1 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

a Novartis company

Unmet Medical Needs in Ophthalmologyand Innovation DeliverablesKevin Buehler

Division Head, Alcon

2 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Alcon – 3 Different Business Eye Segments

$3.9B

$3.6B

$2.4B

2011 Sales = $10 billion

Pharmaceutical

Surgical

Vision Care

24%

36%

39%

3 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Today’s Changing World…

Evolving Access to Healthcare

Regulatory / Payers

Demand for Technology

QualityCompliance

4 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Technology Opportunity Scale

Payer Willingness to Purchase New Technology

Level of Unmet Medical Need within Ophthalmology

Low High

Low High

5 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Technology Opportunity Scale

Patient Interest to Protect Vision

Low High

Payer Willingness to Purchase New Technology

Level of Unmet Medical Need within Ophthalmology

Low High

Low High

6 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Technology Opportunity Scale

Patient Interest to Protect Vision

Low High

Payer Willingness to Purchase New Technology

Level of Unmet Medical Need within Ophthalmology

Low High

Low High

Health Economics Value

7 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Paths of Innovation

“Incremental”

Innovation

“Breakthrough”

Innovation

Standard of Care Change

8 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Innovation/Ophthalmic ideation should target Unmet Needs

Glaucoma Efficacy (IOP) Improvement

Improved Patient Compliance

Surgical Intervention - Reduce

medication burden

Improve efficacy vs. standard of care

Rx for additional retinal indications

Drug delivery to reduce patient

treatment regimen

Macular Degeneration

Series12012 2017

4%

Series12012 2017

15%

Plus $800M in Surgical

9 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Innovation/Ophthalmic ideation should target Unmet Needs

Improve clinical (refractive) outcomes

Address presbyopia and astigmatism

Continue to improve safety of procedure

Series12012 2017

8%

Cataract

Improve quality of vision

Improve comfort over wearing period

Address presbyopia

Series12012 2017

5%

Contact Lenses

10 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

1. Idea

2. Prototype

3. Proof of Concept

4. Early Development

5. Full Global Development

6. Global Registration

7. Global Production & Distribution

8. Market Regulatory Maintenance,

Quality & Compliance

Partnerships in innovationFrom idea to peak market presence

Partnership can occur at any time

11 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

1. Idea

2. Prototype

3. Proof of Concept

4. Early Development

5. Full Global Development

6. Global Registration

7. Global Production & Distribution

8. Market Regulatory Maintenance,

Quality & Compliance

Partnerships in innovationFrom idea to peak market presence

Partnership in early stages help build data for desired profile.

Post proof-of-concept is easier to develop

Late partnership focused on accelerating/expanding

commercial plans

12 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Phases of Value Creation

Product Idea & POC

Completion of Registration clinical studies

Regulatory Approval

Reimbursement

Global Commercial capability

13 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Value Creation – Early Development Project

Early Stage Project

Solid scientific idea

Proof of concept clinical in man

Sound clinical data design vs. standard of care

Safety package

Stable product design

Simple Payer model / rationale

I.P. approach

Later Stage Project

Solid scientific idea

Proof of concept clinical in man

Sound clinical data design vs. standard of care

Safety package

Stable product design

Payer model to justify price

I.P. coverage / Freedom to operate

Manufacturing ready capability

Registration Clinical Data

Global Reimbursement Data

14 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Value Exchange

Early Stage Project Later Stage Project

Value to Seller

Technology Value

Development Risk

Regulatory Risk

Reimbursement Risk

Commercial Risk

Technology Value

Development Risk

Regulatory Risk

Reimbursement Risk

Commercial Risk

15 | Unmet Needs In Ophthalmology and Innovation Deliverables | November 8, 2012 | Business Use Only

Always Remember …

Patients are waiting for us …

to address their eye care needs

a Novartis company