Novartis further strengthens biologics capabilities in expansion of MorphoSys collaboration

Novartis AGNovartis has expanded its collaboration with the German biotechnology company MorphoSys to create one of the pharmaceutical industry's most comprehensive alliances focused on the discovery and development of antibody-based biologic therapies, the most successful and fastest growing class of biologics.

These treatments are based on monoclonal antibodies and are used to treat diseases that, in some cases, have been more challenging with "small molecule" approaches based on chemical substances.

Under this new 10-year agreement, which may be extended by Novartis for an additional two years, Novartis and MorphoSys will jointly discover and optimize antibodies against a significant number of molecular targets in a wide range of diseases. MorphoSys will also offer increased personnel support for these projects.

In addition, other than rights held by MorphoSys' current collaborations and access for MorphoSys' own internal use, Novartis will have virtually exclusive access to MorphoSys' human antibody libraries and any future improvements made during the collaboration. MorphoSys will also fully transfer a copy of its antibody libraries and technologies to Novartis research sites.

Novartis has been building its position in biologics, consistently growing its capabilities and expertise in the research and development of all biologic therapies, which now represent 25% of the pre-clinical research portfolio. The new Novartis Biologics Unit was created earlier in 2007, establishing a dedicated innovation unit, with a strong biotech culture in the areas of discovery and development unique to biologics, and with full access to the extensive Novartis discovery organization that generates many targets across multiple therapeutic areas.

"This strategic agreement will further leverage MorphoSys antibody technologies with the internal biologics discovery and development capabilities of Novartis so that we can more rapidly and efficiently bring innovative biologic therapies to patients," said Dr. Mark Fishman, President of Novartis Institutes for BioMedical Research. "MorphoSys has been a valued collaborator during the last three years, and we are pleased to expand this alliance."

MorphoSys has developed HuCAL (Human Combinatorial Antibody Library), a technology for the rapid and automated production of specific antibodies that involves more than 12 billion functional and distinct fully human antibodies.

Novartis and MorphoSys began the collaboration in May 2004, and it was first expanded in June 2006 to include a greater number of programs. Multiple active therapeutic antibody programs across various diseases have emerged from this collaboration, and the first US regulatory request to start human clinical trials (an "Investigational New Drug" application) was made within the first three years.

About Novartis
Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. Novartis is the only company with leadership positions in these areas. In 2006, the Group's businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 100,000 associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

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