase -- in psoriatic arthritis in the Phase III study. On the left-hand side, you see the INVIGORATE Phase III study design. We've compared secukinumab to placebo, both IV. And on the right-hand side, you see the primary endpoint, which is the ACR50, and we have met the primary endpoint. 31% of patients met the ACR50 on secukinumab in contrast to only 6% of patients on placebo. Most importantly, in this study, we have met all secondary endpoints showing again complete control of all manifestations of PsA. In addition, the safety profile was in line with the well-established safety profile of secukinumab. Next slide, please, Slide 82. Now I'm shifting gears away from secukinumab to a new indication that is of high interest to us based on the unmet need but also based on the opportunity that it provides. Only 13% of eligible patients are currently treated with a biologic. That leads to a treatment gap of about 700 patients that are currently needing new therapies but not -- are not receiving that. These patients are uncontrolled on current standard of care of up to fourfold second-generation antihistamines and are not receiving biologic therapy. On the left-hand side, you see 2 pictures. In the lower panel, you see a typical patient with urticaria. You see the reddish lesions and how many this patient has. And I would like to ask you to please remember this patient because I will come back to that patient and the image of this back. These lesions are intensely, relentlessly itching, and they have a significant impact on the quality of life. Our treatment goal for patients like this is complete control of urticaria, so no itch and no hive. In the upper panel in the upper picture, you see a patient with angioedema. 50% of patients with CSU can present with angioedema, and you see this on the lip. This is a painful manifestation. But this can also happen in other parts of the body, just like the tongue, and then it becomes a life-threatening symptom. So this demonstrates really the impact that CSU can have on patients. Let me go to Slide 84, please. Here, I'm showing you data for ligelizumab. Ligelizumab is our second-generation IgE antibody. It inhibits the binding of IgE to the high-affinity IgE receptor. This is in contrast to omalizumab. Omalizumab inhibits the binding of IgE to the low-affinity IgE receptor. As you can see on the left-hand side of this slide, ligelizumab in gray showed better symptom control compared to Xolair, which is the red line. These data have been published and have been presented before. They have been published in the New England Journal of Medicine. We currently have 2 Phase III studies that will soon read out ongoing where we are testing if ligelizumab is superior to omalizumab. Slide 86. There are several diseases that are prototypical allergic diseases mediated through the IgE binding to the Fc epsilon receptor -- to the epsilon receptor. One of those is inducible urticaria. And what is different from inducible urticaria to spontaneous urticaria is that the trigger is known. 1/3 of all urticaria patients have inducible urticaria. In contrast to spontaneous urticaria, there is no treatment available beyond antihistamines. Disease triggers are often unavoidable. And our treatment goal is, again, symptom control. I'm happy to report to you that we have enrolled a Phase III study of ligelizumab also in this disease. Now let me go to Slide 88. This is the third disease that is also triggered through IgE-IgE receptor interaction. It is an allergic disease. It is food allergy. It has a high prevalence and afflicts 3% to 8% of the population. Food allergy can lead to systemic allergic reactions, including anaphylaxis and death. There are currently no treatments available for this therapy with the exception of allergen avoidance, which is very difficult, or epinephrine. Quite often, patients have accidental exposure and then experience severe food allergic reactions. Thus, a high unmet need also exists to provide therapies for patients with food allergy. And we are starting up a Phase III study in food allergy and anticipate that we enroll the first patients before year-end. Slide 90. With this, I just wanted to share with you our very exciting program for ligelizumab. We have the Phase III study readout for CSU, but we've also initiated 2 Phase III studies in indications where currently no treatment exists: food allergy and CINDU. With that, let me go to our second molecule for CSU. That is our BTK inhibitor, remibrutinib. Next slide, please, Slide 92. Remibrutinib is an exquisitely selective potent covalent oral BTK inhibitor. And I am highlighting the exquisite selectivity because in contrast to other BTK inhibitors across more than 500 patients treated to date, we have not seen significant off-target toxicity in our clinical trials. We believe that this molecule has the potential to be best-in-class. For -- with respect to CSU, we are anticipating that the effects through the Fc epsilon receptor inhibiting mast cell and basophilic degranulation will be the major mechanism of action. Slide -- next slide, please. Here, I would like to ask you to go back and think about the patient that I've shown you with CSU. If you look at the left graph and at the purple line, if this patient had enrolled in this trial, at week 2, after 2 weeks of taking remibrutinib, this patient would have had a 30% chance of being completely disease-free, meaning no itch, no urtica, a complete absence of hives and itch within 2 weeks. That is an absolutely dramatic response. If the patient goes on to week 4, his chance of being completely free of disease symptoms increases to even 40%. The early onset and the high response rate are truly -- really show that this has the potential to be a truly transformative therapy. Now if you look at the right-hand side, I would like to remind you that also in this clinical trial, no clinically relevant adverse events associated with typical BTK inhibitor class events has been associated across the entire dose range tested. And in this study, up to 100-milligram BID doses were tested. So therefore, I am truly excited about this molecule. It is the first oral therapy to advance to Phase III in CSU. And I'm very happy to tell you that both of these studies had already enrolled a first patient. It has a best-in-class profile based on these data that we have seen, and there is a lot of promise for this molecule. Slide -- next slide, please. Here, I'm showing you our overall portfolio for chronic spontaneous urticaria. We already have Xolair as the current standard of care on the market for patients uncontrolled on antihistamines. Ligelizumab has the potential to become the new standard of care as we are assessing it versus Xolair. Remibrutinib is the potential first option after antihistamine use with oral convenience, biologic-like efficacy, early onset of action and a favorable benefit/risk profile. So both having a biologic with potentially superior efficacy to current standard of care and an oral therapy in our armamentarium going for CSU. Now let me completely shift gears and go away from allergic diseases and talk to you about B-cell mediated diseases, and let's go to Slide 98. On Slide 98, I am sharing with you the mechanism of action of ianalumab VAY736. This molecule has a unique mechanism of action. It is a B-cell depleting agent, but it has an enhanced ADDC (sic) [ ADCC ] mediated B-cell depleting, leading to deeper tissue and periphery depletion compared to other B-cell agents. As you know, the counterregulation to B-cell depletion is an upregulation of the B-cell survival factor BAFF. And this molecule also blocks the BAFF, is an anti-BAFF receptor molecule antibody. As such, it blockades -- it blocks the counterregulation of B-cell depletion BAFF as well. So its dual mechanism of action may lead to more profound B-cell depletion, and this is expected to deliver deeper and longer-term disease remissions versus other B-cell depleting agents. We are planning for this molecule to be assessed across a range of prototypical B-cell -- across a range of diseases that have a prototypical B-cell pathology. Now let me go to the next slide, Slide 99. Sjögren's syndrome is one of these diseases. It is the second most prevalent rheumatic disease. Systemic features occur in about 40% of patients, and 5% of patients move on to develop non-Hodgkin's lymphoma. Importantly, to date, no disease-modifying treatments are available for these patients. Let me go to Slide 101. These are the data from the ianalumab Sjögren's Phase II study. They met the primary endpoint, showed a dose-dependent efficacy and good tolerability. As you can see on this slide, on the left-hand side, on the left panel on the left-hand side, you see a comparison between placebo and ianalumab, and almost 30% of patients had a greater response versus placebo. This is important because ESSDAI responders are those patients who have a clinically meaningful difference in ESSDAI. On the right-hand side, we look at the ESSDAI disease activity at week 24. And if you look from placebo and compare it to ianalumab 300 milligram, you will see that about 25% fewer patients do have high and moderate -- 25% fewer patients have moderate to high disease activity on this graph. That means that of those patients who started the study, all of those had moderate to high disease activity. And now about 60% have low disease activity on ianalumab and only 35% on placebo. These data are absolutely stellar and are the first data to show a true treatment effect on ESSDAI in such a large trial. Let me go to the next slide, please. This is Slide #104. Based on these data, we are advancing ianalumab into a Phase III study for Sjögren's, but we're also assessing the effect of ianalumab across a range of autoimmune diseases that are B-cell-driven diseases as well in -- as B-cell malignancies. Now I'm coming to the last molecule that I wanted to share with you. That is ianalumab, Slide 104 -- Slide 106, apologies. Osteoarthritis is a progressive debilitating condition. All of us know someone who has osteoarthritis. 300 million people worldwide have osteoarthritis, most predominantly on the knee. About 1 million patients every year in the U.S. alone have knee replacement. To date, no treatments exist that can slow or reverse the damage to the joints. Our only option if you have osteoarthritis is either to have a pain medication or to have full joint replacement. There are no disease-modifying therapies. Our goal at Novartis to develop therapies for osteoarthritis is to develop disease-modifying therapies that reduce the pain, improve the function, prevent joint failure but also surgical joint replacement. With that, let's go to Slide 07. LNA is an -- LNA043 is a modified recombinant human angiopoietin-like 3 protein fragment and has shown to induce cartilage regrowth. On the left-hand side, you see the mechanism of action, but I would like to really focus you on the right-hand side. On the right-hand side of the slide, you see 4 different panels of MRI images. In the left upper panel at the arrowhead, you see the site of a biopsy, and below, you see the same biopsy site both at day 3. In the upper panel, you see a patient who has been treated with LNA043 and below a placebo patient. What is striking is if you go over to week 4, that at week 4, you -- at week 4, the cartilage defect that you see on day 3 has regrown, whereas in the lower panel for the placebo patient, you see the defect is still existing. With that, we have embarked in a Phase IIb study with the -- Phase IIb study where we will look not -- where we will look at function and pain as the primary outcomes for that study in order to see if LNA043 will live up to this significant potential to regenerate cartilage and to have an effect on patients with osteoarthritis. With that, I want to thank you. And I'm open for questions.

[Operator Instructions] We have the first questions coming from the line of Richard Parkes from BNP Paribas.

It's just on biologic penetration on -- in CSU. It seems pretty low despite the fact that Xolair's quite effective and available as a self-administered injection now. So could you just walk us through what the barriers to uptake and penetration have been there? And maybe just to the second part, could you clarify when and if you expect biosimilars to Xolair, I'm just wondering if the subcu formulation is a barrier to entry of biosimilars.

Well, I think there is still a significant opportunity in the CSU market for patients to receive better therapies. I think this is also a significant opportunity for us to have an oral therapy available to patients. We have seen across dermatology that many dermatologists as well as patients with dermatologic diseases often prefer oral therapies. And this is why -- one of the reasons why we are so excited also about remibrutinib, which has shown biologic-like efficacy, fast onset of action, a really good safety profile to date and is an opportunity for us to address that patient segment of patients who would rather be treated with an oral segment, with an oral therapy than an injectable.

Yes. And I think on top of that, in terms of the patients who have CSU, there's a number of patients that actually have not been diagnosed or sought treatment. This is probably a large pool of population of patients who actually don't know that there are treatments available. And so given that, we actually have 2 opportunities here, one with ligelizumab with readout before the end of the year as well as remibrutinib, which is an oral agent, as noted by Angelika earlier. We have 2 opportunities by the end of the year in 2025, and I think with awareness, we probably will have more patients that will be seeking treatment in the CSU space.

We have the next question from the line of Graham Parry from Bank of America.

So I noticed that you didn't have iscalimab on your slide, your CD40 ligand. That was also being developed in Sjögren's, but you have some disappointing transplant data. So I wondered, has ianalumab taken priority as your sort of target Sjögren's asset? And would you be able to file on the back of Phase IIb data, do you think, just given the large unmet medical need in that indication?

So yes, we also have a Sjögren's study ongoing in iscalimab. And with the Sjögren's study in iscalimab, we are also looking at patients -- we are looking at different patient subsets, and the study has not read out. But our ianalumab data are exciting, and they set a new standard for the potential treatment of Sjögren's. However, we will wait to conduct 2 adequate and well-controlled Phase III studies in order to move this forward. There is -- we cannot move forward with the current Phase II study for ianalumab.

We have the next questions coming from the line of Steve Scala from Cowen.

For Cosentyx, peak sales were said to be $7 billion plus, which is at least $2 billion higher than they'll probably be at the end of this year. The 3 drivers were noted to be increased use of biologics, growth in China and life cycle management. Can you provide any perspective on the relative contribution of those 3 drivers to attaining that $7 billion plus? And related to that, Novartis has previously talked about work about -- or talked about work on an oral IL-17. Wasn't mentioned today. What's the status of that program?

Maybe I'll start and I'll ask Angelika to jump in here. In terms of the opportunities, unfortunately, we don't have the commercial leaders here to break that down. But what you did see in the slides is we have 10 different indications that we're pursuing for life cycle management, as Angelika has actually shown as -- moving forward that we have top line results for hidradenitis suppurativa, which we're really excited about moving forward. In addition to that, we have the IV psoriatic arthritis and additional indications that will be reading out over the next couple of years. And maybe I don't know if you want to comment about some of the additional indications, Angelika.

Well, you have seen the truly exciting GCA data for Cosentyx. And we have already started the Phase III studies. We also have a study in lupus nephritis ongoing that is already 1/3 enrolled. And next quarter, we will have the readout from lichen planus studies where we are looking across 3 different subsets of lichen planus, which is a huge opportunity, as you have seen in the slides, a really prevalent disease. So we have a very robust life cycle management for Cosentyx in addition to providing alternative treatment, an alternative IV formulation for patients with Cosentyx as well.

The next questions come from the line of Peter Welford from Jefferies.

I wonder if you could just go back to LNA. Just curious there with regards to the Phase IIb trial, I think, you said readout in 2024. Obviously, that is measuring cartilage growth. Wondering if you could give an idea in terms of what a pivotal endpoint in that sort of indication looks like, do you have to then look at pain and function still? Or do you think it's possible to potentially seek approval based on cartilage in that study? Because I mean it's a long-term study with -- 2 years. Is it powered to hit that pain and function endpoints on the secondary endpoints? Or realistically, should we just be looking for trends at best in that? And so how would the Phase III trial differ?

So yes, we are in ongoing conversations also with FDA how to make drug development in osteoarthritis faster. And there has just been a recent FDA workshop that has been -- has had that topic as one of the topics for discussions. But yes, pain and function are currently the 2 endpoints. And in order to show this disease modification, it is not sufficient to just address pain and function, but you also need to show that you have an impact on the overall joint survival. So current endpoints are pain and function for osteoarthritis, and we are in discussions with the FDA how to advance the development of drugs for osteoarthritis.

I know you were on the panel with the FDA in those discussions. And I know the FDA is very keenly aware of the unmet medical need in this area. I think as you asked about whether these would be sufficient for filing, we'll have ongoing discussions with the agency in terms of moving forward. As you said, it is a robustly powered Phase II as we move forward. And as we explore more and get some of the results, I think we'll find out more in the dialogue with the FDA what the best path forward would be.

The next question comes from the line of Matthew Weston, Crédit Suisse.

My question is about your target positioning of Cosentyx in HS. We understand from our physician conversations that most moderate to severe patients get HUMIRA and stay on it even if they have a suboptimal response given the lack of other options. Do you think Cosentyx has the potential to displace HUMIRA? Or do you think it's much more going to be one where you focus on HUMIRA failures?

So we have -- in our Phase III trials, we have included patients who are biologic naive as well as patients who have received HUMIRA as treatment before. We believe that depending on the data when we will look at these in more detail, that Cosentyx will serve all patients with hidradenitis suppurativa. There is a significant unmet need in HS. And as you have alluded to, adalimumab does not work that well in patients with HS, and in particular, it loses efficacy over time. So patients with HS have a significant unmet need. Not only do they have abscesses and inflammatory nodules, but many of them go on to scarring, and some of them even have and developed squamous cell carcinoma. So there is a significant desire for patients and physicians to have additional treatment options. And if we look at a space like, for example, psoriasis or rheumatoid arthritis, certainly, there are so many different treatment options, whereas currently in HS, there is just a single biologic approved.

Yes. I think, Matthew, as you noted...

Can I just ask...

Go ahead, please.

No, I was just going to ask a quick follow-on. I think in a previous R&D event, you gave us the peak sales potential of the HS indication of $500 million. But I think AbbVie has told us that HUMIRA sells $1.7 billion in HS. So if you have the potential to serve that entire patient population, I'm just a little bit surprised by the revenue opportunity.

I'm not here to actually put a number because from an R&D standpoint, it'd be difficult for me to do that. But I think what you said earlier in terms of treatment options, currently, there is no alternative. So this is why a lot of patients continue to stay on adalimumab. And as we see that there will be alternatives or at least with the opportunity reading out with our positive results in HS with Cosentyx, I do think that this is a significant opportunity for us to ensure that this is a viable option for many patients.

The next questions come from the line of Wimal Kapadia from Bernstein.

Great. Just coming back to ianalumab, you seem to describe the strength of the Phase II data for Sjögren's as really strong. But I guess how should we think about your level of conviction for the Phase III just given the challenges for this heterogeneous disease? And then just tied to that, the majority of the indications that you're targeting, they're not easy either, also quite heterogeneous. So in terms of the read across that we can take on a conviction perspective of the Sjögren's Phase II for some of the tougher indications like lupus, just really trying to get a sense of your conviction just given high unmet need but quite tough indications to actually demonstrate good outcomes.

Yes, you're absolutely correct. I mean in Sjögren's so far, there are no approved disease-modifying therapies. And actually, if you look at the overall pipeline, there are not that many molecules in development for Sjögren's because development has been so difficult. But we know that Sjögren's is a prototypical B-cell-driven disease. And these data make us confident for our Phase III trials. However, I think we will conduct these trials, and then we will see the outcome of these trials. Certainly, what I can say and where my conviction comes from is that to date, these data are quite exceptional. Now with respect to lupus, another very difficult-to-treat disease, we have a Phase II study ongoing, and we will be looking at these data and getting a readout from these data soon. So that should give us additional confidence in the pathway as lupus as well is a B-cell-driven disease. Then let me add, too, if you think about B-cells, this molecule combines what we know is an effective therapy -- is a modestly effective therapy is inhibition of BAFF. We also know that if you have second- and third-generation B-cell depleting agents that there is an effect on these potentially still under investigation on B-cell on -- for example, in lupus as well. Now combining these 2 pathways, I think, certainly has the potential for best-in-class and best-in-disease potential with a combination of an anti-BAFF as well as B-cell depletion in particular as we have seen that the B-cell depleting -- the B-cell depletion is more potent with ianalumab compared to other B-cell depleting agents. So while all of these diseases have not been easy to tackle, that's why there is such a huge unmet medical need still remaining, these data make us confident in our Phase III program.

Yes. Really well said, Angelika. And what I would add to that is as we look at the Phase IIb that we've done in ianalumab for Sjogren's syndrome, this is probably the largest or one of the largest, if not the largest, Phase IIb. Based on that, we have a lot of insights on which of the patients actually do derive benefit, and this is how we will refine our Phase III study that we will be moving forward in terms of the inclusion and exclusion criteria. Absolutely correct, as you noted, that it is a heterogeneous disease. But we also have one of the largest pools not only from ianalumab, but also we've done it with remibrutinib and insights that we have from iscalimab in Sjogren's. So having all of the insights in Sjogren's syndrome gives us a lot of details about how we would design our Phase III. Now moving forward about our conviction in terms of the broader additional indications. We actually do have a lot of insights on this drug, VAY. I won't try to pronounce the drug name again because it's very difficult for me. But in fact, what you'll see is we do believe in terms of the dual pathways of anti-BAFF and ADCC B-cell blocking that this has distinct advantages, and we know the safety profile very well for the drug. And hence, our conviction behind moving forward in a number of indications for ianalumab.

We have the next question from the line of Simon Baker from Redburn.

It's on CSU. You highlighted quite a significant portfolio of development assets in CSU. But I was wondering if in light of an Israeli paper last year on the implication of IL-17 in CSU, whether Cosentyx should be on that list as well, looking at either in isolation or in combination with ligelizumab.

Thank you very much for that suggestion. I think the IgE pathway is so central to the pathogenesis of CSU that we have focused on targeting that pathway. And we have 2 terrific molecules currently in development, ligelizumab as well as remibrutinib, and we have seen quite strong efficacy data there. Therefore, I think we will -- we are currently focusing on starting and conducting Phase III and starting Phase III of both of these Phase III assets for CSU.

Thanks, Angelika.

The next questions come from the line of Keyur Parekh from Goldman Sachs.

I'm just wondering if you can talk a bit to kind of the commercial outlook for remibrutinib, kind of on how do you see it split across the 2 various indications you're developing it in. Obviously, pricing across the 2 markets is very different. Just any point there on how you're thinking about commercializing this asset across the 2 would be very useful.

So I'm not on the commercial side so I would not be the best person to address this question, but maybe we can get back to you with an answer about this. However, from my side, I think there is a significant opportunity to make a difference for patients in inducible urticarias as well as in food allergies. As I've shared with you in both of these indications, there are currently no treatments available beyond antihistamines for inducible urticaria as well as allergen avoidance or in case of an emergency, an epinephrine injection for food allergy. So the unmet need in both of these indications is just absolutely significant. And we have an opportunity here to make a significant difference with therapies that we know affect the pathogenic mechanism.

Thanks, Angelika.

The next questions come from the line of Richard Vosser from JPMorgan.

I wanted to ask in this section about ensovibep please. Given Omicron, given the potential of lower efficacy for some of the other therapeutic antibodies in the immunology section, I just wondered on your thoughts on ensovibep here and your thoughts on the upcoming EMPATHY data and whether -- and you could get an EUA based on just on reduction of infections or reduction in viral load and how you're thinking about the product for the pandemic.

Yes. Thanks, Richard. Certainly, Omicron has been alarming in terms of the number of mutations that we're all reading in the newspaper, and we have conducted studies with Molecular Partners. Molecular Partners has released data from In vivo studies where ensovibep potentially would be effective in patients with the Omicron variant. So currently, in the studies that we're advancing with Molecular Partners, we do not have patient populations that are recruited with the Omicron variant. However, in discussions with them, they are considering some ex vivo studies to pursue whether this would be an approach forward. Now you also asked about emergency use authorization, and this is something that we'll have to discuss once we see the results from the Phase II studies, which are available in the early part of January. So once we get these results in the early part of January, I think we'll be open and we'll certainly explore use of EUA in terms of moving forward with FDA.

The next questions come from the line of Emmanuel Papadakis from Deutsche Bank.

Maybe I'll come back on ianalumab. A couple of follow-ups. The -- just wondering about the significance of the missing secondary endpoint, ESSPRI. And then perhaps more importantly, you only really saw primary promising data for the [ escalating ] dose at 300 mg but you didn't disclose any safety data. You did say there is no dose-related adverse event. But if you could just talk a little bit more about the safety profile you saw, in particular the 300 mg, that would be very helpful.

Yes. Thank you. So if I understood the question correctly, you had asked about the ESSPRI as well as the safety database. Thank you. So the ESSPRI is a patient-reported outcome, and it measures mostly glandular symptoms. It asks about dryness, fatigue, pain, so more glandular symptoms in patients. However, our goal with ianalumab is to look at extra glandular systemic syndromes. And those patients who have really a substantial disease burden based on, for example, interstitial lung disease, arthralgia, myopathies that are those Sjogren's patients with systemic manifestations that have a -- all patients have a high unmet medical need, but those patients with the highest unmet medical need and a likelihood -- in their lifetime, a 5% likelihood to develop lymphoma. The -- therefore, not meeting the ESSPRI is not surprising. None of the molecules to date that have been assessed -- or I shouldn't say not. Those molecules that have been assessed in a patient population predominantly with systemic symptoms do not -- often do not have an effect on the ESSPRI. Now with respect to the safety, our safety has been -- as I shared, we had an uneventful safety with the one exception that we have seen, injection site reactions with ianalumab, and that was higher than with -- compared to placebo. But in general, it was very well tolerated.

Thanks, Angelika.

The next questions come from the line of Seamus Fernandez from Guggenheim.

So just a quick question on -- specifically on ligelizumab. Just wondering when we're likely to see the data. It seems like we've been waiting quite some time for that. Should we officially anticipate those data being presented at a medical meeting next year in some detail? And how do you really see carving up the prospects of remibrutinib and the opportunity there versus the opportunity for ligelizumab just given potential for quite significant overlap in indications?

Yes. Thanks, Seamus. We look at ligelizumab and the approach. We did 2 studies, PEARL 1 and Pearl 2, 1,000 patients each. And in fact, what we're waiting for is both results to be available, and we'll release that before the end of the year. So we will be releasing that once we have the data available for both studies at that time. As we look at the treatment for ligelizumab versus remibrutinib, obviously, one is subcu versus the other that's an oral treatment. And that's exactly the approach that we'll take because I think there will be patients who will prefer the subcu route of administration and others who will prefer the oral route of administration. And as you saw from the results that we had shown with remibrutinib, the fast onset of action. So it is a biologic-like efficacy with oral -- or oral approach that actually has biologic-like efficacy. So that's the approach we'll take and looking forward to sharing the data before the end of the year on ligelizumab.

The next questions come from the line of Graham Parry from Bank of America.

I just have one follow-up question on hidradenitis suppurativa for Cosentyx and just the exact regulatory pathway you're going through with the 16-week versus the 52-week data. So I think you said you could engage in discussions with regulators on the 16-week but it remains blinded. So do you have to wait for 52-week data to actually do a full filing? Or is that something which gets submitted later in the review process?

Yes. So the 16-week data were the primary endpoint. And we are engaging with discussions around with both -- with all health authorities around mainly in Europe as well as the FDA around the filing of these data. We will approach them with our 16-week data.

And as we get the 52-week data, we will be in the process of filing. So during the submission process, we will be able to collect that 52-week data and supplement it during one of the question review sections.

The next questions come from the line of Simon Baker from Redburn.

Yes, just going back to Cosentyx and GCA. You showed some excellent data, sustained responses really from about 40 days onwards, but an initial drop in that early period. I just wondered if there was any explanation for that and if there are any biomarkers of response that you've detected in that patient group.

The GCA data, we have shown that there was a significant reduction in the patients who have flares. Now I -- we have not looked at our biomarker data yet with respect to understanding the initial small drop. However, I think the data overall, keeping 80% of patients flare-free is absolutely significant, in particular, if you look at the study and compare it to the only 20% of patients who are flare-free on placebo. So while the initial drop was certainly something to look at in more detail, the treatment effect overall that we have seen in this difficult-to-treat disease is certainly impactful for patients. And in particular, as secukinumab has been well tolerated in this indication.

Yes. Thanks, Angelika. We certainly were excited when we saw the results of the TITAN study. So looking forward to advancing in our Phase III program quickly.

So with that, I think we have completed our immunology, hepatology and dermatology section. I'd like to invite Norman Putzki, who's our Head of Development for Neuroscience, and he'll be covering the neuroscience section. Over to you, Norman.

Thank you, John. Thank you, Angelika. What a terrific session that was. My name is Norman Putzki. I'm a neurologist working for Novartis as the Global Head of Development. As for Angelika, this is also a first for me. So I've been in this space for more than 20 years in a variety of academic and industry settings. And there's one other thing that I have in common with Angelika, and that's a passion for immunology. So in my case, neuroimmunology. And with this, I've been engaged in some of our development programs here in Novartis for Gilenya, Mayzent and Kesimpta. Next slide, please. Neurological conditions impose the highest burden of disability on our societies and it's predicted that this burden is actually further increasing over time. Novartis has been in this space for more than 70 years. We've delivered several solutions in forms of symptomatic treatment and also disease-modifying treatments. And most recently, Kesimpta and Zolgensma are 2 of those examples. Many of those conditions that we know in the neurology and psychiatry space, we regard them today as relentlessly and inevitably progressing. And our vision here in Novartis is to change that, to change the outcomes of those conditions that currently cannot be treated and that have a high unmet need. When you think about neurodegenerative disease alone, it is about 1 in 6 persons that are affected. So many of us actually know people in our families whose life was destroyed by diseases like ALS or Parkinson's disease. So that is a focus area for us. Aside, we want to deliver solutions to multiple sclerosis patients that allow them full control over their disease. We are focusing on transformative psychiatry and also on gene therapy. When you want to -- focus your attention for a moment on the right-hand side of the slide, you see that we have a strong pipeline in the early stage and also the late stage across those 4 focus areas. So starting on the top of the slide. In addition to our leading MS portfolio, we do want to take the MS portfolio further in the future with -- into the future with remibrutinib. We've also entered in a collaboration on immune tolerization, which is truly exciting, could be the next frontier for multiple sclerosis. For neurodegenerative disorders, we focus on diseases that have strong motor components. For example, ALS, Parkinson's disease, progressive nuclear palsy, tauopathy. And then last in psychiatry, we're interested in transforming psychiatry with focus on severe chronic condition in that space as well. And then lastly, when it comes to gene therapy, we want to make gene therapy foundational for patients with spinal muscular atrophy. So during the next 20 minutes or so, I will focus on 3 areas. One is remibrutinib in multiple sclerosis. This is a Phase III program that we just disclosed a couple of weeks ago. Second focus area will be Zolgensma, and I will focus on the IT program that we're currently conducting in that space. And then lastly, oral branaplam for Huntington's disease, which is currently in a Phase II dose-finding study. And at the very end of my presentation, I have the privilege to disclose some exciting news here today, and that's the fact that we have entered into a co-commercialization, co-development for an oral disease-modifying treatment with UCB. It is the lead molecule that focuses on alpha-synuclein to modify the course of Parkinson's disease. So truly exciting news at the very end. With this, I would like to go to Slide #1-1-4, 114, and we can go right into remibrutinib. So Angelika has already introduced the molecule so I will not repeat everything she said. But I do want to say that the pharmacological profile of remibrutinib allows maximizing efficacy and without compromising on safety. That is the real promise that we see with the exciting oral BTKi. Further to that, we have seen that there's fast onset of action with this covalent, irreversible binding, and we have seen low off-target exposure. So from a multiple sclerosis perspective, I truly could not wish for a better molecule to take forward into multiple sclerosis development. And this entire data package is really exciting. I do want to add to this that we have not seen any dose-limiting toxicity in any of our completed trials, which really sets remibrutinib apart from other BTKis in development. So on the next slide, I would like to introduce the Phase III program in multiple sclerosis now to you. The program is called the REMODEL program, and it has 2 identical trials, REMODEL 1 and 2, that are powered to show superiority over standard of care. So of course, we realize that this is a very competitive space and we want to make up some time. So this is really a direct to Phase III approach that we have agreed on with the regulators, which truly helps us with this objective. In addition to that, it's noteworthy that these are event-driven trials, which will also speed up the readout of the data as far as we can imagine today. And then lastly, when you look at the design and the methodology and the endpoints, you really see what you would expect in such a program in Phase III for multiple sclerosis that would enable registration and also reimbursement later on. So I think with our experience in this space, again, multiple MS programs, Gilenya, pediatric multiple sclerosis, Mayzent and Kesimpta, I think we are put in a really advantageous position to deliver on these programs to expedite it, and we expect the data readout still in 2025. Can we have the next slide, please, Slide 116. So we have a world-leading MS portfolio today. And for remibrutinib in MS, we also see a really significant potential. And I think it's a wonderful fit for our portfolio provided approval, and this we expect after a submission in 2025 still. So really, again, underlining the fact that the program is moving really fast. And as Angelika said also in CSU, the trials are evolving really nicely, underlining that there is a high unmet need and we're focusing on changing the outcomes for patients. So I think we can go to the next slide and really changing gears now focusing on gene therapy, namely Zolgensma. Zolgensma is an essential onetime treatment that replaces the function of the disease gene that is the SMN1 gene. And so the -- it hits the disease, it treats the disease right at the course of this condition. So we now really have a data set that shows clinically meaningful benefits across a variety of clinically relevant settings, and we also have shown durability of the response now 5 years plus. So now I will focus the presentation on the development program for 101 IT, that is the intrathecal formulation of Zolgensma, and how we plan to take it forward. Before we go into the plans for this, I would like to again underline the fact that we have lifted the clinical hold for IT, which allows us now to move the program forward. And for gene therapy overall and certainly for Zolgensma, our objective is to make gene therapy foundational for all patients with spinal muscular atrophy who can benefit from this treatment option. Next slide, please. So this is Slide 118. So in fact, the largest population of SMA or patients who are prevalent who already have spinal muscular atrophy are not born with this condition. So for this largest population, the currently -- current treatment options that are available require chronic lifelong treatment. And there's a significant burden that comes with these treatment options. Some of them are listed on the slide. And in addition to the burden that comes with the chronic administration of treatment, there's also not always a full clinical response. So it's really for this population where we believe with 101 IT we can alleviate this burden and can address the high unmet need that is still prevalent in this largest group of SMA patients. So on the next slide, I will introduce 2 trial -- sorry, let me take a step back here. So we already have data available for 101 IT, and this is data from the STRONG study. So before I show the additional trials that we're now doing, I would like to again reiterate the remarkable data that we have seen in the STRONG study. So in STRONG, we have seen a 92% rate on an established parameter for clinically meaningful response that is 3 points on the Hammersmith scale. So in fact, when you look on the changes on average on treatment, we've actually seen that the effect was double. So there was a 6-point improvement on patients treated with IT on the Hammersmith scale. So what that means is that patients improve fully in 3 domains in terms of their motor functions or they improve partially in 6 domains. So truly clinically remarkable data for -- originating from this IT trial. So on the next slide, I would now introduce 2 trials that are part of the program for 101 IT. On the right-hand side, it is the STEER program, which is really the pivotal study for 101 IT. For this program that is placebo-controlled, we target treatment-naive patients with SMA Type 2 below the age of 18 who can sit but never walked. The primary objective of this trial is again the Hammersmith scale, and I'm pleased to report that the study is ready to enroll very, very soon. On the left-hand side of the slide, it is the STRENGTH study. It's a Phase IIIb study that actually we disclose here for the very first time. And this is an open-label Phase IIIb study in patients with SMA who receive 101 IT after previous treatment with nusinersen and/or risdiplam. And this is a setting that is becoming increasingly more relevant, and we want to show safety and tolerability of 101 IT in this setting. So this trial is expected to start in the mid of next year. Next slide, please. So overall, when we look into the global situation for patients with SMA, there is a significant unmet need, and there's also a significant addressable patient population. And you see some of the numbers displayed here on the slides. Before I conclude on the -- on Zolgensma, I again want to reiterate that we are doing all we can to really establish the right database for the IT formulation 101, but we're also not stopping our efforts for Zolgensma IV. The SMART study is a program that's already underway. It includes patients up to the body weight of 21 kilograms, also previously treated patients to further substantiate the significant benefit and the potential that we've already seen for Zolgensma. Next slide, please. So now again, completely changing gears, a complete change of disease areas really. So we are talking now about Huntington's disease. And I would like to introduce oral branaplam to you. Oral branaplam is an orally administered small molecule RNA splicing modulator that is currently in a Phase II program underway. I would like to remind us that we actually know this molecule fairly well already from a prior program in children with SMA. So there's a substantial and important database available. And in this program -- sorry, in the program for Huntington's disease that is now in Phase II, we want to establish the right dose, the right efficacy in terms of targeting the Huntington protein, which is at the root cause of Huntington pathology. And we also want to demonstrate that the reduction can ultimately lead to an improvement in the disease course. Can we go to the next slide, please, that is Slide 123? So I would like to take a moment to introduce the mode of action of branaplam to you. And this slide is admittedly a little technical so please bear with me. I'll try to simplify the story. So branaplam was originally invented to target the SM2 gene in patients with SMA. And the idea behind it was that this RNA splicing modulator can actually boost the activity to the SM2 gene in a setting where the SMN1 gene is not functioning. So branaplam is remarkably targeted and it targets only certain sequences of RNA, and the exact sequences actually are mentioned here on the slide. And it's really curious to see that what we have found is that while -- that there is a similar sequence in the SMN2 gene and in the Huntington protein. And so we target both of them essentially with the same molecule and a similar kind of mode of action. So it's really curious to see that on the one hand, we can stabilize the SMN2 gene and boost the activity with branaplam. While when we use it in Huntington's disease, it prevents the formation of Huntington's disease, and this is really the most promising treatment target that is currently available for Huntington. Next slide, please. So Huntington is a disease that is horrible. It hits patients in the middle of their lives, and it is characterized through progressive motor and psychiatric and cognitive symptoms. And death occurs often over a period of about 2 decades. There's no disease-modifying treatment available. It's a rare genetic disease where all carriers will develop the disease, and there's a 50% chance that the descendants will inherit this gene as well. So currently, again, no treatments are available, and the situation for parents -- apologies, for patients and their families is truly devastating. 2021 has been a very challenging year for this community, and we're really working with this community very closely to advance the scientific breakthrough. Branaplam is really exciting in terms of where it targets the disease. It is noninvasive. We develop it to be a once-weekly oral formulation, so very convenient for patients. And given the fact that we have seen uniform HTT lowering throughout the brain in our animal models, we are actually really excited about this opportunity to take branaplam forward. And again, based on the high unmet need, this is a high-priority program for us. So on the next slide, I would like to illustrate where we're actually in this development program. We have completed our Phase I study in healthy volunteers. We have seen dose-dependent target engagement. We have seen HTT mRNA levels reduced. And we have seen a PK/PD profile that supports weekly oral dosing. So the drug -- the regimen that we tested and the drug overall was well tolerated. On the left-hand side of the slide, you really see what's what happened in SMA patients when they were treated with branaplam in terms of the Huntington protein that we're actually targeting. So what is illustrated there is a 30% to 50% decrease over time of the Huntington protein. So when you look at the blue and orange line on this slide, you see this 30% to 50% reduction, which shows that the Huntington protein was reduced. And the gray line just illustrates that there was target engagement in terms of the mode of action, confirming that branaplam did what we wanted it to do in this trial. So on the next slide, I'm happy to show the Phase II program that is actually now ready to go. We are testing 3 cohorts of patients with the dosages that are indicated here on the slide. And when you look at the design features, the intent is really to find the ideal dose that allows the drug to be safe and well tolerated. But at the same time, we want to hit the 30% to 50% reduction of Huntington protein because it's generally believed that this will translate into modifying of the disease course in this devastating condition. So the trial is now ready to go, and we have an estimated primary completion for this in 2025 in the books. Next slide, please. So this is really now the last slide of our presentation today. And again, it's a breaking news on an agreement that we have signed with UCB, and this is about Parkinson's disease. Parkinson's disease affects about 10 million people worldwide, and there is no disease-modifying treatment available, only symptomatic treatment options, and many of you are aware about the challenges of symptomatic treatments only. So we've entered into a co-commercialization and co-development with UCB, particularly on UCB0599, which is the leading oral molecule targeting alpha-synuclein misfolding. At the same time, we have also secured an option for an additional monoclonal antibody in development that is currently in Phase I. It also targets the alpha-synuclein pathology, and the intent again is to modify the disease course. So alpha-synuclein is a super exciting target for Parkinson's disease modification. It is neuropathologically and genetically validated. And in the animal models, we have seen really strong data. We have seen reduced alpha-synuclein in this model. We have seen an increase of dopamine transporters. And we've also seen an improved motor function in these models, and the Phase I also clearly supported the very robust Phase II program that is currently already underway, and UCB is currently in the lead to that. So certainly a great strategic fit with our intent to modify the disease course for severe neurological conditions. And I think I will conclude here and open for Q&A.

[Operator Instructions] We have the first questions coming from the line of Simon Baker from Redburn.

One question. You've -- the same pseudoexon across 2 genes. Are there any other potential gene sequences that contain that pseudoexon? I'm just trying to think of potential for off-target activity.

Thank you for that. I think branaplam.

Yes. So I think we are talking about branaplam. The line was breaking up a couple of times, but I think you were talking about off-target effects. I think this is a valid concern. The biological profile of such a compound needs to be very thoroughly investigated, and we currently do it in the Phase II program. When you refer to the design of the dose-ranging study with the various cohorts on the various dosages, we really need to identify the right dose that allows for sufficient target engagement to reduce the protein while not exposing patients with undue risk of potential off-target effects. Again, we have a good knowledge on the program from children with SMA, where I think we have about 20 kids or so who have been treated for longer than 5 years. And I think the overall profile that we have seen from a safety perspective in children with SMA was actually fairly benign and the drug effects were manageable.

We'll take the next question. Go ahead. Go ahead.

Yes. No, just in case the bit that broke up, I was specifically wondering if that pseudoexon sequence which you've seen in HTT and SMN2 has been identified in any other genes.

That is a great question. I would need to consult with Jay Bradner on this. I'm not aware it is, but happy to make sure and we'll get back to you.

We'll come back to you with that response.

We have the next questions from the line of Richard Parkes from BNP Paribas.

It's a question again on branaplam. I wonder whether we've got a good enough understanding of the failure of tominersen to be confident around branaplam's potential for success. I just wondered if you could talk about that. Obviously, if that failure was just simply as a result of tominersen not getting to the right parts of the brain, then I can understand that maybe you could overcome that. But if it's a result of toxicity due to lowering of normal Huntington protein, then that would be a characteristic that branaplam might share. So just wondered what insights you've gained from publication of that data.

Yes. Thank you for that question. I think it's highly relevant. And you almost provided the answer to your own question. I think to take a step back, I think the Huntington protein is the most promising target for Huntington's disease, and that is based on about 20 years of research in the field. So I think the fact that the ASOs didn't show the data that we all wanted to see for those patients simply tells us that it's not just about targeting the protein and the biology behind it, but it's also about the right approach to that. And I think you alluded to that already when you phrased your question. So what it tells us is that the ASOs were not -- have not taken the right way to actually target the protein. And again, the mode of action of branaplam is substantially different. So it will matter how we target the protein, how we achieve distribution of whatever molecule we want to pursue in the brain, in the various parts of the brain, in the gray matter. And I think we still have a lot to learn about the biology and what it means to reduce Huntington protein in the central nervous system and also in the blood. But overall, I think this was not bad news for branaplam. I think it was clearly bad news for ASOs as an approach to Huntington protein.

Yes. Thanks, Norman. I think there were a number of hypotheses, and one of the hypothesis was around the distribution of the drug getting to the right target. And obviously, we'll find out more as we advance into our Phase II program.

The next questions come from the line of Kerry Holford from Berenberg.

A question on remibrutinib. The BTKi space in MS is, I guess, increasingly crowded. So I'd be interested to learn why you've decided to cross immunology to bring on MS at this relatively late stage. What were you waiting for in order to make the decision to progress into MS? So like despite skipping Phase 2, you're still behind peers in that area. So what differentiation do you hope to achieve with remibrutinib relative to competitors?

Yes. Thank you for asking that question. Fortunately, there was a lot of progress with disease modification in multiple sclerosis. I remember when I came to that field in the '90s, there was a single treatment available and it wasn't believed that it would actually change the outcome of this serious condition. Multiple sclerosis is an extremely diverse disease. So the disease course is not the same for no patient. It's a disease that requires a lot of different approaches. We're still not in a condition to -- in a situation where we can readily define subtypes of the disease. And a lot of treatment options are currently available, but they are also needed given the diversity of that disease. For remibrutinib, the profile is extremely promising. And as Angelika alluded to and maybe you've seen it also in my presentation, we believe that the opportunity to maximize the efficacy without compromising on safety sets remibrutinib apart even in a highly competitive environment. We have been waiting for the right data package. We knew what the drug would do pharmacologically. But when you look at the CSU data, that clearly underlined the potential of the treatment, and this allowed us to plan for a straight to Phase III approach and the regulators agree to that. So we will make up some time. It looks like we are 1.5 years behind the first entrant as a BTK inhibitor, which I think is not an unreasonable kind of delay. And based on our experience that we have in the field, I have no concerns with this kind of a time window for bringing remibrutinib to the market.

Yes. I think really the selectivity of the agent allows us to go with a lower dose. And given the lower dose, I think the AE profile -- side effect profile will be much cleaner as we've seen with CSU. And our experience across all of our MS studies and MS agents allow us to move us very quickly to read out our Phase III moving forward.

We have the next questions from the line of Wimal Kapadia from Bernstein.

Coming to branaplam, please. I guess do you have a better sense if the Phase II will actually be registrational? Just trying to get a sense of how your conversations have evolved on this design of the study. And then just sticking with branaplam, just tied to that, you talked about trying to thread the therapeutic window to demonstrate efficacy but to avoid detrimental impacts. So I guess I'm just curious of the different modalities. Is it fair to say that small molecule is probably the most attractive given you are likely to get the most even distribution? And I would love to hear your thoughts. I know this is not something you're pursuing. But on gene therapy, it's just going to be very, very tough to get the right distribution.

Thank you. So a lot of components to that question. So I'll try to go that -- go through it really bit by bit. So there's a lot of speculation involved regarding the biology of Huntington protein. And as you alluded to, I think the biology of how you engage the target, how you achieve distribution in certain areas of the brain is supposedly important. I think the failure of the ASO and the approach with the ASO to actually getting to the right target area, particularly the gray matters and maybe even inducing toxicity, may not have been the right approach. But we haven't seen all data yet published so I think we will still learn from these experiments that have been completed. My personal view is that this is not the end of gene therapy for Huntington's disease, and we see others looking into this area as well. I think for us, certainly also in the very early in the discovery stage, there's an opportunity to see how we can further substantiate our efforts and not exclusively rely on branaplam. So in terms of the pathway to approval, of course, the question of biomarker-based approval and biomarkers for disease outcome across the generation is a highly important one and certainly has become a very hot topic post the Aduhelm approval. So as you can imagine, we have already engaged with the regulators on the possibility of using biomarkers to make Branaplam available for patients as fast as possible provided that the drug has a positive and favorable benefit-risk profile. So this is an iterative process, but I think it's an area where such approaches could, with the right data package, could be successful.

Thanks, Norman.

The next questions come from the line of Graham Parry from Bank of America.

Great. So it's another one on branaplam, but I was wondering in your healthy volunteer study, was the reason to measure HTT in blood rather than CSF just due to the invasiveness of CSF in the healthy volunteer population? And what evidence is there for a correlation between HTT level in blood versus CSF and Huntington's symptoms or progression?

Yes, that's -- it's a great question, and I think the biology of Huntington protein is truly fascinating. I think some of those areas that you just mentioned are actually not yet answered. So of course, in a healthy volunteer study with a single dose, doing CSF to investigate that is an ethical kind of a problem. And in smaller studies, I think we're still -- we want to investigate how this behaves, particularly in patients. I don't know exactly how I would interpret any finding in the CSF in a healthy individual compared to the blood finding. So I think it really -- it wasn't considered very informative, but it could be informative going forward. The biology is so complex because it's not just about the presence or absence of the protein and the levels of the protein. It's also the fact that we are, as part of a healthy organism, we do need that protein. So we build the protein. So it's also about the right balance between reducing the healthy protein and the mutant protein. And these are all questions that we will answer throughout the program. But overall, I think there's still a lot of excitement. There is a lot of excitement around the Huntington protein as the preferred target these days for disease modification in Parkinson's disease -- in Huntington's disease, and we certainly share that.

The next questions come from the line of Emmanuel Papadakis from Deutsche Bank.

Maybe a question on Zolgensma and the clinical development program. So STEER, I was just curious what percentage of the prevalent population meet that enrollment criteria, i.e., sitting, never walked. And also the delay in initiating the STRENGTH study talking about the second half of next year relative to the imminent initiation of STEER. So just a bit of color on the rationale for that would be helpful.

Yes. So for the STEER study, we're looking at patients who are aged from 2 to 18 years old. And as we move forward, I think you were asking about the patients who can or cannot walk. We don't have that criteria for -- inclusion criteria as we move forward. It's just the type 2 patient population that we're looking at. So I think as we move forward for STEER, that's the population.

I think he's asking about sitting.

Sitting. We don't have that specific criteria that I believe in terms of the inclusion criteria. Just the type 2 patient population that we're looking at. I forgot the second part of your question that you asked. Was it around the start of the...

Start of STRENGTH.

The STRENGTH study in the second half of next year. As we move forward, we're very close to the end of the year. We're having discussions with the health authorities. So having start of the study in the middle of the year actually is quite fast in terms of making sure that we get health authority feedback moving forward and allowing us to recruit at the sites for the single-arm study. So with that, I think we'll wrap up the neuroscience section. And we'll take a -- we'll start at half past, in about 15 minutes. So thanks, everybody.

Thank you. [Break]

Welcome back to the Novartis R&D Day 2021. We will now continue with the oncology session. [Operator Instructions] I would now like to hand over to Jeff Legos, Global Head, Oncology Development Unit. Please go ahead.

Next slide, please. Hi, everyone. I'm incredibly honored and privileged to be here with everyone today to share an update on our overall oncology strategy and our oncology R&D pipeline. We have been continuing to build a leading oncology pipeline now with more than 30 new molecular entities in clinical development and about 80% of them are actually first in class or first in indication across our 4 major platforms. I'm also incredibly proud of the significant progress that we've made in 2021 to advance our late-stage pipeline. In particular, we have achieved 7 major submissions and 9 key data readouts. In terms of our strategy, we remain focused on developing differentiated medicines and advancing our innovative R&D platforms to provide definitive therapy for patients as well as to provide meaningful impact in terms of their outcome. In terms of our focus going forward, we want to continue to expand our opportunities for our key growth products by strengthening our core in 3 major areas. The first is leveraging our deep expertise and global scale to focus and prioritize our development on 5 core disease areas. Secondly, to expand opportunities for our leading growth medicines by advancing them into new indications of high unmet medical need as well as into earlier lines of therapy, ultimately with curative intent. And lastly, to really integrate our R&D expertise to accelerate our highest and most promising medicines to patients as quickly as possible. And on average, we believe our seamless clinical development plans can shorten development life cycles by about 2 to 3 years. Our focus today is on a few assets that we believe really highlight our oncology strategy, demonstrate our ability to execute our clinical pipeline, and then, lastly, show our continued focus around scientific innovation, novel combinations and advanced therapy platforms. Slide 131, please. Kisqali is a great example of a very comprehensive development plan and robust life cycle management strategy where we have developed this medicine in several indications as well as in earlier stages of breast cancer. This has enabled us to develop and deliver one of the most rigorous bodies of evidence. And based on the robust data package that has been generated to date allows us to position Kisqali as a standard of care CDK4/6 inhibitor. In terms of 2021, we've had several notable achievements, in particular, key Phase III overall survival data readout from MONALEESA-2 in first-line postmenopausal HR-positive, HER2-negative breast cancer and significant progress in our adjuvant breast cancer trial, NATALEE, where we have completed enrollment of 5,100 patients earlier this year. Kisqali has the potential of treating and making the impact on the broadest most population of HR-positive, HER2-negative breast cancer, and data from our ongoing NATALEE trial is expected by the end of 2022 or will have approximately 1 decade left of patent life. Next slide, please. HR-positive, HER2-negative breast cancer represents one of the largest segments in breast cancer. Approximately 70% of the population is HR positive and HER2 negative. About 1/5 of these patients ultimately have metastatic disease, and that's really been the primary focus of the MONALEESA program. We've enrolled 3 pivotal Phase III trials with more than 2,500 patients, and we've demonstrated significant improvements in progression-free survival and overall survival while maintaining or improving the quality of life. Unfortunately, better interventions are needed for patients who are diagnosed with early breast cancer, where approximately 80% of patients are diagnosed in these earlier stages. Ultimately, we believe Kisqali has the potential to impact even more patients by earlier intervention based on the robust data package of overall survival and quality of life. Next slide. In terms of our data from the MONALEESA program, Kisqali is the only CDK4/6 inhibitor that has been able to demonstrate significant overall survival benefit across not one, not 2, but 3 Phase III clinical trials, regardless of endocrine therapy partner, line of therapy or menopausal status. If you look at the figure on the left-hand portion of the slide, what you could see is that, on average, Kisqali plus endocrine therapy can deliver meaningful improvements in survival and allows patients to live between 4.5 to 5.5 years with metastatic breast cancer. If you compare this to traditional endocrine-based monotherapy, you see that, on average, Kisqali adds about 1 additional extra year of life for these patients with metastatic disease. If you look on the right-hand side, you see that there is a very consistent hazard ratio, representing a 23% to 29% reduction in the risk of death across these 3 Phase III pivotal trials. Next slide. So in addition to the overall improvement in survival, I think what has been very unique and remarkable about Kisqali is the ability to maintain or improve the overall quality of life. What is not shown on this slide here is the actual significant both physical and emotional benefits of enabling patients to delay or avoid chemotherapy for a prolonged period of time. On average, patients were able to delay or avoid chemotherapy for at least 4 years, which represents 1 additional year of improvement versus endocrine therapy alone. Patients do report adverse events when they're receiving Kisqali, but of particular note, these adverse events are often asymptomatic, transient and reversible and does not impact their quality of life. We believe that these product attributes around improving overall survival as well as enhancing quality of life and quality of survival are key aspects that allow us to have confidence to take this into an adjuvant trial in earlier breast cancer. Slide 135, please. In terms of our approach for adjuvant breast cancer, this is our Phase III trial called NATALEE. It's a study that's being enrolled in patients with stage II and stage III intermediate to high-risk breast cancer. 5,100 patients have been randomized to date and stratified on the basis of menopausal status, of prior neoadjuvant, adjuvant chemotherapy, geographic region and anatomic stage. This trial is actually quite unique for 3 main factors. Firstly, it is the broadest adjuvant patient population that includes about 60% of high-risk breast cancer patients and 40% of intermediate breast cancer patients. We also have the longest treatment duration of 3 years versus 2 years in other adjuvant breast cancer trials, which we believe is important because it will cover the entirety of the period of highest risk for patients to relapse. And then lastly, we have chosen to go with a lower dose of 400 milligrams because we believe that we can maintain the high level of efficacy that Kisqali has demonstrated, in addition to minimizing any adverse events. We've made significant progress in 2021 by completing enrollment by reaffirming our primary endpoint with health authorities with a focus around invasive disease-free survival. And then, lastly, we've seen a very low discontinuation rate well within the estimated expectations at the time of study design. Next slide. On Slide 136, I'm going to shift gears to Lu-PSMA-617. This is our first-in-class differentiated medicine from our RLT platform that targets prostate cancer patients, where approximately 80% of them express the PSMA antigen. I think 2021 has been a great year in terms of pipeline execution, with several notable achievements and milestones. Of note, the VISION Phase III trial successfully reported out earlier in the Spring of 2021 and those results were featured at both ASCO and ESMO earlier this year and subsequently published in the New England Journal of Medicine. In terms of the additional highlights that had occurred, so the FDA has granted us breakthrough therapy designation on the basis of those trial results. We have successfully completed submissions in both the U.S. and Europe and global submissions around the rest of the world are ongoing, and the FDA has granted us priority review with expected approvals in 2022. And then lastly, we've made significant progress advancing our life cycle strategy by starting up 2 Phase III clinical trials in earlier lines of metastatic castrate-resistant or hormone-sensitive prostate cancer. Next slide. So on Slide 137, I just want to focus on the unique mechanism of action for Lu-PSMA. By having this distinct mechanism of action, it allows us to specifically target PSMA, which is highly expressed in more than 80% of prostate cancer cells. Our approach with this lutetium-based radioisotope is one of delivering high-dose beta-emitting particles directly to cancer cells where we could disrupt the DNA, ultimately triggering cell death and sparing the healthy surrounding normal tissue. Slide 138, please. Prostate cancer represents one of the second most common diagnosed cancers in men. And when diagnosed early, and with good prognosis, there are definitive therapies such as radical prostatectomy or androgen-based therapy following radiation. Unfortunately, a high unmet medical need remains for patients whose disease recurs, metastasizes or ultimately stops responding to first or next-generation androgen-based therapy. In terms of outcomes for patients, once they've exhausted all standard of care therapies, their 5-year survival is reduced to less than 30%. And on average, these patients are only living about 10 months. This is exactly the patient population that was studied in the VISION Phase III clinical trial. Slide 139, please. In terms of the key data that was presented by Dr. Mike Morris earlier at ASCO this year, here, we show on the left-hand side of the slide, a Kaplan-Meier survival curve that shows clear separation of the curves as early as 2 months and that separation does remained throughout the entire duration of follow-up. You see a very impressive and clinically meaningful hazard ratio of 0.62, which represents a 38% reduction in the risk of death and an improvement in median overall survival of 4 months. On the right-hand side of the slide shows the overall tumor stasis as well as beta toxicity, representing a 60% reduction in radiographic progression-free survival, an improvement of over 5 months in terms of median progression-free survival improvements. What is not shown on this slide is the actual quality of life benefits that Lu-PSMA has been able to achieve. And the data that was presented at ESMO showed a 55% reduction in the risk of QoL worsening as well as pain worsening. Collectively, the QoL benefits as well as improvements in overall survival and radiographic progression-free survival highlight the importance of evaluating this in earlier lines of therapy. Slide 140, please. There's also a strong scientific rationale to explore this in earlier lines of prostate cancer. PSMA continues to be expressed at a differential level anywhere from 100 to 1,000 fold in earlier stages of disease. And secondly, we believe that we could get good synergy with the existing standard of care because the literature actually reports that androgen pathway inhibition actually increases PSMA expression by about 50% higher. And because there's a nonoverlapping safety profile in patients in earlier lines of setting are even healthier with less compromising of their bone marrow, we believe that this is going to be an adequate treatment for patients in earlier stages of disease. Next slide. Our overall aim is to continue to expand the opportunity and expand the value of Lu-PSMA by increasing it to more and more patients in earlier lines of therapy. If you look at the epidemiology chart on the far left of the slide, our current patient population in the metastatic castrate-resistant prostate cancer represents an annual incidence of about 60,000 patients. If you look at the 2 new Phase III clinical trials, PSMAfore, which is the pre-taxane study, and PSMAddition, which is our metastatic hormone-sensitive prostate cancer patient population, you see that this enables us to reach about 4x as many patients. In addition to that, we're looking to further expand the opportunities into earlier stages of disease, such as the non-metastatic castrate-resistant prostate cancer as well as the biochemically recurrent patient population. Next slide. So if we look at the overall opportunity of how we are building out our prostate cancer radioligand therapy pipeline, as you could see, we've already successfully achieved regulatory submissions from the VISION trial. We've established a comprehensive and robust life cycle management strategy to move this into earlier diseases. We are evaluating different radioisotopes such as alpha emitters, and currently exploring novel peptides as well as different radioligand imaging agents that potentially may increase their availability compared to gallium-based imaging. Next slide. Just shifting gears to hematologic malignancies. I want to highlight sabatolimab, which is our potential first-in-class immuno-myeloid therapy that binds to TIM-3, a target which is expressed in both immune cells and leukemic stem cells. Based on the unique target expression as well as early clinical data, we have accelerated the clinical development of this molecule from Phase I into definitive registration directed trials in both MDS and AML. Slide 144, please. So in terms of the diseases of interest, we are exploring this in both MDS as well as AML, where we believe these are complex disorders driven by 2 major characteristics. First is the immune system dysfunction, and secondly is around leukemic stem cell proliferation, both of which contribute to limited durable benefit using the existing standard of care. Unfortunately, these diseases have seen limited innovation over the last 15 years, and there's a high unmet medical need where survival averages between 12 and 15 months for this patient population. Slide 145, please. This slide just highlights as to why we believe this dual mechanism of action can potentially benefit patients with MDS. We hypothesized that by binding TIM-3 on the immune cells, we could enhance the immune activation in phagocytic killing of the leukemic stem cells and blast. And by targeting TIM-3 signaling directly, we believe that we could block TIM-3/galectin signaling around the self-renewal around the leukemic stem cells themselves. Can we go to Slide 146, please. We actually have some very exciting new data that's being presented at the upcoming ASH meeting next week. This further confirms the safety and tolerability and combinability of sabatolimab with the hypomethylating agents. We've actually shown very durable responses in this patient population and has some very innovative biomarker work using single cell R&E that actually confirms or reaffirms our hypothesis that blocking TIM-3 really focuses on enhancing and affecting leukemic cells, dendritic cells, myeloid cells and NK cells. We go to the last slide, Slide 147. I want to talk about how collectively the safety profile, this very unique mechanism of action as well as the early and durable clinical data has afforded us to believe that this could be a potential backbone combination across multiple disorders. Our primary focus has been on high-risk MDS, and we've set up 2 registration-directed trials. One of which is Phase II and then a subsequent Phase III trial, which is randomized and has a primary endpoint of overall survival. Subsequently, we have invested in a robust life cycle management program looking at higher-order combinations as triplet-based with venetoclax as well as looking at novel in-house combinations that would allow us the opportunity to not only expand into the earlier lines of therapy, but also into additional disease indications. So as you could see, we've actually accelerated and expedited our development in the registration-directed trials. We've set up a robust combination-based program, and we're looking forward to the earliest submissions being in 2022 and 2023. With that, I would like to turn it over to my good friend and colleague, Dr. Alice Shaw, who will take us through some of the new and emerging exciting molecules in our portfolio. Alice, over to you.

Thanks, Jeff. Next slide, this should be 148. So as Jeff said, we're going to switch now to earlier programs in our oncology portfolio, starting with JDQ443, which is our G12C inhibitor. Next slide. So I don't think that lung cancer or KRAS G12C need much introduction. But just as a reminder, KRAS G12C mutations are found quite commonly in non-small cell lung cancer occurring at about 13% of cases. In addition to lung cancer, G12C mutations are also found in about 3% to 4% of colorectal cancers and at lower frequency in other solid tumors. Now already in the clinic, there are multiple G12C inhibitors, including Amgen's sotorasib, which was recently approved for previously treated G12C non-small cell lung cancer, and Mirati's adagrasib, which has FDA breakthrough therapy designation. Both of these agents have demonstrated convincing activity in the clinic. As you can see here, sotorasib has a response rate of 37%, median progression-free survival of 6 to 7 months. So while these agents have defined a new standard of care for G12C in lung cancer, I would argue that as a thoracic oncologist, this level of efficacy is somewhat modest, especially compared to other targeted therapies that we routinely use in the clinic for other targetable subsets of lung cancer. Next slide, to slide 150. So why is efficacy more limited with G12C inhibitors in G12C mutant lung cancer? While we know that at baseline, these cancers, which are primarily found in patients with a smoking history, are more genomically complex than other oncogene-driven subsets, with frequent co-occurrence of mutations and higher tumor mutation burden, or TMB. And this creates then fertile ground for the selection and/or acquisition of resistance alterations. And in fact, several recent studies have now suggested that resistance to G12C inhibitors not only emerges early, but is often polyclonal. As you can see here on the left, this is the first report of acquired resistance to adagrasib. And this patient responded to adagrasib for 4 months, but then had progressive disease. And at this time, ctDNA revealed 10 different genetic alterations, including a secondary KRAS mutation in the switch-II pockets, several activating NRAS mutations, a BRAF V600E mutation and several MEK-activating mutations, all leading to reactivation of the MAP kinase pathway. Subsequently, 2 series have now been published, one on resistance to adagrasib shown here on the right, and one on resistance to sotorasib. And in both studies, again, they showed that resistance to G12C inhibitors is mediated by a diverse array of resistance alterations, sometimes multiple mechanisms within a single patient and including KRAS mutations as well as additional alterations that lead to RAS/MAP kinase reactivation. Now in the coming months, we're going to learn more about G12C inhibitor resistance, but I think these early data do help us understand the relatively short-lived benefit of G12C inhibitors and really highlights, I think, the need for combination strategies that can overcome and maybe even prevent the reactivation of MAP kinase signaling. Next slide, Slide 151. So this brings me to JDQ443, which is our G12C inhibitor, which entered the clinic earlier this year. JDQ is an oral, selective and covalent G12C inhibitor that is structurally unique and makes distinct interactions with the switch-II pocket. Like sotorasib and adagrasib, JDQ irreversibly traps KRAS G12C in an inactive GDP-bound state. In the preclinical studies, we've shown that JDQ potently inhibits G12C-mediated signaling and proliferation and induces -- my slide just disappeared. And then induces dose-dependent antitumor activity across many different G12C-driven PDX models, 2 of which are shown here. And with efficacy that's comparable to other clinically available G12C inhibitors. Next slide, Slide 152. And so based on these preclinical findings, we've now launched the Phase I first-in-human study of JDQ443, called KontRASt 01. And here, we're focusing on single agent JDQ and 3 key JDQ combinations: JDQ plus TNO155, our SHP2 inhibitor; JDQ plus tislelizumab, our PD-1 inhibitor, and the triplet combination of JDQ, TNO and tisle, all in G12C-driven cancers. Now I'm going to return to the scientific rationale behind JDQ and TNO in the next section. For JDQ tisle, there's preclinical data showing that G12C inhibition increases T-cell infiltration and activation, and of course, clinical data showing that G12C-mutant lung cancers tend to be PD-L1 positive to have higher TMB and that they can respond to checkpoint inhibitors. And so I think strong rationale for these combinations. We're currently enrolling into a single-agent JDQ and JDQ TNO and we plan to open JDQ tisle first quarter of next year. Now the first clinical data from this trial will be presented in an upcoming congress first half of next year. But I can say that so far, the emerging data in terms of PK exposure, safety and early efficacy are really encouraging, and we're really excited about the potential for JDQ to differentiate, particularly with regards to combinability. And this could be a real competitive advantage given what we now understand about resistance to G12C inhibitors. Next slide, slide 153. So in addition to KontRASt 01, we have several additional studies with JDQ planned, as you can see here. So in our last third quarter call, you heard that we are planning to launch a pivotal Phase III study of JDQ in previously treated G12C-mutant non-small cell lung cancer. This is KontRASt 02, which will have FPFV first half of next year. In addition, beyond the combination that I already mentioned in the first-in-human study, we're exploring multiple other JDQ combinations in a platform study, KontRASt 03, in patients with G12C inhibitor naive and G12C inhibitor pretreated disease. And here, we're going to leverage many of our own internal MAP kinase assets. FPFV for this platform study is planned for middle of 2022. But ultimately, our goal will be to expand JDQ into the frontline G12C-mutant lung setting. And here, the exact strategy will be defined based on the emerging data from these studies. Next slide, Slide 154. So we're going to shift now to TNO155, which is our first-in-class SHP2 inhibitor. Next slide. So I had last review TNO155 at our post ASCO event about 6 months ago, and so I'm going to very quickly walk through this background. So just to remind you, SHP2 with the protein tyrosine phosphatase that links upstream activated RTKs to the RAS/MAP kinase pathway. SHP2 has also been shown to be a downstream transducer of PD-1 signaling in T cells, leading to suppression of T cell-mediated immune responses. So many important roles for SHP2 in the tumor and the tumor microenvironment and many potential therapeutic opportunities for SHP2 inhibitors in combination with targeted therapies and immunotherapies. Next slide. So one of the key TNO combinations that we've already started to explore is with G12C inhibitors. In preclinical studies, we and others have noted very strong synergy between G12C and SHP2 inhibitors in G12C-driven cancers. The mechanistic rationale for this synergy is summarized here and centers around the ability of SHP2 inhibitors to enrich the GDP-bound form of KRAS G12C, which is the target of current G12C inhibitors as well as SHP2 inhibitor-mediated suppression of feedback activation of RAS/MAP kinase by G12C inhibitors. So 2 very distinct mechanisms that together drive the strong synergy between G12C and SHP2 inhibitors. Shown on the right, our internal data illustrating this synergistic interaction. And here, you can see that across 4 different PDX models of G12C mutant non-small cell lung cancer, the combination of G12C and SHP2 inhibitor as shown by the red lines, show greater antitumor activity compared to either single agent. Next slide. And beyond combinations with G12C inhibitors, there are multiple different opportunities for TNO, including in other oncogene-driven cancers. And shown here on the left is a depiction of the major classes of resistance mechanisms to targeted therapies, highlighting secondary alterations in the target so-called on-target resistance as well as bypass alterations or off-target resistance that lead to downstream pathway reactivation. Now over the years, we've done a fantastic job in overcoming on-target resistance. But in fact, the consequence of having more potent pan-inhibitory kinase inhibitors is that we're now shifting resistance towards more off-target mechanisms. And as you can see on the right, off-target mechanisms now drives the majority of resistance to third-generation EGFR and ALK inhibitors. And based on preclinical studies, we know that a majority of these off-target pathways may signal through SHP2 and so co-targeting SHP2 could be broadly effective in overcoming and maybe even preventing resistance to next-generation targeted therapies. Next slide. And so at ASCO this year, we shared data from our Phase I first-in-human study of TNO in advanced solid tumors. As you can see here on the left, we've explored many different dose levels of single-agent TNO, also many different schedules of TNO. And since ASCO, we have defined a recommended dose for expansion, our RDE for single-agent TNO at 60 milligrams once daily on a 2-week on, 1-week off schedule. Consistent with preclinical studies, TNO demonstrated very favorable PK, and we also showed evidence of PD or target inhibition in on-treatment biopsies. And importantly, in the study, we showed that TNO has a very manageable safety profile, you can see here on the right, mostly low-grade AEs. So overall, very reassuring safety, also a very thorough dose exploration, schedule exploration that is now enabling P&L combinations. Next slide. So on Slide 159, I summarize the various TNO combinations that are now in the clinic. I'm not going to go through each of these, but just to highlight a few. In the first-in-human study, we are testing the combination of TNO with our third-generation EGFR inhibitor nazartinib in patients with EGFR-mutant lung cancer who have become resistant to the third-generation EGFR inhibitor osimertinib. In a separate study, we're testing the combination of TNO with a PD-1 inhibitor as well as TNO with our CDK4/6 inhibitor in different KRAS mutant settings. And in the bottom 3 roads, you can see that we're testing TNO with G12C inhibitors, our own JDQ, also Mirati's adagrasib and Amgen's sotorasib. And here, this is, of course, based on the preclinical synergy and really with the goal of enhancing the depth and durability of responses to the class of G12C inhibitors. Next slide. So in addition to JDQ and TNO, we have a number of other assets in our MAP kinase pipeline, which really should enable innovative and impactful combination. So as you can see here, we now have small molecules targeting almost every step of the MAP kinase pathway from KRAS to SHP2 to BRAF and CRAF, MEK and ERK. I've already reviewed the multiple JDQ combos and TNO combos that we're planning are already in the clinic. We also have several different combinations with our BRAF, CRAF dimer inhibitor, LXH254 planned in different settings. And we also have multiple different triplet combinations of MAP kinase agents planned in a platform study for BRAF V600 mutant CRC. And then last but not least, we have recently advanced our YAP/TEAD inhibitor, IAG933, into the clinic with FPFV for the first-in-human trial this past October. YAP/TEAD is a downstream transcriptional complex in the Hippo signaling pathway, and several lines of evidence suggest that they are overlapping target genes and crosstalk between the Hippo and MAP kinase pathways. And in the setting of resistance, YAP has been shown to function as a survival input, promoting resistance to targeted therapies, including RAS and MEK inhibitors. So in the first-in-human trial will focus on single-agent IAG and cancers with Hippo pathway alterations, but we're quite excited about the potential to bring IAG combinations into the clinic for a variety of different cancer indications. Next slide. So this is Slide 161, and I'm going to switch gears and has some targeted therapies to CAR-T therapies and specifically to our new CAR-T manufacturing platform T-Charge. Next slide. So I should note that this is the first time that we've disclosed this new platform. And I'm going to say somewhat high level because many more details are going to come in just about 10 days at ASH. But briefly, T-Charge was internally developed at NIBR and is a novel expansion less CAR-T manufacturing process. This process is much more rapid than traditional manufacturing, with a process time of less than 2 days from receipt of cells to formulation of the product. And as noted here, with T-Charge, CAR-T cells expand in vivo within their natural environment after infusion into the patients, in contrast to traditional manufacturing, which typically involves 5 to 10 days of ex vivo expansion before infusion into the patients. Now as a result, T-Charge allows us to infuse 10 to 50 fold fewer CAR-T cells compared to traditionally manufactured CAR-T therapies. But perhaps the most important advantage and key differentiator is that this rapid T-Charge process preserves T-cell stemness, which has been associated with enhanced expansion, prolonged persistence and greater antitumor activity. Shown here on the right are preclinical studies where you can see that CAR-T cell is manufactured by T-Charge, retain a much higher proportion of naive or stem cell like memory T cells compared to traditionally manufactured CAR-T cells, which consists mainly of more differentiated central memory T cells. Next slide, 163. So to date, we have advanced 2 CAR-T programs manufactured on T-Charge into the clinic, YTB323, which is our rapid CD19 CAR-T, and PHE885, which is our rapid BCMA CAR-T. YTB is currently in Phase I testing for B-cell malignancies, including DLBCL and adult ALL. As noted here, YTB uses the same CD19 CAR transgene and lentiviral vector as Kymriah. However, as you're going to see on the next slide, because of the different manufacturing process, YTB does appear to be differentiated in terms of both potency and efficacy, if you can return back to the previous slide, 163. On the right-hand part of Slide 163, I've shown PHE, which is also currently in Phase I testing for multiple myeloma. And here, the PHE CAR consists of a fully human, highly-potent, anti-BCMA scFv with a 4-1BB co-stimulatory domain. And here, we also believe PHE will differentiate from other BCMA CAR-Ts given both this novel CAR construct as well as a novel T-Charge manufacturing process. Next slide. So on Slide 164, you can see the early data that will be presented from the Phase I study of YTB. This will be an oral at ASH. And what I'm showing here is just the data was -- that was in a published abstract. The data, of course, is updated for ASH, and we'll have additional patients and longer follow-up. But here, you can see that we are focusing on the cohort of patients with relapsed/refractory DLBCL. At the time of abstract submission, we had data on 14 patients treated in the first 2 dose levels. And as you can see, all the patients treated in the second dose level, 12.5 million cells, have responded to treatment with a CR rate of 75% at 3 months. Reassuringly safety of YTB is also very promising. The preliminary safety profile looks quite similar, if not better than that of Kymriah. And then what's not noted here is that we've also been able to confirm that because of the T-Charge manufacturing process, YTB does, in fact, have enhanced T-cell stemness based on flow as well as RNA-seq. Next slide, Slide 165. Similarly, for the Phase I study of PHE, data looks very promising, and shown here are the data from the abstract that's been published, but the data has been updated for the ASH presentation. As you can see here, of the first 6 patients infused with PHE, all 6 achieved a clinical response at 1 month. MRD was evaluable in 3 of these patients at 1 month and all were MRD negative. The safety profile of PHE is still emerging, but so far, we're seeing the expected cytopenias and CRS. And again, as with YTB, we've been able to show that because of the T-Charge manufacturing process, we are preserving T-cell stemness in the final product. And with PHE in particular, we're seeing remarkably robust cellular expansion, which is very encouraging. So you're going to see many, many more details on both the preclinical and clinical aspects of PHE and YTB at ASH. And so I would encourage all of you who are interested to attend those ASH presentations. But I would close by saying that we're very excited about this new T-Charge platform, about the early data so far with both YTB and PHE and really about the potential for T-Charge to serve as the foundation for all of our future next-generation CAR-T therapies at Novartis. So with that, I will invite Jeff and Jay to join me, and we can open Q&A.

[Operator Instructions] We have the first question coming from the line of Laura Sutcliffe from UBS.

Just going all the way back to Kisqali, could you give us some color on the changing script patterns you've seen and mentioned since your last OS data? I'm thinking forward to what might happen and sort of what level of persuasion is required for physicians if you get a good result from NATALEE.

Jeff did you hear that question?

No, I'm not sure that it came through. Can you repeat the question again, Laura?

Sure. Can you hear me now?

Yes, yes.

Okay. Just going all the way back to Kisqali, would you mind giving us some color on the changing use in script patterns that you see since your last set of OS data? I'm trying to think forward to what might happen and what sort of level of persuasion is required for physicians if and when you get a good result from NATALEE.

So I think the question was around script changes since the most recent overall survival data for Kisqali, if I heard you correctly. So I think in short, Laura, one, our prescriptions continue to go up, and we see increasing class within -- for Kisqali. The data was actually just reported at ESMO this year. So it is still continuing to make its way through the marketplace using sort of all digital engagement as well as sort of traditional engagement per se. I think what is really important about the Kisqali data is the continued consistent body of evidence that we've generated. And specifically, the most recent MONALEESA-2 data has generated the longest median overall survival in all of breast cancer, approaching 64 months, which we believe is very clinically meaningful very important for practitioners and very important for patients going forward. So we continue to sort of be confident in the data package. We continue to believe that the Kisqali scripts will continue to increase, and we are excited and awaiting the NATALEE Phase III readout in 2022.

Next question come from the line of Seamus Fernandez from Guggenheim.

So really, I just wanted to ask about your TGF-beta specifically? And what data or information you might be able to share with us regarding the move forward and perhaps when we might see it? So was there something with regard to response rate or any other endpoint data that drove the decision to advance that program?

Thank you for the question, Seamus. And I know I didn't talk specifically about the NIS793 or TGF-beta as part of my presentation, but we did include slides in the pre-read for anybody else that is interested. So I think first, in terms of our approach of moving it into Phase III, we know that pancreatic cancer remains 1 of the highest unmet medical needs across all of our oncology indications being explored. And we believe that TGF-beta plays a significant role in creating a very fibrotic stroma fibrous capsule within the pancreas in patients who are having pancreatic ductal adenocarcinoma. In terms of the evidence that we had to be able to advance it into Phase III, I would start by saying, first, the molecule is very well characterized in Phase I clinical trials. We get good pathway inhibition and suppression of TGF-beta signaling both in the periphery as well as in the tumor. We were able to be able to demonstrate a safe and tolerable dose. We did have some early clinical responses in combination with PD-1, but we believe that the real value and benefit from TGF-beta inhibition is going to come from removing that fibrotic nature and ultimately being able to sensitize chemotherapy and get more effective benefit from the gemcitabine and Abraxane combination. So it was really based on the Phase I data and the high unmet medical need and the strong scientific rationale to advance it into Phase III clinical trials. We have achieved our first Phase III clinical dose, and we are expecting data in and around 2025, and the primary endpoint is overall survival for that trial.

We have the next question coming from the line of Matthew Weston from Crédit Suisse.

My question is about sabatolimab, and you clearly laid out how excited you are about TIM-3 as a potential foundational therapy in myeloid disease. It's just very notable to me that many of your Hem/Onc competitors who also have experience with TIM-3 don't seem to be particularly excited. So I would just really love to understand whether there's something specific about sabatolimab that underpins your confidence or whether or not it's just that the competition has missed something.

Thank you, Matthew. I think a very good question. And I guess, firstly, I would sort of state that I think the solid tumor data to date has been fairly lackluster, and we haven't really seen any meaningful improvements in outcomes either as a single agent or in combination with anti-PD-1 therapy. I can't comment exactly as to why the competitors have not chosen to follow suit. But what I can reinforce is our belief in the very unique and dual mechanism of action based on TIM-3 expression as well as our very encouraging early and durable clinical benefit show during the Phase I clinical trials. I suspect as we continue to generate more clinical data that may give additional sort of reasons for competitors to opt in and to actually evaluate TIM-3 inhibitors in myeloid or hematologic malignancies. But for the moment, we remain sort of confident in our development plan, focusing on hematologic malignancies.

Jeff, if I could add. I think that's right. I mean at baseline, I derive very little of my enthusiasm from competitor enthusiasm. But whereas most of the field has been thinking about TIM-3 as a next-generation adjunctive checkpoint for solid tumors modulating the T-cell compartment, where there may be activity, but it's been quite limited to our experience. We may have contracts to consider TIM-3-directed monoclonal antibody therapy as a targeted therapy to a progenitor cell in the myeloid lineage. And we probably took this bet before many others have developed the clinical experience with that concept. Now in your hands, Jeff, it remains to be seen how this will play out alone in combination therapy, but we're very eager to see the outcome of this study.

We have the next question coming from the line of Graham Parry from Bank of America.

I've got 1 on NATALEE. You said you'd reaffirmed the IDFS pivotal endpoint with FDA, but FDA was also keen to see overall survival data for Verzenio from the MonarchE study during the filing cycle before it was approved. So do you think you also, in addition to IDFS, need to show separating overall survival curves for approval? And is that something you think can be demonstrated at the interim analysis at 70% of events would we have to wait for final data?

And it's a very good question. And I think the FDA has been fairly consistent in their advice around overall survival data in almost all adjuvant clinical trials. And in particular, the guidance that we were given and reaffirmed within the NATALEE breast cancer trial is IDFS is an acceptable and robust clinical endpoint. And the importance of showing no detriment in survival at the time of the primary analysis is an important piece of data that the FDA is looking forward to. In terms of your question around the data that would be available at the time of the interim analysis, I won't comment or focus on the interim analysis per se, but we will have a good amount of follow-up at the time that we expect our primary data by the end of next year. And we believe that we'll be able to suffice to be able to show what the FDA is looking for in terms of no detriment around survival.

We have the next question coming from the line of Mark Purcell from Morgan Stanley.

I was just interested in future combinations. You talked about the importance, particularly around your lung cancer franchise. With BeiGene, you get access to a RAF dimer in Phase II. Importantly, [ as stated ] in Phase III already in combination with tislelizumab in non-small lung cancer, but also BCL2 and a PARP inhibitor as well in Phase I, Phase II, respectively. So can you give us any thoughts at this stage in terms of how you're looking at potentially partnering some of those assets with tislelizumab collaboration with BeiGene with your own pipeline, particularly, I guess, in lung cancer, I'll be interested in your thoughts there?

Yes. I'm happy to start and maybe my starting point would just be to clarify what the agreement with BeiGene is. The primary collaboration with BeiGene centers around licensing tislelizumab in territories outside of China in a few select markets. We currently do not have any agreements or collaborations in place to access some of the other molecules within their pipeline. So in terms of our key focus, it is around tislelizumab and the emphasis is around combining tislelizumab with other innovative medicines within the Novartis pipeline. Alice had nicely highlighted our upcoming combination with JDQ443, plus or minus TNO155 in a Phase I lung cancer trial. In addition to that, we are also combining tislelizumab with our radioligand therapy product, Lutathera, in small cell lung cancer. And we've also set up a Phase II clinical trial in colorectal cancer looking at tislelizumab-based combinations with our TGF-beta inhibitor and standard of care chemotherapy in colorectal cancer. So that's our primary focus for now. But Alice, do you want to add anything on to...

No, I think you summarized it well, Jeff. And yes, we are exploring tisle across many combinations in our early portfolio. So it'll be hopefully an anchor for us to develop some innovative combinations and across many different cancer indications even beyond lung cancer.

And in terms of -- sorry, I was just going to ask just as a follow-up. In terms of the TIGIT Phase III, which will be combined with tislelizumab, would you not have access towards that combination as part of your global collaboration?

BeiGene is currently the regulatory sponsor for that ongoing clinical trial, and they are conducting it and that is not part of our licensing agreement with BeiGene.

We have the next question coming from the line of Steve Scala from Cowen.

Just generally speaking, what is Novartis' thinking or view of U.S. filings of drugs based on data generated largely in China? This is only tangentially relevant to tislelizumab, but tislelizumab really got very little attention today despite the large number of filings upcoming. So what should we conclude from both of those points?

No, thanks for the question, Steve. And one of the reasons why we didn't include it today is we wanted to really focus the presentation on some very select key assets that highlight our strategy, our pipeline execution. But notwithstanding, that doesn't minimize the importance or the relevance for us with tislelizumab going forward. I want to separate out what's going on in the public domain around kind of foreign data filings and some of the challenges or controversy with the FDA from the actual BeiGene collaboration around tislelizumab. So I think what is unique about tislelizumab is, firstly, there is about 15 registration-directed trials that are ongoing or already have reported out. Five of those have already reported out with positive Phase III clinical trial data, and we are very confident in both the safety and the efficacy of the clinical data that we have seen thus far. Of those 15 clinical trials, about 60% of them have actually been global clinical trials, meaning that they have enrolled patients outside of China or outside of Asia. And to date, about 3,000 patients outside of China and Asia that have been treated with tislelizumab. In terms of our approach with the FDA, as you've seen with our press release, we have actually officially submitted and garnered FDA acceptance of the file with a standard review for tislelizumab in second-line esophageal cancer, and we continue to have discussions with health authorities around the world regarding our overall filing strategy for the subsequent indications.

We have next question coming from the line of Simon Baker from Redburn.

It's on JDQ. If we look at sotorasib and adagrasib, they're structurally fairly similar, whereas JDQ has a very different structure and quite an unusual scaffold. I just wondered, does that confer any differences in terms of binding that could lead to differentiation? And also coming back to the point about synergy with SHP2, there was a paper out recently suggesting that the resistance to sotorasib is HER2-mediated and that can be overcome by co-targeting with SHP2. So is that an additional synergy benefit over and above the mechanism that you discussed? I just wonder what your thoughts are on that and its relevance to JDQ?

Thank you for a chemistry question. Would you indulge me and let me answer that one? You take the synergy question. As a chemist I can't resist. I really appreciate you noticing and caring to notice -- We're actually quite proud of our Discovery Chemistry unit, which remains really one of the most productive in the industry, that the discovery of a novel fragment that engages the mutated cystine in G12C really opened the door to our developing a highly differentiated molecule. As these medicines as a class target acquired alteration and there's this essential G12C, the cystine, the on-target effects of these medicines might be expected to be equivalent provided that adequate exposure to be achieved. But the structurally dissimilar core can, and for many other targeted therapies has provided an opportunity for differentiation on pharmacologic behaviors and off-target effects. And Alice alluded to this in your presentation, Alice, that as this mounting clinical data rises, we can ask the question, does the chemical dissimilarity of this medicine combined with its remarkable pharmacologic properties allow for differential off-target effects and potentially better combined ability. We don't have the answer to this today, but we do believe to your question that the chemical novelty is a strong reason to believe. Alice?

Thanks, Jay. I completely agree. And just to follow up on the question around synergy. As I mentioned, we are quite excited about the potential for combining JDQ with TNO because of the strength of the mechanistic rationale there. And as you mentioned, there's now emerging data around all of the different mechanisms that can drive resistance to G12C inhibitors. You mentioned HER2, but we've also seen EGFR, the potential RTK driver of resistance. And then, of course, there's other ways to activate the RAS/MAP kinase pathway. I highlighted some on-target RAS alterations as well as even downstream alterations. But I think you're very right in honing in to HER2. And I would say the RTK-mediated resistance to G12C inhibitors, that is what we hope to be able to target by combining our SHP2 TNO155 with JDQ.

Well, thank you all for these questions. We're going to -- thank you. And I will give the last presentation around the NIBR platform. Jeff, Alice, thank you so much.

Thanks, Jay.

All right. Well, I have so enjoyed this event. It's a pleasure to speak with all of you about our discovery and early development engine here at NIBR, where we're calling from. So my colleagues has been really rewarding to hear your enthusiasm for so many of these homegrown medicines, iptacopan, remibrutinib, ligelizumab, ianalumab, branaplam, Scemblix, sabatolimab, TNO, JDQ, YTB, PHE and of course, our growth drivers, Cosentyx, Entresto and Kisqali. We're proud of this challenging work to invent and innovate definitive medicines for life-threatening diseases. And we do aspire to be a rarefied entity in the pharmacologic ecosystem, a creative productive and maybe most impactful in the fullness of time R&D organization. But we're not prideful. As this work is humbling. Next slide, please. Creative and requires an equal passion for working together through partnerships. Next slide, please. So over the past 5 years, we've worked to focus our internal research as well as our external research investment around 6 aligned therapeutic areas with the core ambitions of Novartis as a global organization as well as 5 therapeutic platforms, which I'll speak to today. We call this the game board on the 6 disease areas and the 5 platforms. We have reduced the focus of our portfolio as shown from 460 drug-hunting programs to 270. And through this exercise of ruthless prioritization over the last 5 years, we've taken some, I think, really brave choices about where to focus our intellectual and our financial investment. We've placed outsized emphasis on being first because it still matters in the ultimate commercialization of the medicine. This means, first, to target, first to challenging targets as well brave investments in new modalities as I'll speak to. And together with our development colleagues, in truth, we've markedly increased the value of the early and mid-stage pipeline, it's eNPV, despite having a reduced number of programs. And this is humbly work, but our, perhaps, greatest asset are the human, the ambitious and talented leaders we bring to this research. Next slide, please. Today, I've been asked to speak to platform investments. And this term platform means different things to different people. I'll work to define it today. Here, we use the concept of a platform to be a therapeutic modality, a foundation, ideally a fountain of new and important medicines, and we have these 5 platforms, as shown in this slide here today. Now perhaps unique about the Novartis approach to platform research are 2 features. First, our use of the word platform is not aspirational. We are anergic to hype. Each platform, as shown, has in-market or near-to-market assets. This means we have soup to nuts capability from the reconsideration of a therapeutic modality all the way through to it's sometimes challenging global market access. This is especially true for low-molecular weight and biotherapeutics, which remain about 70% to 75% of our research portfolio, but importantly, applies to the emerging modalities as shown here. The second unique characteristic is this deep and committed expertise that we aspire to be opportunistic where appropriate, but really to look around corners to get viral gene therapy beyond Mendelian gene replacement to develop first principles for how radioligand therapies work and to direct them the tumors in new and interesting ways that perhaps this field has not considered. Soup to nuts, internal and external innovation led by committed experts and resource bravely to win. Next slide, please. I'll double-click on a handful of these platforms in the next 11 minutes. Our low molecular weight drug hunting engine is remarkably strong, and I think actually quite creative and, perhaps, doesn't receive enough attention. There's a lot of excitement around novel ways to approach even enzymes through allostery targeting nonactive sites. And I think that ABL001, now called Scemblix, is a wonderful example of how to anticipate and overcome resistance by inhibiting even kinases in a new and interesting way. We've taken this idea of allostery to, I think, new heights of molecular recognition with an example of an intramolecular glue. Here is TNO155, our SHP2 inhibitor, which actually locks a 3-domain SHP2 oncoprotein in an inhibited conformation, it's extreme allostery. And in discovery research, together with the University of California Berkeley as well as a big internal investment, we're mapping the ligandability of the whole of the human proteome with cysteine-hunting covalent fragments. This should open the doors to new drug discovery. As I mentioned previously, it did once before with JDQ and KRAS G12C. Next slide, please. Do expect to see many innovative medicines emerging from these platform investments that unlock previously intractable proteins. Targeted protein degradation is one such example that I'll talk a little bit about today as an example of a new characteristic of small molecules, the capacity to bring proteins into proximity molecular glues for the functional consequence of a target protein being degraded. Now I'm delighted that these new platform technologies represent a significant portion of our discovery and development pipeline. In total, in gene therapy, about 25 programs; in radioligand therapy, including discovery technologies and other 25; and in TPD, all told, 12 programs in 6 technology spaces. But I am relieved that still traditional biomolecules and small molecules remain the bulk of our portfolio. Because these new areas, while exciting, they're also very hard. Next slide, please. So to push a little deeper into the domains of some of these platforms. As Vas has shared, and surely, most in the room will now know that we had first innovated this idea of a chemical solution to targeted protein degradation. Small molecules, sometimes bifunctional that bridge the cell's garbage disposal system, the ubiquitin ligase pathway, with new target proteins that these machines didn't evolve to degrade. And as such, small molecules designed to be either bifunctional or to, in a ligand efficient way, glue proteins together and produce profound effects on target protein and stability. Next slide, please. This work is indeed no longer aspirational. A significant investment made in 2016 in internal research has been complemented by strategic partnerships that bring new methodologies to our internal chemistry and biophysics. We've recently announced 2 such collaborations, 1 with Dunad that has created a chemistry coming out of Canada that targets cysteine, so covalency, but curiously results in biophysical destabilization or degradation of target proteins. It could be linkerless degraders. And on the right, is a high throughput molecular biology capability from Orionis Biosciences that allows us to study a massively in parallel high-throughput fashion, the behaviors of molecular glues to potentially recruit new proteins. Next slide, please. I do look forward to medicines arising from these platforms entering our pipeline. I have a short list of the advancing programs listed here. Our protein degradation work is indeed in human clinical investigation in combination Phase IIa clinical trials for a previously intractable transcription factor of relevance to the biology of leukemia as well as immuno-oncology. But you can see that our investment in TPD is not restricted or limited to the space of cancer. Next slide, please. Compared to many in the ecosystem pursuing this chemistry, and I personally as a scientist in this domain for a while find it very exciting. The competition is so wonderful for patients, and it elevates the ambitions of our science. I do believe that the program we've built internally is differentiated in, again, just looking around the corner type of way. Most of the field has scurried around to degrade proteins that are actually already druggable on CAR or ER or certain kinases or bromodomain proteins, using this first-generation bifunctional chemistry. We made the investment to try to go harder at these molecular glues, bringing otherwise totally intractable proteins into the fold of target space. And we will see how this investment pays off as this set of molecules targeting gene control factors and other proteins plays out. Next slide, please. All right. I want to shift gears and talk about a second platform, which is radioligand therapy. The performance data of Lutathera and the emerging data around PSMA-617 is radioligand therapies for aggressive solid tumors really struck us at the time of early proof of concept as a change in gravity. Next slide, please. Moreover, we regarded this as a perfect opportunity for Novartis to get the science right around the pharmacology, but to take our Swiss chocolate, it's our ability to target proteins and tumor cells and combine it with this radioactive peanut butter from these 2 remarkable companies and now bringing these companies into our research institutes as integrated entities, we have a capacity to drug proteins typically on the extracellular surface of cancers or their microenvironment and deliver radioactive nuclides. We are building around this a state-of-the-art laboratory in Basel, have recruited top talent from [indiscernible] industry and have redeployed many of our targeting chemists and collaborations towards the pursuit of next-generation radioligand therapies. Next slide, please. It is both early days as well as exciting days. As many of these medicines are in clinical study, we start to become interested in how a PSMA-617 or other radioligands targeting prostate cancer might be better used in combination. And so leveraging the foundation of basic science in DNA damage repair and collaborations with experts as with RDOs, we are anticipating combination uses of radioligand therapies even in the earliest throes of discovery and translational research. With PeptiDream, we expand our capacity to target proteins through macrocyclic peptides, and we're bringing radioligand therapy back to the concept of biologics, which can be innovated so quickly and it's pharmacologic properties can be so well suited to radiotherapy delivery with our internal biologics discovery as well as 2 collaborations. So quite serious about radioligand therapy. Next slide, please. Our radioligand therapy research pipeline is shown on this slide, and you can please read it for yourself. We have, in total, about 25 discovery and development programs. And these are moving quite at pace because something that we've learned about radioligand therapy development is the capacity to do imaging studies very early in drug development, provides guidance better even than an ex vivo biomarker or immunohistochemical sampling to direct the therapy of a beta- or alpha particle-emitting therapeutic agent. Next slide, please. As you know, we are quite excited about the promise of AAV-based gene therapy as a potential definitive therapy for serious neurologic and ophthalmologic diseases. And Zolgensma, as described earlier in this presentation, is such a great example of this. But it turns out that the rules around AAV tropism, around payload design, around promoter construction, the imprecision of pharmacologic control with most constitutive promoters, each comprise problems to extend AAV gene therapy into new disease indications. And so now having the AveXis Discovery unit brought into NIBR and thoroughly reconsidered and align to our priorities, we take on each of these engineering aspects of AAV to imagine the next generation of gene therapy, perhaps with pharmacologic control like LMI switches recently reported by our group and Beverly Davidson in Nature magazine, perhaps with engineered AAV tropism to precisely direct AAVs to the tissue of pathologic interest, and most exciting, with bioengineered payloads, not just simple gene replacement. I find the early discovery pipeline very fresh and creative. Next slide, please. This work is -- cannot be and will not be done alone. There's such radical innovation in molecular biology, in the biotech sector, owing to the easy access of biomedical chimeric engineering and academia that we're privileged to work with real dyed-in-the-wool experts that, as with Dyno, deploy machine learning and evolutionary strategies to evolve AAV capsids. We've recently announced the acquisition of Vedere and Arctos to get optogenetic payloads, which I'll discuss in a moment, again, getting beyond gene replacement. And together with Sangamo, we're building artificial transcription factors that can turn pathologically silenced genes back on to restore function in neurocognitive and neurodevelopmental diseases. Next slide, please. I will say that AAV gene therapy is hard, and it's not for the faint of heart. And that at this moment, without highly tropic viruses, the capacity to deliver the medicine to the disease tissue is quite important. And so we have built in our ophthalmology disease area, a remarkable pipeline to address the big opportunities in inherited retinal diseases, such as RLBP1, as shown here, a clinical trial that is open, enrolling, going quite well, and we should have results early next year. This could be a restorative or potentially even curative to many patients suffering from vision loss, owing to, albeit rare, this form of retinitis pigmentosa. Next slide, please. But it turns out that the majority of patients who suffer blindness don't have this condition because of an inherited retinal disease or it's one of many different retinal diseases, but rather they have macular degeneration, wet or dry, age-related, and there, the loss of photoreceptor cells creates a challenge because just reintroducing the damaged gene or cell is quite challenging, if not even impossible. And so we imagine an optogenetic strategy where light-sensing proteins, natural or engineered, are reintroduced to remaining deeper cell layers to reprogram cells that normally transmit sight signals to receive sight signals and transmit them. It sounds like science fiction, but if these medicines can work in humans as they behave in preclinical model species, there is a capacity potentially to bring sight back to the blind. Next slide, please. Our gene therapy pipeline is shown here. I won't speak to each of these programs. We'll gladly take any questions. In addition to the in vivo treatment with AAV gene therapies, we also imagine a next generation of stem and progenitor cell therapies, and Alice, it was exciting for me to hear you present T-Charge for the first time. This is a technology platform just many years in the making to systematically redesign, but it means to be a CAR T-cell, so as to promote this stem-like earliest and longest-lasting stage of memory T cells. Next slide, please. I won't say much more about T-Charge, Alice, because you perfectly captured this. The early data to be shared at ASH, we really look forward to feedback from this investment, and most importantly, the medical science community. But it is fair to say that what we're seeing in terms of response data and durability of this therapeutic clone is an early validation of the concept of promoting T cell stemness to prevent T cell exhaustion and allow this living therapy to live, thrive and persist in patients' bloodstreams. Next slide, please. Vas made mention of our ambitions in RNA therapeutics. This is a very exciting time for RNA. And were we a vaccines company, we will be very excited, I'm sure, about messenger RNA therapy. We do indeed have some work in mRNA cancer vaccine therapy, led by Glenn Dranoff, a career investigator in cancer immunotherapy and vaccine work. We like to rather think that the siRNA capacities, the tropism of GalNAc conjugates for the liver, opens up new possibilities in liver diseases, diseases influenced by liver factors and also regeneration of the liver. But again, taking our Swiss chocolate of targeting other tissues, we believe there's an opportunity to bring siRNA to other tissues to discover and deploy the GalNAcs of the brain, the eye, the heart, the muscle. More on that in years to follow. Next slide, please. All right. Well, in closing, and I look forward to the Q&A. I do hope -- we hope that you've heard today a clarified and coherent strategy of an integrated serious innovative medicines company, that this early pipeline portends for beyond the growth profile shared by Harry Kirsch earlier in the presentations that we have a portfolio of medicines that stand to benefit patients for a long, long period of time. Thank you for listening, and I look forward to your questions.

[Operator Instructions] We have the first question coming from the line of Laura Sutcliffe from UBS.

I was not aware I was still in the queue. But I'll ask one on the T-Charge platform. It seems as though the -- your new T-Charge technology allows you to generate some efficiencies on the -- in terms of manufacturing and also possibly get some better efficacy results. Would it also be fair to say that this would allow you to make a more profitable product of financial efficiencies as well?

Yes. Thank you very much. We have learned the hard way through heroic actions in manufacturing, regulatory science, discussions with third-party payers all around the world, that there are limitations to being able to bring first-generation CAR-T cell therapy to all the patients in the world who may benefit. And so yes, thinking about this T-Charge platform as the definitive mode of bringing CAR-T cell therapy autologous, ex vivo CAR-T cell therapy to patients around the world, we have taken great strides to optimize the cost of goods as well as to streamline the manufacturing process so that this therapy can be better deployed all around the world. And this does open up the possibility for this being a really strong business as well.

The next question comes from the line of Matthew Weston from Crédit Suisse.

Jay, I was intrigued by your opening comments about -- and also Vas' opening comments about the value of products in the pipeline now growing. And if I look back anecdotally, it seems that quite often, Novartis pipeline assets came with a lot of promise, particularly driven by stacks of peak sales estimates, which started with a niche indication and then grew into mainstream. And what often happened was the niche made it to market, but the mainstream didn't. And I'm just interested as to whether or not moving forward, you continue to have that approach of niche first, blockbuster later or whether or not you've changed the strategy and it's blockbuster first?

Thank you very much. I can't and really would prefer not to speak back to the history of Novartis, not that you're asking me to do this. But it is clear that there's something very different about the way we approach research and development today. We do it with really clarified and I think very strong business fundamentals and integrated business ambitions. We have now really set the bar as to where medicines arising internally or acquired through partnerships must be for a company of our size. This is painful sometimes because we have small indications where we know we can make a big difference. And we sometimes push these molecules and ideas into start-up companies better suited to the small and well-resourced biotech community. I'd like to think that NIBR is becoming really one of the most business-savvy research organizations in the business. This remains to be seen. But I think that the work started together with Vas, and now importantly with John, to align our organizations on the expectations of the Novartis medicine and what sort of patient benefit married to what sort of business and growth opportunity it can bring has been very strong. Now this is not to say that we sometimes disagree about what can make for a great business or what the size or opportunity of the market might be. But we are today a much more streamlined and a much better aligned organization. And with this, we've seen a market increase in the EPV of the early mid-stage portfolio. I hope that answers your question.

We have our next question coming from the line of Simon Baker from Redburn.

Jay, you mentioned in gene therapy that there were 22 projects ongoing. I'm not going to ask you to name indications. But I wonder if you could just give us a broad idea of when we should expect to see some of these move into the clinic and then into filing in the market? And from what you were saying, it sounds like the reusability of viral vectors is probably not quite as straightforward as we once thought the idea that you could take the Zolgensma AAV9 and simply change the payload and you have another product. Is that the case? And is that affecting your time lines of how you expect those projects to evolve over the remainder of the decade?

Yes. Thank you very much. There have been incredible learning since we have integrated the AAV9 platform into NIBR and have gone back and asked some of the scrutinizing and scale questions about what AAV9 does and doesn't do, where AAV9 goes and doesn't go to transduce cells to deliver payload. Your first question is that among these 22 or perhaps even 25 programs, we expect even starting next year a steady stream of INDs and transition into the clinic through our internal research but also as well our appetite to partner [indiscernible] assets from the outside world. Our focus has been in ophthalmology where gene therapy Novartis really grew up, extending into neuroscience as well as in musculoskeletal diseases, respiratory diseases. And I see now in my leadership team real curiosity and interest even beyond those core disease areas. Your second question is a very timely and interesting one. We've recently uploaded actually this week to bioRxiv, a study that we've posted of AAV9 tropism, the first in the field that demonstrates and perhaps explains the efficacy of Zolgensma in spinal muscular atrophy with strong tropism and expression in lower motor neurons, but really the absence of strong expression of AAV9 in higher cortical structures, but for a small blush of expression in astrocytes. And this learning should be directional for many in the industry ourselves as well. Now we've worked to get this information out there to help the community as soon as possible. We have already, here in our laboratories, imagine and engineered the next generation of AAV gene delivery particles to target the tissues of interest to our own internal research. This is a field that is in one respect, mature. But in another respect, rapidly maturing through the use of robust and scholarly dispassionate methods that involve, in particular, preclinical models better predictive of the human condition like nonhuman primates as shown in our study. So very exciting time to practice gene therapy. But as always, a humbling experience in drug from discovery. Do expect a steady stream of INDs and clinical transitions from us, though, starting next year over the next many years.

We have the next question coming from the line of Emmanuel Papadakis from Deutsche Bank.

Perhaps I'll take a follow-up on the gene therapy topic actually. So just thinking about the toolbox is AAV9. I mean is that the ultimate future of the realm of gene therapy opportunity. It seems potentially other vectors could be desirable. And then in terms of getting to the stage where it sounds like you're prosecuting a more targeted approach in terms of engineering the capsid, when do we get to the state that we actually see design vectors, I guess, using that technology? And then just a bit more color on the phasing reversals in neuroscience. I mean we heard at Q3 -- with Q3 results, you reverse the Phase 1 project and we seem to now disappear completely from the pipeline table. A bit more color in terms of what's driven the decision to go back to the drawing board or indeed remove it from the drawing board would be helpful.

Thank you. As we're impatient to bring definitive benefit to the patients who may benefit from gene therapy, we first look to other natural viruses after AAV9 such as AAV2, AAV8 and other described and engineered and now partnered viruses. And so our ability to adapt to the AAV9 learnings is already well in play. Secondly, AAV9 is very active, and it does transduce certain tissues. And though this first report, we'll share some of the learnings from intrathecal AAV9, we have, it's fair to say, exhaustively characterized through multiple routes of administration, the tropism of AAV9 that continues to afford some therapeutic opportunities, although not all, that the field at large has been considered as we believe. Your second question is actually also quite interesting to me as to how will specificity ultimately be conferred. It won't just be through the capsid itself. It can also be through the promoter or regulatory region. This can allow you to mute expression in some tissues to then drive expression in tissues further. Regarding the Rett program, I can say in brief that, though we can go more deeply into it some time, that in weighing the totality of the preclinical evidence that we had where tropism was just one feature of that program, we chose to terminate this program to not bring it forward into human clinical investigation. The totality of the evidence but that program did not justify clinical investigation in humans of what would be a definitive therapeutic for those patients. All right. Thank you very much. And I will now turn it back to you, Vas.

Terrific. Thank you, Jay, and thanks to the colleagues in Cambridge for a great set of presentations. So we've come to the end of our R&D Day, and thank you all for staying with us as we've walked you through our R&D portfolio and gave you a sense of the power of the innovation that we have here at the company. I wanted to come back to the key takeaways before we close. I want to reemphasize, we have a clear strategy. We have outstanding talent that you've seen. We have clarity. We have conviction, always with humility, but also with tremendous ambition to deliver on our strategy as a focused medicines company and to stay a leader in this sector. Second, we believe we can drive an attractive growth profile. We have the assets in hand that we believe can outpace our generics and enable us to grow at, at least 4% or between 2020 to 2026 and above peer median beyond. Importantly, our strong portfolio that you've learned about today with over 20 medicines that we believe have blockbuster plus potential can fuel our growth in this next period from 2026 to 2030. And it's important to note, most of the medicines you've heard about, whether the in-line brands or in the pipeline, have LoEs that extend well into the 2030s, enabling us to be a company that can drive that consistent growth. And lastly, as you heard just now from Jay, we remain at the leading edge of science. In this industry, we have to remain at the leading edge of science. I believe we're doing that through our work at NIBR, through our investments in platforms. And in the long run, that investment, that capability that we're building consistently over time in platform technologies will enable Novartis to succeed, we believe, for decades to come. So thank you again for taking the time. We'll look forward to continuing the dialogue next year. We wish everyone a safe and healthy holiday season, and thank you again.

Ladies and gentlemen, that does conclude our conference today. Thank you for participating. You may now disconnect your lines. Thank you and have a very good evening.