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<SEC-DOCUMENT>0001047469-09-000782.txt : 20090206
<SEC-HEADER>0001047469-09-000782.hdr.sgml : 20090206
<ACCEPTANCE-DATETIME>20090206152024
ACCESSION NUMBER:		0001047469-09-000782
CONFORMED SUBMISSION TYPE:	424B2
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20090206
DATE AS OF CHANGE:		20090206

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NOVARTIS AG
		CENTRAL INDEX KEY:			0001114448
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-153696
		FILM NUMBER:		09576945

	BUSINESS ADDRESS:	
		STREET 1:		LICHSTRASSE 35
		CITY:			BASEL SWITZERLAND
		STATE:			V8
		ZIP:			CH 4056

	MAIL ADDRESS:	
		STREET 1:		LICHSTRASSE 35
		CITY:			BASEL SWITZERLAND
		ZIP:			CH 4056

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Novartis Capital CORP
		CENTRAL INDEX KEY:			0001443411
		IRS NUMBER:				263086456
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-153696-03
		FILM NUMBER:		09576944

	BUSINESS ADDRESS:	
		STREET 1:		608 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10020
		BUSINESS PHONE:		(212)307 1122

	MAIL ADDRESS:	
		STREET 1:		608 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10020

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Novartis Securities Investment Ltd.
		CENTRAL INDEX KEY:			0001443663
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D0
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-153696-02
		FILM NUMBER:		09576943

	BUSINESS ADDRESS:	
		STREET 1:		131 FRONT STREET
		CITY:			HAMILTON
		STATE:			D0
		ZIP:			HM 12
		BUSINESS PHONE:		(1)441 296 8025

	MAIL ADDRESS:	
		STREET 1:		P.O.BOX  HM 2899
		CITY:			HAMILTON
		STATE:			D0
		ZIP:			HM LX
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B2
<SEQUENCE>1
<FILENAME>a2190348z424b2.htm
<DESCRIPTION>424B2
<TEXT>
<HTML>
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</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<P><FONT SIZE=3 >
Use these links to rapidly review the document<BR>
<A HREF="#bg12001_table_of_contents_prospectus_supplement">  Table&#160;of&#160;Contents</A> <BR>
<A HREF="#bg12002_table_of_contents">  Table of Contents</A><BR></font>
</P>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>


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</FONT> <FONT SIZE=2><B> CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
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<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="73" style="font-family:times;"></TD>
<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="73" style="font-family:times;"></TD>
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<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Class of Securities Offered</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregate Offering Price</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Amount of Registration Fee<SUP>(1)</SUP></B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Debt securities of Novartis Capital Corporation</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$2,000,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$78,600</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Debt securities of Novartis Securities Investment&nbsp;Ltd.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$3,000,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$117,900</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Guarantees of Novartis AG in connection with the guaranteed debt securities of Novartis Capital Corporation and Novartis Securities Investment Ltd.<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
registration fee is calculated in accordance with Rule&nbsp;457(r) under the Securities Act of 1933.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Pursuant
to Rule&nbsp;457(n) under the Securities Act of 1933, no separate fee is payable with respect to the guarantees of Novartis AG in connection with
the guaranteed debt securities of Novartis Capital Corporation and Novartis Securities Investment Ltd. </FONT></DD></DL>
<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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</FONT> <FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>Filed pursuant to Rule&nbsp;424(b)(2)<BR>
Registration No.&nbsp;333-153696  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Prospectus Supplement<BR>  </B></FONT><FONT SIZE=2>(To Prospectus dated September&nbsp;26, 2008) </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>
<IMG SRC="g79627.jpg" ALT="GRAPHIC" WIDTH="252" HEIGHT="42">
  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=4><B>Novartis Capital Corporation<BR>  </B></FONT><FONT SIZE=3><B><I>$2,000,000,000 4.125% Notes due February&nbsp;10, 2014  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>fully and unconditionally guaranteed by<BR>  </B></FONT><FONT SIZE=4><B>Novartis AG  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=3>Issue price: 99.897% </FONT></P>

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<P style="font-family:times;"><FONT SIZE=4><B>Novartis Securities Investment Ltd.<BR>  </B></FONT><FONT SIZE=3><B><I>$3,000,000,000 5.125% Notes due February&nbsp;10, 2019</I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>fully and unconditionally guaranteed by  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=4><B>Novartis AG  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=3>Issue price: 99.822%<BR></FONT> <FONT SIZE=2><I>Interest payable February&nbsp;10 and August&nbsp;10  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The 4.125% Notes due February&nbsp;10, 2014, which we refer to as the "2014 notes," will bear interest at a rate of 4.125% per year. The 5.125% Notes due February&nbsp;10,
2019, which we refer to as the "2019 notes," will bear interest at a rate of 5.125% per year. We will pay interest on each of the 2014 notes and the 2019 notes each February&nbsp;10 and
August&nbsp;10, commencing on August&nbsp;10, 2009. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>We
refer to the 2014 notes and the 2019 notes collectively as the "notes." Unless we redeem the notes earlier, the 2014 notes will mature on February&nbsp;10, 2014, and the 2019 notes will mature on
February&nbsp;10, 2019. There is no sinking fund for the notes. The notes will rank equally in right of payment with all our other senior, unsecured debt obligations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>We
may redeem some or all of the notes at any time and from time to time at the redemption prices determined in the manner described in this prospectus supplement. We may also redeem the 2014 notes
and/or the 2019 notes before their stated maturity at a price equal to 100% of their principal amount plus accrued interest to the redemption date in the event of certain changes in withholding taxes
applicable to payments of interest on the relevant notes in Switzerland, the United States (in the case of the 2014 notes), Bermuda (in the case of the 2019 notes) or any other Relevant Taxing
Jurisdiction (as defined in the accompanying prospectus). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the prospectus to which it relates is truthful or complete. Any representation to the contrary is a criminal offense.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Investing in the notes involves risks. See "Risk factors" beginning on page&nbsp;S-8
of this prospectus supplement and on page&nbsp;6 of Novartis AG's annual report on Form&nbsp;20-F for the year ended December&nbsp;31, 2008 incorporated herein by reference.  </B></FONT></P>

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<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="97" style="font-family:times;"></TD>
<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="97" style="font-family:times;"></TD>
<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="97" style="font-family:times;"></TD>
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<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Price to<BR>
Public</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Underwriting<BR>
Discount</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Proceeds to<BR>
Issuer</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Per 2014 note</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>99.897%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>0.35%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>99.547%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$1,997,940,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$7,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$1,990,940,000</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Per 2019 Note</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>99.822%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>0.45%</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>99.372%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$2,994,660,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$13,500,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>$2,981,160,000</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
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<P style="font-family:times;"><FONT SIZE=2>Plus accrued interest, if any, from February&nbsp;10, 2009. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The
underwriters expect to deliver the notes to purchasers in book-entry form only through the facilities of The Depository Trust Company, or "DTC," for the accounts of its participants,
including Clearstream Banking, </FONT><FONT SIZE=2><I>soci&eacute;t&eacute; anonyme</I></FONT><FONT SIZE=2>, or "Clearstream," and Euroclear Bank&nbsp;S.A./N.V., or "Euroclear,"
against payment in New York, New York on or about February&nbsp;10, 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>Joint Book-Running Managers<BR>  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>


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<TD WIDTH="22" style="font-family:times;"></TD>
<TD WIDTH="191" style="font-family:times;"></TD>
<TD WIDTH="22" style="font-family:times;"></TD>
<TD WIDTH="22" style="font-family:times;"></TD>
<TD WIDTH="22" style="font-family:times;"></TD>
<TD WIDTH="137" style="font-family:times;"></TD>
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<TD style="font-family:times;"><FONT SIZE=3><B>J.P.&nbsp;Morgan</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=3>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Banc of America Securities&nbsp;LLC</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=3>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Citi</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=3>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=3><B>Goldman, Sachs&nbsp;&amp;&nbsp;Co.</B></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>Co-Managers<BR>  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>


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<TD WIDTH="46" style="font-family:times;"></TD>
<TD WIDTH="68" style="font-family:times;"></TD>
<TD WIDTH="46" style="font-family:times;"></TD>
<TD WIDTH="85" style="font-family:times;"></TD>
<TD WIDTH="46" style="font-family:times;"></TD>
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<TD style="font-family:times;"><FONT SIZE=2><B>Barclays Capital</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Credit Suisse</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Morgan Stanley</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B>UBS Investment Bank</B></FONT></TD>
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<TD COLSPAN=7 style="font-family:times;"><BR><FONT SIZE=2> February&nbsp;4, 2009</FONT></TD>
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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>
<A NAME="BG12001A_main_toc"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bg12001_table_of_contents_prospectus_supplement"> </A>
<A NAME="table_#160;of_#160;contents"> </A>
<BR></FONT><FONT SIZE=4><B>Table of Contents<BR>  <BR>    </B></FONT><FONT SIZE=2><B>Prospectus Supplement    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="BG12001_TOC"></A> </FONT></P>
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<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Page</B></FONT><BR></TH>
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<TD style="font-family:times;"><A HREF="#ca12001_about_this_prospectus_supplement"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>About this Prospectus Supplement</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ca12001_about_this_prospectus_supplement"><FONT SIZE=2>S-2</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#ca12001_where_you_can_find_more_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ca12001_where_you_can_find_more_information"><FONT SIZE=2>S-2</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#ca12001_incorporation_of_certain_documents_by_reference"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Incorporation of Certain Documents by Reference</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ca12001_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>S-2</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#ca12001_presentation_of_financial_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Presentation of Financial Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ca12001_presentation_of_financial_information"><FONT SIZE=2>S-3</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#cc12001_summary"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Summary</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cc12001_summary"><FONT SIZE=2>S-4</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#ce12001_risk_factors"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk Factors</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ce12001_risk_factors"><FONT SIZE=2>S-8</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#cg12001_use_of_proceeds"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cg12001_use_of_proceeds"><FONT SIZE=2>S-11</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#cg12001_ratios_of_earnings_to_fixed_charges"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ratios of Earnings to Fixed Charges</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cg12001_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>S-11</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#ci12001_capitalization"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capitalization</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ci12001_capitalization"><FONT SIZE=2>S-12</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#ck12001_description_of_the_notes"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of the Notes</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ck12001_description_of_the_notes"><FONT SIZE=2>S-13</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#cm12001_tax_considerations"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax Considerations</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cm12001_tax_considerations"><FONT SIZE=2>S-19</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#co12001_underwriting"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#co12001_underwriting"><FONT SIZE=2>S-24</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#co12001_selling_restrictions"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling Restrictions</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#co12001_selling_restrictions"><FONT SIZE=2>S-25</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#cq12001_legal_matters"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Matters</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cq12001_legal_matters"><FONT SIZE=2>S-29</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#cq12001_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#cq12001_experts"><FONT SIZE=2>S-29</FONT></A></TD>
</TR>
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<TD COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B> Prospectus</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_about_this_prospectus"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>About this Prospectus</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_about_this_prospectus"><FONT SIZE=2>3</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#da12002_where_you_can_find_more_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_where_you_can_find_more_information"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_incorporation_of_certain_documents_by_reference"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Incorporation of Certain Documents by Reference</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_presentation_of_financial_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Presentation of Financial Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_presentation_of_financial_information"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_forward-looking_statements"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forward-Looking Statements</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_forward-looking_statements"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_use_of_proceeds"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_use_of_proceeds"><FONT SIZE=2>6</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_ratios_of_earnings_to_fixed_charges"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ratios of Earnings to Fixed Charges</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>6</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dc12002_novartis_ag"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis AG</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_ag"><FONT SIZE=2>7</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dc12002_novartis_capital_corporation"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Capital Corporation</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_capital_corporation"><FONT SIZE=2>7</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dc12002_novartis_securities_investment_ltd."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Securities Investment&nbsp;Ltd.&nbsp;</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_securities_investment_ltd."><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_novartis_finance_s.a."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Finance&nbsp;S.A.&nbsp;</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_finance_s.a."><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#de12002_legal_ownership_of_debt_securities"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Ownership of Debt Securities</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#de12002_legal_ownership_of_debt_securities"><FONT SIZE=2>8</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dg12002_description_of_debt_securities"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Debt Securities</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dg12002_description_of_debt_securities"><FONT SIZE=2>11</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dk12002_tax_considerations"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax Considerations</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dk12002_tax_considerations"><FONT SIZE=2>22</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_plan_of_distribution"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Plan of Distribution</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_plan_of_distribution"><FONT SIZE=2>23</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_legal_matters"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Matters</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_legal_matters"><FONT SIZE=2>24</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_experts"><FONT SIZE=2>24</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_limitations_on_enforcement_of_u.s._laws"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Limitations on Enforcement of U.S. Laws</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_limitations_on_enforcement_of_u.s._laws"><FONT SIZE=2>25</FONT></A></TD>
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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca12001_about_this_prospectus_supplement"> </A>
<A NAME="toc_ca12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  ABOUT THIS PROSPECTUS SUPPLEMENT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No person has been authorized to provide you with information that is different from what is contained in, or incorporated by reference
into, this prospectus supplement and the accompanying prospectus, and, if given or made, such information must not be relied upon as having been authorized. This prospectus supplement and the
accompanying prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the notes to which they relate or an offer to sell or the solicitation of an
offer to buy such notes by any person in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus supplement and the accompanying prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus supplement or that the information contained
in this prospectus supplement and the accompanying prospectus is correct as of any time subsequent to its date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used in this prospectus supplement and the accompanying prospectus, the terms "we," "our" and "us" refer to Novartis AG and its consolidated subsidiaries unless the context requires
otherwise. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
distribution or possession of this prospectus supplement and the accompanying prospectus in or from certain jurisdictions may be restricted by law. You should inform yourself about
and observe any such restrictions, and neither we nor any of the underwriters accepts any liability in relation to any such restrictions. See "Underwriting." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca12001_where_you_can_find_more_information"> </A>
<A NAME="toc_ca12001_2"> </A>
<BR></FONT><FONT SIZE=2><B>  WHERE YOU CAN FIND MORE INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual reports with and furnish other reports and information to the Securities and Exchange Commission, or the "SEC." You may
read and copy any document we file with or furnish to the SEC at the SEC's public reference room at 100&nbsp;F Street, N.E., Room&nbsp;1580, Washington, D.C. 20549. You may also obtain documents
we file with or furnish to the SEC on the SEC website at www.sec.gov. The address of the SEC's internet site is provided solely for the information of prospective investors and is not intended to be
an active link. Please visit this website or call the SEC at 1-800-732-0330 for further information about its public reference room. Reports and other information
concerning our business may also be inspected at the offices of the New York Stock Exchange at 20&nbsp;Broad Street, New York, New York 10005. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca12001_incorporation_of_certain_documents_by_reference"> </A>
<A NAME="toc_ca12001_3"> </A>
<BR></FONT><FONT SIZE=2><B>  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to "incorporate by reference" information contained in documents we file with or furnish to the SEC, which means that
we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus supplement and the accompanying
prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such documents is not intended to create any implication
that there has been no change in our affairs since the date of the relevant document or that the information contained in such document is current as of any time subsequent to its date. Any statement
contained in such incorporated documents is deemed to be modified or superseded for the purpose of this prospectus supplement and the accompanying prospectus to the extent that a subsequent statement
contained in another document we incorporate by reference at a later date modifies or supersedes that statement. Any such statement so modified or superseded will not be deemed, except as so modified
or superseded, to constitute a part of this prospectus supplement and the accompanying prospectus. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-2</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby incorporate by reference into this prospectus supplement and the accompanying prospectus the documents listed below. Unless otherwise noted, all of the documents listed below
have the SEC file number&nbsp;001-15024:<BR></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Annual Report on Form&nbsp;20-F for the year ended December&nbsp;31, 2008;
<BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Each of the following documents that we file with or furnish to the SEC after the date of this prospectus supplement from
now until we terminate the offering of securities under this prospectus supplement, the accompanying prospectus and the registration statement:<BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reports filed under Section&nbsp;13(a), 13(c) or 15(d) of the Exchange Act, and
<BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reports filed or furnished on Form&nbsp;6-K that indicate that they are incorporated by reference in this
prospectus supplement or the accompanying prospectus. </FONT></DD></DL>
</UL>
</DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may obtain copies of these documents in the manner described above. You may also request copies of these documents (excluding exhibits) at no cost by contacting us as follows: </FONT></P>

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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Novartis International AG<BR>
Investor Relations<BR>
P.O.&nbsp;Box<BR>
CH - 4002 Basel<BR>
Switzerland<BR>
Tel: +41 61 324 79 44<BR>
Fax: +41 61 324 84 44<BR>
E-mail:&nbsp;investor.relations@novartis.com</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Novartis Finance Corporation<BR>
Investor Relations<BR>
608 Fifth Avenue<BR>
New York, NY 10020<BR>
USA<BR>
Tel: +1 212 307 1122<BR>
Fax: +1 212 830 2405<BR>
E-mail:&nbsp;investor.relations@novartis.com</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis
Capital Corporation and Novartis Securities Investment Ltd. do not, and will not, file separate reports with the SEC. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca12001_presentation_of_financial_information"> </A>
<A NAME="toc_ca12001_4"> </A>
<BR></FONT><FONT SIZE=2><B>  PRESENTATION OF FINANCIAL INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We present our consolidated financial statements in U.S. dollars and in accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board. When we refer to "$," we mean U.S. dollars. Except where noted, all financial information is presented in accordance with IFRS. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-3</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc12001_summary"> </A>
<A NAME="toc_cc12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SUMMARY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This summary highlights selected information from this prospectus supplement, the accompanying prospectus and the documents
incorporated by reference and does not contain all of the information that may be important to you. You should carefully read this entire prospectus supplement, the accompanying prospectus and the
documents incorporated by reference. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Novartis AG  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis AG was incorporated on February&nbsp;29, 1996 under the laws of Switzerland as a stock corporation
(</FONT><FONT SIZE=2><I>Aktiengesellschaft</I></FONT><FONT SIZE=2>) with an indefinite duration. On December&nbsp;20, 1996, our predecessor companies, Ciba-Geigy AG and Sandoz AG,
merged into this new entity, creating the Novartis Group. Novartis AG is domiciled in and governed by the laws of Switzerland. Its principal office is located at Novartis AG, Lichtstrasse 35, 4056
Basel, Switzerland, and its telephone number is +41 61&nbsp;324&nbsp;1111. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis
AG is organized as a holding company which owns, directly or indirectly, all significant operating companies of the Novartis Group. The Novartis Group is a multinational group
of companies specializing in the research, development, manufacturing and marketing of innovative healthcare products and provides healthcare solutions that address the evolving needs of patients and
societies worldwide with a broad portfolio that includes innovative medicines, preventive vaccines and diagnostic tools, generic pharmaceuticals and consumer health products. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
businesses are divided on a worldwide basis into the following four operating divisions:<BR></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Pharmaceuticals (brand-name patented pharmaceuticals) <BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vaccines and Diagnostics (human vaccines and blood-testing diagnostics)
<BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Sandoz (generic pharmaceuticals) <BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Consumer Health (over-the-counter medicines, animal health medicines,
and contact lenses and
lens-care products) </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
shares are listed in Switzerland on the "EU-Compatible" segment of the SIX Swiss Exchange under the symbol "NOVN.VX" and our American Depositary Shares are listed on the New York
Stock Exchange under the symbol "NVS." We employed approximately 96,700 full-time equivalent associates as of December&nbsp;31, 2008 and have operations in approximately 140 countries
around the world. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Novartis Capital Corporation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Capital Corporation is a finance subsidiary indirectly owned 100% by Novartis AG and was incorporated as a
corporation under the laws of Delaware on July&nbsp;23, 2008. It exists for the purpose of issuing debt securities, the proceeds of which will be invested by it in marketable securities or advanced
to, or otherwise invested in, subsidiaries or affiliates of Novartis AG. The principal office of Novartis Capital Corporation is located at 608 Fifth Avenue, New York, New York 10020, USA, and its
telephone number is +1&nbsp;212&nbsp;307 1122. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Novartis Securities Investment&nbsp;Ltd.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Securities Investment&nbsp;Ltd. is a finance subsidiary indirectly owned 100% by Novartis AG and was
incorporated as a limited liability company under the laws of Bermuda on September&nbsp;25, 2001 for an indefinite duration. It exists for the purpose of issuing debt securities, the proceeds of
which will be invested by it in marketable securities or advanced to, or otherwise invested in, subsidiaries or affiliates of Novartis&nbsp;AG. The principal office of Novartis Securities
Investment&nbsp;Ltd. is located at 131&nbsp;Front Street, Hamilton, HM12, Bermuda, and its telephone number is +1&nbsp;441&nbsp;296&nbsp;8025. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-4</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc12001_the_offering"> </A>
<A NAME="toc_cc12001_2"> </A>
<BR></FONT><FONT SIZE=3><B>The Offering  <BR>  </B></FONT></P>

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<TD WIDTH="281" style="font-family:times;"></TD>
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<TD style="font-family:times;"><FONT SIZE=2><B>


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 Notes</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>$2,000,000,000 principal amount of 2014 notes,<BR>
$3,000,000,000&nbsp;principal amount of 2019 notes.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Issuer</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Novartis Capital Corporation will issue the 2014 notes and Novartis Securities Investment Ltd. will issue the 2019 notes.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Guarantees</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Novartis AG will fully and unconditionally guarantee the payment of principal, interest and additional amounts, if any, payable in respect of the notes.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Maturity</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The 2014 notes will mature on February&nbsp;10, 2014.<BR>
The 2019 notes will mature on February&nbsp;10, 2019.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Interest Rate</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The 2014 notes will bear interest at a rate of 4.125% annually.<BR>
The&nbsp;2019 notes will bear interest at a rate of 5.125% annually.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Interest Payment Dates</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>For each of the 2014 notes and the 2019 notes, every February&nbsp;10 and August&nbsp;10, commencing August&nbsp;10, 2009. If an interest payment date or redemption date, or the maturity date, as the case may be, for
the notes would fall on a Saturday, Sunday or a day on which banking institutions in the City of New York, Luxembourg, Luxembourg or Zurich, Switzerland, are authorized or obligated by law, regulation or executive order to be closed, then the
interest payment date, redemption date or maturity date, as the case may be, will be postponed to the next succeeding business day, but no additional interest shall be paid unless we fail to make payment on such next succeeding business
day.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Regular&nbsp;Record&nbsp;Dates for Interest</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>For each of the 2014 notes and the 2019 notes, every January&nbsp;26 and July&nbsp;26.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Calculation of Interest</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Interest on the notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Optional Make-Whole Redemption</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>The notes will be redeemable at our option, in whole or in part, at any time and from time to time. See "Description of the Notes&nbsp;&#151; Optional Make-Whole Redemption of the Notes." Upon redemption,
 we will pay a redemption price equal to the greater of:</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2> &#149;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> 100% of the principal amount of the notes to be redeemed and</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2> &#149;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2> the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed,</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>together with, in each case, accrued interest to the date of redemption.</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>The present value will be determined by discounting the remaining principal and interest payments to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), using the
Treasury Rate (as defined in this prospectus supplement) plus 0.40% in the case of the 2014 notes and 0.40% in the case of the 2019 notes.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Tax Redemption</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>In the event of changes in withholding taxes applicable to payments of interest on the 2014 notes in Switzerland, the United States or any other Relevant Taxing Jurisdiction, we may redeem the 2014 notes in whole (but
not in part) at any time, at a price equal to 100% of their principal amount plus accrued interest to the redemption date.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>In the event of changes in withholding taxes applicable to payments of interest on the 2019 notes in Switzerland, Bermuda or any other Relevant Taxing Jurisdiction, we may redeem the 2019 notes in whole (but not in
part) at any time, at a price equal to 100% of their principal amount plus accrued interest to the redemption date.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>See "Description of Debt Securities&nbsp;&#151; Optional Redemption for Tax Reasons" in the accompanying prospectus.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Denominations</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The notes will be issued only in book-entry form, in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>



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 Ranking</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The 2014 notes will rank equally in right of payment with all other senior, unsecured debt obligations of Novartis Capital Corporation.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The 2019 notes will rank equally in right of payment with all other senior, unsecured debt obligations of Novartis Securities Investment&nbsp;Ltd.</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>


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&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The guarantees will rank equally in right of payment with all other senior, unsecured debt obligations of Novartis AG.</FONT></TD>
</TR>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Payment of Additional Amounts</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Subject to certain exceptions, if we are required to withhold or deduct any amount for or on account of any withholding tax in Switzerland, the United States or another Relevant Taxing Jurisdiction from any payment made
on the 2014 notes, we will pay additional amounts on those payments so that the amount received by noteholders will equal the amount that would have been received if no such taxes had been applicable.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Subject to certain exceptions, if we are required to withhold or deduct any amount for or on account of any withholding tax in Switzerland, Bermuda or another Relevant Taxing Jurisdiction from any payment made on the
2019 notes, we will pay additional amounts on those payments so that the amount received by noteholders will equal the amount that would have been received if no such taxes had been applicable.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>See "Description of Debt Securities&nbsp;&#151; Covenants&nbsp;&#151; Payment of Additional Amounts" in the accompanying prospectus.</FONT></TD>
</TR>
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 Repayment</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>The notes will not be subject to repayment at the option of the holder prior to maturity.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Events of Default</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The events of default are subject to a number of important qualifications and exceptions. See "Description of Debt Securities&nbsp;&#151; Events of Default" in the accompanying prospectus.</FONT></TD>
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 Sinking Fund</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>None.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Book-Entry Issuance; Settlement; Clearance</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>We will issue the notes as global notes in book-entry form registered in the name of DTC or its nominee. The sale of the notes will settle in immediately available funds through DTC. Investors may hold
interests in a global note through organizations that participate, directly or indirectly, in the DTC system. Those organizations will include Clearstream and Euroclear in Europe.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>


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 Governing Law</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The notes and the guarantees will be governed by the laws of the State of New York.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Further Issuances</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>We may from time to time, without the consent of the holders of a series of notes, create and issue further notes of the same series having the same terms and conditions in all respects as the notes of that series being
offered hereby, except for the issue date, the issue price and the first payment of interest thereon. We will not issue any further notes of a series unless such further notes have no more than a </FONT><FONT SIZE=2><I>de minimis</I></FONT><FONT
SIZE=2> amount of original issue discount or such issuance would constitute a "qualified reopening" for U.S. federal income tax purposes. Additional 2014 notes issued in this manner will be consolidated with and will form&nbsp;a single series with
the 2014 notes being offered hereby. Additional 2019 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the 2019 notes being offered hereby.</FONT></TD>
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 Listing</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The notes will not be listed on any securities exchange or interdealer market quotation system.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Use of Proceeds</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>We intend to use the net proceeds from the sale of the notes for general corporate purposes outside of Switzerland.</FONT></TD>
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 Trustee;&nbsp;Principal Paying Agent; Transfer Agent</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>HSBC Bank USA, National Association.</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2><B>Expected Ratings</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>The 2014 notes and the 2019 notes are each expected to be rated:</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Moody's:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aa2</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Standard&nbsp;&amp; Poor's:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA-</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-7</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ce12001_risk_factors"> </A>
<A NAME="toc_ce12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  RISK FACTORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing in the notes involves risks. You should carefully consider the risks relating to the notes described below, as well as the
other information included in or incorporated by reference into this prospectus supplement and the accompanying prospectus, including our annual report on Form&nbsp;20-F for the year
ended December&nbsp;31, 2008 and the extensive risk factors relating to our business described therein beginning on page&nbsp;6 thereof, before making a decision to invest in the notes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Risks Relating to the Notes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> The notes will not be listed and may not have an active trading market.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes will not be listed or displayed on any securities exchange or included in any interdealer market quotation system, and there
may be little or no secondary market for your notes. Even if a secondary market for your notes develops, it may not provide significant liquidity and we expect that transaction costs in any secondary
market would be high. As a result, the difference between bid and asked prices for your notes in any secondary market could be substantial. Underwriters, broker-dealers and agents that participate in
the distribution of the notes may make a market in the notes as permitted by applicable laws and regulations but will have no obligation to do so, and any such market-making activities with respect to
the notes may be discontinued at any time without notice. Therefore, there can be no assurance as to the liquidity of any trading market for the notes or that an active public market for the notes
will develop. See "Plan of Distribution" in the accompanying prospectus. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> General market conditions and other factors could adversely affect market prices for the notes.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market prices for the notes can be expected to vary with changes in market and economic conditions, including prevailing interest rates
and the market for similar securities, our financial condition and prospects, changes in our credit ratings (whether real or anticipated) and other factors that generally influence the market prices
of securities. As a result, the notes could trade at prices that may be lower than the initial offering price. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Neither issuer nor Novartis AG is prohibited from issuing further debt.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no restriction on the amount of debt Novartis Capital Corporation or Novartis Securities Investment Ltd. may issue that ranks
equally with the notes or on the amount of debt or guarantees Novartis AG may issue that ranks equally with the guarantees. The issuance of any such debt or guarantees may reduce the amount
recoverable by you in the event of a liquidation or bankruptcy. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
particular, we may from time to time, without the consent of the holders of a series of notes, create and issue one or more additional series of debt securities through the
accompanying prospectus or create and issue further notes of the same series having the same terms and conditions in all respects as the applicable notes being offered hereby, except for the issue
date, the issue price and the first payment of interest thereon. See "Description of the Notes&nbsp;&#151; Further Issuances." In
addition, Novartis Capital Corporation or Novartis Securities Investment Ltd. may from time to time, without the consent of the holders of a series of notes, issue additional debt, and Novartis AG may
among other things issue additional guarantees, including pursuant to our &euro;15&nbsp;billion Euro Medium Term Note Programme or our $5.5&nbsp;billion U.S. Commercial Paper Program. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-8</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> We may redeem the notes.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may redeem the 2014 notes and/or the 2019 notes, in whole or in part, at our option at any time and from time to time. See
"Description of the Notes&nbsp;&#151; Optional Make-Whole Redemption of the Notes" below and "Description of Debt Securities&nbsp;&#151; Optional Redemption for Tax
Reasons" in the accompanying prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> The notes will rank below any secured debt of the respective issuer and the guarantees will rank below the secured debt of Novartis AG.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes will be unsecured obligations of Novartis Capital Corporation and Novartis Securities Investment Ltd. and will rank equal in
right of payment to all other existing and future unsecured indebtedness of Novartis Capital Corporation or Novartis Securities Investment Ltd., respectively. The 2014 notes will be subordinated to
all existing and future secured indebtedness of Novartis Capital Corporation to the extent of the assets securing that indebtedness. The 2019 notes will be subordinated to all existing and future
secured indebtedness of Novartis Securities Investment&nbsp;Ltd. to the extent of the assets securing that indebtedness. The guarantees by Novartis AG will be subordinated to all existing and future
secured indebtedness of Novartis AG to the extent of the assets securing that indebtedness. If Novartis Capital Corporation, Novartis Securities Investment Ltd. or Novartis AG incurs additional
indebtedness and secures such indebtedness with its assets, your rights to receive payments under the notes and the guarantees will be subordinated to the rights of the holders of such future secured
indebtedness. As of the date of this prospectus supplement, neither Novartis AG nor Novartis Capital Corporation nor Novartis Securities Investment Ltd. had any secured indebtedness. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Because Novartis AG is a holding company and conducts substantially all of its operations through subsidiaries, your right to receive payments under the guarantees is
structurally subordinated to the liabilities of our subsidiaries.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis AG is organized as a holding company, and substantially all of its operations are carried on through subsidiaries. The ability
of Novartis AG to meet its financial obligations is dependent upon the availability of cash flows from our domestic and foreign subsidiaries and affiliated companies through dividends, intercompany
advances, management fees and other payments. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2014 notes are obligations of Novartis Capital Corporation and the 2019 notes are obligations of Novartis Securities Investment&nbsp;Ltd. and, in each case, are guaranteed
exclusively by Novartis AG. The subsidiaries of Novartis AG are separate and distinct legal entities, and have no obligation to pay any amounts due on the guarantees or to provide us with funds for
its payment obligations. Our right to receive any assets of any of our subsidiaries, as an equity holder of such subsidiaries, upon their liquidation or reorganization, and therefore the right of the
holders of the notes to participate in those assets through the guarantees, will be effectively subordinated to the claims of that subsidiary's creditors. The guarantees do not restrict the ability of
our subsidiaries to incur additional indebtedness or other liabilities. Even if we were a creditor of any of our subsidiaries, our rights as a creditor would be subordinate to any security interest in
the assets of our subsidiaries and any indebtedness of our subsidiaries senior to that held by us. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> The right to receive payments under the guarantees of Novartis AG may be adversely affected by Swiss bankruptcy laws.  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis AG is incorporated under the laws of Switzerland. Accordingly, bankruptcy proceedings with respect to Novartis AG are likely
to proceed under, and to be governed primarily by, Swiss bankruptcy law. The procedural and substantive provisions of such bankruptcy laws are, in certain </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-9</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>cases,
more favorable to secured creditors than comparable provisions of United States law. These provisions afford debtors and unsecured creditors only limited protection from the claims of secured
creditors and it may not be possible for us or other unsecured creditors to prevent or delay the secured creditors from enforcing their security to repay the debts due to them under the terms that
such security was granted. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Enforcement claims or court judgments against Novartis AG must be converted into Swiss francs.  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enforcement claims or court judgments against Novartis AG under Swiss debt collection or bankruptcy proceedings may only be made in
Swiss francs and any foreign currency amounts must accordingly be converted into Swiss francs. With respect to enforcing creditors, any such foreign currency amounts will be converted at the exchange
rate prevailing on (i)&nbsp;the date of instituting the enforcement proceedings (</FONT><FONT SIZE=2><I>Betreibungsbegehren</I></FONT><FONT SIZE=2>), (ii)&nbsp;the date of the filing for the
continuation of the bankruptcy procedure (</FONT><FONT SIZE=2><I>Fortsetzungsbegehren</I></FONT><FONT SIZE=2>) or (iii)&nbsp;the date on which any amounts claimed first became due and payable
(</FONT><FONT SIZE=2><I>Verfallzeit</I></FONT><FONT SIZE=2>), whichever date is more favorable for the creditors. With respect to non-enforcing creditors, foreign currency amounts will be
converted at the exchange rate prevailing at the time of the adjudication of bankruptcy (</FONT><FONT SIZE=2><I>Konkurser&ouml;ffnung</I></FONT><FONT SIZE=2>). </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-10</FONT></P>

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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate the net proceeds from the sale of the notes to be approximately $4,971,600,000 after deducting underwriting discounts and
expenses of the offering. We intend to use the net proceeds for general corporate purposes outside of Switzerland. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_cg12001_2"> </A>
<BR></FONT><FONT SIZE=2><B>  RATIOS OF EARNINGS TO FIXED CHARGES    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our consolidated ratio of earnings to fixed charges for each of the periods indicated using financial
information extracted, where applicable, from our IFRS consolidated financial statements. </FONT></P>

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<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2005 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2004<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT SIZE=1>We
adopted a number of new International Financial Reporting Standards from January&nbsp;1, 2005, not all of which required retrospective
application. Data for 2004 is therefore not comparable with 2008, 2007, 2006 and 2005. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining the ratio of earnings to fixed charges, earnings have been calculated by adding (i)&nbsp;income from continuing
operations before taxes (after eliminating our share of results from associated companies), (ii)&nbsp;fixed charges and (iii)&nbsp;dividends from associated companies. Fixed charges are defined as
the total of (i)&nbsp;interest expense and (ii)&nbsp;an estimate of the interest within rental expense. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-11</FONT></P>

<HR NOSHADE>
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</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ci12001_capitalization"> </A>
<A NAME="toc_ci12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  CAPITALIZATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our consolidated capitalization (including short-term debt and minority interests) as of
December&nbsp;31, 2008, on an actual basis and on an as adjusted basis to give effect to the sale of the notes (after deducting discounts and commissions). </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10" style="font-family:times;"></TD>
<TD WIDTH="348" style="font-family:times;"></TD>
<TD WIDTH="12" style="font-family:times;"></TD>
<TD WIDTH="5" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="29" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
<TD WIDTH="5" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39" style="font-family:times;"></TD>
<TD WIDTH="3" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>As of December&nbsp;31,<BR>
2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Actual </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>As<BR>
Adjusted </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(in millions $)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Equity</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Share capital<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>959</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>959</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Treasury shares<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(139</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(139</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Reserves</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>49,468</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>49,468</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Issued share capital and reserves attributable to shareholders of Novartis AG</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50,288</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50,288</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Minority interests</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>149</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>149</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total equity</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50,437</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50,437</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Indebtedness</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Short-term indebtedness:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest bearing employee accounts</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,080</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,080</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other bank and financial debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,430</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,430</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Commercial paper</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,330</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,330</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current portion of long-term financial debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of derivative financial instruments</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>329</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>329</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term indebtedness:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>3.50% CHF&nbsp;700&nbsp;million bond 2008/2012 of Novartis Securities Investment&nbsp;Ltd., Hamilton, Bermuda</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>661</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>661</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>3.625% CHF&nbsp;800&nbsp;million bond 2008/2015 of Novartis AG</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>748</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>748</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities to banks and other financial institutions</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>781</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>781</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Finance lease obligations</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less current portion of non current financial debt</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014 notes offered hereby</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,991</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2019 notes offered hereby</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,981</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total indebtedness</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,364</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,336</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total capitalization</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>57,801</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62,773</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Share
capital was converted at the exchange rate of CHF&nbsp;1.378/U.S. dollar applicable on December&nbsp;31, 1998, the date on which we
switched the presentation currency of our consolidated financial statements from CHF to U.S. dollars.  </FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Treasury
shares are converted at appropriate historical exchange rates. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-12</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_ck12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  DESCRIPTION OF THE NOTES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following description of the particular terms of the notes offered by this prospectus supplement adds information to the
description of the general terms and provisions of debt securities under the heading "Description of Debt Securities" of the accompanying prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>General  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will issue the notes pursuant to an indenture, dated as of February&nbsp;10, 2009, among Novartis Capital Corporation, Novartis
Securities Investment&nbsp;Ltd. and Novartis Finance&nbsp;S.A., as issuers, HSBC Bank USA, National Association, as trustee, and Novartis AG, as guarantor. The notes will each be a series of our
debt securities. Novartis Capital Corporation will issue the 2014 notes in the aggregate principal amount of $2,000,000,000. The 2014 notes will mature on February&nbsp;10, 2014. Novartis Securities
Investment Ltd. will issue the 2019 notes in the aggregate principal amount of $3,000,000,000. The 2019 notes will mature on February&nbsp;10, 2019. The notes will be
issued only in book-entry form, in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
notes will be fully and unconditionally guaranteed by Novartis AG. If, for any reason, the relevant finance subsidiary does not make any required payment in respect of the notes when
due, whether on the normal due date, on acceleration, redemption or otherwise, Novartis AG will cause the payment to be made to or to the order of the trustee. You will be entitled to payment under
the guarantees of Novartis AG without taking any action whatsoever against the relevant finance subsidiary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Interest Payments  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes will each bear interest at the applicable interest rate shown on the cover of this prospectus supplement and will accrue
interest from February&nbsp;10, 2009, or from the most recent date to which interest has been paid (or provided for), to but not including the next date upon which interest is required to be paid. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
will be payable on each of the 2014 notes and the 2019 notes twice a year, on February&nbsp;10 and August&nbsp;10, commencing August&nbsp;10, 2009, to the person in whose
name a 2014 note or a 2019 note, respectively, is registered at the close of business on the January&nbsp;26 or July&nbsp;26 that precedes the date on which interest will be paid. Interest on the
notes will be paid on the basis of a 360-day year consisting of twelve 30-day months. "Business day" means any day other than a Saturday, a Sunday or a day on which banking
institutions in the City of New York, Luxembourg, Luxembourg or Zurich, Switzerland are authorized or obligated by law, regulation or executive order to be closed. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an interest payment date or redemption date, or the maturity date, for the 2014 notes or the 2019 notes, as the case may be, would fall on a day that is not a business day, then the
interest payment date or redemption date, or the maturity date, as the case may be, will be postponed to the next succeeding business day, but no additional interest shall be paid unless we fail to
make payment on such next succeeding business day. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Covenants  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain exceptions, if we are required to withhold or deduct any amount for or on account of any withholding tax in
Switzerland, the United States or another Relevant Taxing Jurisdiction from any payment made on the 2014 notes, we will pay additional amounts on those payments so that the amount received by
noteholders will equal the amount that would have been </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-13</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<BR>

<P style="font-family:times;"><FONT SIZE=2>received
if no such taxes had been applicable. Subject to certain exceptions, if we are required to withhold or deduct any amount for or on account of any withholding tax in Switzerland, Bermuda or
another Relevant Taxing Jurisdiction from any payment made on the 2019 notes, we will pay additional amounts on those payments so that the amount received by noteholders will equal the amount that
would have been received if no such taxes had been applicable. See "Description of Debt Securities&nbsp;&#151;&nbsp;Covenants&nbsp;&#151;&nbsp;Payment of Additional Amounts" in
the accompanying prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
contemplated by the last paragraph under "Description of Debt Securities&nbsp;&#151;&nbsp;Defeasance" of the accompanying prospectus, the satisfaction of certain conditions
will permit us to omit to comply with some or all of our obligations, covenants and agreements under the indenture with respect to the notes. In addition, we may omit to comply with certain covenants
through covenant defeasance. See "Description of Debt Securities&nbsp;&#151;&nbsp;Defeasance" in the accompanying prospectus. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described in the accompanying prospectus, the indenture for the notes does not contain any covenants or other provisions designed to protect holders of the notes against a
reduction in our creditworthiness in the event of a highly leveraged transaction or that would prohibit other transactions that might adversely affect holders of the notes, including, among other
things, through the incurrence of additional indebtedness. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Optional Make-Whole Redemption of the Notes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Capital Corporation may redeem the 2014 notes and Novartis Securities Investment Ltd. may redeem the 2019 notes, in whole or
in part, at its option at any time and from time to time at a redemption price equal to the greater of (i)&nbsp;100% of the principal amount of the notes to be redeemed on that redemption date; and
(ii)&nbsp;as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and
interest on the notes being redeemed on that redemption date (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 0.40% in the case of the 2014 notes and 0.40% in the case
of the 2019 notes, plus, in each case, accrued and unpaid interest thereon to, but excluding, the date of redemption. Notwithstanding the foregoing, installments of interest on notes to be redeemed
that are due and payable on interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered holders as of the close of business on the
relevant record date according to the notes and the indenture. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Comparable
Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term (as measured from the date of
redemption) of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the notes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Comparable
Treasury Price" means, with respect to any redemption date, (i)&nbsp;the average of four Reference Treasury Dealer Quotations (as defined below) for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii)&nbsp;if the Quotation Agent for the notes obtains fewer than four such Reference Treasury Dealer Quotations,
the average of all such quotations, or (iii)&nbsp;if only one Reference Treasury Dealer Quotation is received, the quotation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Quotation
Agent" means any Reference Treasury Dealer appointed by us. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Reference
Treasury Dealer" means (i)&nbsp;each of J.P. Morgan Securities&nbsp;Inc., Banc of America Securities&nbsp;LLC, Citigroup Global Markets&nbsp;Inc. and Goldman,
Sachs&nbsp;&amp;&nbsp;Co. (or their respective affiliates </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-14</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>that
are Primary Treasury Dealers) and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer"), we will substitute therefor another Primary Treasury Dealer, and (ii)&nbsp;any other Primary Treasury Dealer selected by us. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00&nbsp;p.m., New York
City time, on the third business day preceding such redemption date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Treasury
Rate" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for
the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
of any redemption will be mailed at least 30&nbsp;days but not more than 60&nbsp;days before the redemption date to each registered holder of the notes to be redeemed by us or
by the trustee on our behalf. Notice of redemption will be published in a daily newspaper of general circulation in the United States, and we will give notice of any such redemption to any exchange on
which the notes are listed. On and after any redemption date, interest will cease to accrue on the notes or portions thereof called for redemption. On or before the redemption date, we will deposit
with a paying agent (or the trustee) money sufficient to pay the redemption price of and accrued interest on the notes to be redeemed on that date. If less than all of the notes are to be redeemed,
the notes to be redeemed shall be selected by lot by DTC, in the case of notes represented by a global security, or by the trustee by such method as the trustee deems to be fair and appropriate, in
the case of notes that are not represented by a global security. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Optional Redemption for Tax Reasons  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of changes in withholding taxes applicable to payments of interest on the 2014 notes in Switzerland, the United States or
another Relevant Taxing Jurisdiction, Novartis Capital Corporation may redeem the 2014 notes in whole (but not in part) at any time, at a price equal to 100% of their principal amount plus accrued
interest to the redemption date. In the event of changes in withholding taxes applicable to payments of interest on the 2019 notes in Switzerland, Bermuda or another Relevant Taxing Jurisdiction,
Novartis Securities Investment Ltd. may redeem the 2019 notes in whole (but not in part) at any time, at a price equal to 100% of their principal amount plus accrued interest to the redemption date.
See "Description of Debt Securities&nbsp;&#151;&nbsp;Optional Redemption for Tax Reasons" in the accompanying prospectus. </FONT></P>


<P style="font-family:times;"><FONT SIZE=3><B>Further Issuances  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are initially offering the 2014 notes in the aggregate principal amount of $2,000,000,000 and the 2019 notes in the aggregate
principal amount of $3,000,000,000. We may from time to time, without the consent of the holders of a series of notes, create and issue further notes of the same series having the same terms and
conditions in all respects as the applicable notes being offered hereby, except for the issue date, the issue price and the first payment of interest thereon. We will not issue any further notes
unless such further notes have no more than a de minimis amount of original issue discount or such issuance would constitute a "qualified reopening" for U.S. federal income tax purposes. Additional
2014 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the 2014 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-15</FONT></P>

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<BR>

<P style="font-family:times;"><FONT SIZE=2>notes
being offered hereby. Additional 2019 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the 2019 notes being offered hereby. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Trustee, Principal Paying Agent and Transfer Agent  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HSBC Bank USA, National Association is the trustee under the indenture and the principal corporate trust office of the trustee in The
City of New York is also designated as the principal paying agent, registrar, transfer agent and calculation agent for the notes. We may at any time designate additional agents or rescind the
designation of any agents or approve a change in the office through which any agent acts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Book-Entry System  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will issue the notes of each series in the form of one or more fully registered global securities. We will deposit these global
securities with, or on behalf of, DTC and register these securities in the name of DTC's nominee. Direct and indirect participants in DTC will record beneficial ownership of the notes by individual
investors. The transfer of ownership of beneficial interests in a global security will be effected only through records maintained by DTC or its nominee, or by participants or persons that hold
through participants. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors
may elect to hold beneficial interests in the global securities through either DTC, Clearstream or Euroclear if they are participants in these systems, or indirectly through
organizations which are participants in these systems. Beneficial interests in the global securities will be held in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
receipt of any payment in respect of a global security, DTC or its nominee will immediately credit participants' accounts with amounts proportionate to their respective beneficial
interests in the principal amount of the global security as shown in the records of DTC or its nominee. Payments by participants to owners of beneficial interests in a global security held through
participants will be governed by standing instructions and customary practices and will be the responsibility of those participants. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC
holds securities of institutions that have accounts with it or its participants. Through its maintenance of an electronic book-entry system, DTC facilitates the clearance
and settlement of securities transactions among its participants and eliminates the need to deliver securities certificates physically. DTC's participants include securities brokers and dealers,
including the underwriters of this offering, banks, trust companies, clearing corporations and other organizations. DTC is owned by a number of its participants and by the New York Stock
Exchange,&nbsp;Inc., the American Stock Exchange,&nbsp;Inc. and the Financial Industry Regulatory Authority,&nbsp;Inc. Access to DTC's book-entry system is also available to others
such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. DTC agrees with and represents to its
participants that it will administer its book-entry system in accordance with its rules and bylaws and requirements of law. The rules applicable to DTC and its participants are on file
with the SEC. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clearstream
and Euroclear will hold interests on behalf of their participants through customers' securities accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries, which in turn will hold interests in customers' securities accounts in the depositaries' names on the books of DTC. At the present time, Citibank, N.A. acts as U.S. depositary
for Clearstream and JPMorgan Chase Bank, N.A. acts as U.S. depositary for Euroclear, or, collectively, the "U.S. Depositaries." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-16</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clearstream
holds securities for its participating organizations, or "Clearstream Participants," and facilitates the clearance and settlement of securities transactions between
Clearstream Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream
provides to Clearstream Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clearstream
is registered as a bank in Luxembourg and as such is subject to regulation by the </FONT><FONT SIZE=2><I>Commission de Surveillance du Secteur
Financier</I></FONT><FONT SIZE=2> and the </FONT><FONT SIZE=2><I>Banque Centrale du Luxembourg</I></FONT><FONT SIZE=2>, which supervise and oversee the activities of Luxembourg banks. Clearstream
Participants are worldwide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, and may include the underwriters or their
affiliates. Indirect access to Clearstream is available to other institutions that clear through or maintain a custodial relationship with a Clearstream Participant. Clearstream has established an
electronic bridge with Euroclear as the operator of the Euroclear System, or the "Euroclear Operator," in Brussels to facilitate settlement of trades between Clearstream and the Euroclear Operator. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
with respect to the notes of a series held beneficially through Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its rules and
procedures, to the extent received by the U.S. Depositary for Clearstream. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Euroclear
holds securities and book-entry interests in securities for participating organizations, or "Euroclear Participants" and facilitates the clearance and settlement of
securities transactions between Euroclear Participants, and between Euroclear Participants and participants of certain other securities intermediaries through electronic book-entry changes
in accounts of such participants or other securities intermediaries. Euroclear provides Euroclear Participants with, among other things, safekeeping, administration, clearance and settlement,
securities lending and borrowing, and related services. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Euroclear
Participants are investment banks, securities brokers and dealers, banks, central banks, supranationals, custodians, investment managers, corporations, trust companies and
certain other organizations and may include the underwriters or their affiliates. Non-participants in Euroclear may hold and transfer beneficial interests in a global security through
accounts with a Euroclear Participant or any other securities intermediary that holds a book-entry interest in a global security through one or more securities intermediaries standing
between such other securities intermediary and Euroclear. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
with respect to notes of a series held beneficially through Euroclear will be credited to the cash accounts of Euroclear Participants in accordance with the Terms and
Conditions, to the extent received by the U.S. Depositary for Euroclear. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers
between Euroclear Participants and Clearstream Participants will be effected in the ordinary way in accordance with their respective rules and operating procedures. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cross-market
transfers between DTC's participating organizations, or the "DTC Participants," on the one hand, and Euroclear Participants or Clearstream Participants, on the other hand,
will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its U.S. Depositary; however, such cross-market transactions will require
delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (European
time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-17</FONT></P>

<HR NOSHADE>
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<BR>

<P style="font-family:times;"><FONT SIZE=2>requirements,
deliver instructions to its U.S. Depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the global security in DTC, and making or
receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear Participants and Clearstream Participants may not deliver instructions
directly to their respective U.S. Depositaries. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due
to time zone differences, the securities accounts of a Euroclear Participant or Clearstream Participant purchasing an interest in a global security from a DTC Participant in DTC will
be credited, and any such crediting will be reported to the relevant Euroclear Participant or Clearstream Participant during the securities settlement processing day (which must be a business day for
Euroclear or Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a global security by or through a Euroclear
Participant or Clearstream Participant to a DTC Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only
as of the business day for Euroclear or Clearstream following DTC's settlement date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information in this section concerning DTC, Euroclear and Clearstream and their book-entry systems has been obtained from sources that we believe to be reliable, but we
take no responsibility for the accuracy of that information. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None
of us, any of the underwriters and the trustee will have any responsibility for the performance by Euroclear or Clearstream or their respective participants of their respective
obligations under the rules and procedures governing their operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of securities among participants of DTC, Clearstream and Euroclear, they
are under no obligation to perform or continue to perform such procedures and they may discontinue the procedures at any time. </FONT></P>


<P style="font-family:times;"><FONT SIZE=3><B>Same-Day Settlement and Payment  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial settlement for the notes will be made in immediately available funds. Secondary market trading between DTC participants will
occur in the ordinary way in accordance with DTC rules and will be settled in immediately available funds using DTC's Same-Day Funds Settlement System. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-18</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_cm12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  TAX CONSIDERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summary of material considerations relating to U.S. federal income tax, Bermuda tax and Swiss tax and the European Union
Savings Tax Directive is based upon laws, regulations, decrees, rulings, administrative practice and judicial decisions in effect at the date of this prospectus supplement. Legislative, judicial or
administrative changes or interpretations may, however, be forthcoming. Any such changes or interpretations could affect the tax consequences to holders of the notes, possibly on a retroactive basis,
and could alter or modify the statements and conclusions set forth herein. This summary does not purport to be a legal opinion or to address all tax aspects that may be relevant to a holder of the
notes. Prospective purchasers of the notes are advised to consult their own tax advisers as to the tax consequences, under the tax laws of the country of which they are resident, of a purchase of
notes including, without limitation, the consequences of the receipt of interest and (if applicable) any premium on, and of the sale or redemption of, the notes or any interest therein. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
summary in respect of Swiss tax considerations does not deal with the position of certain classes of noteholders, such as dealers, and relates only to those persons who are the
absolute beneficial owners of the notes and who hold the notes as an investment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>United States Taxation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> U.S. Holders  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion summarizes certain U.S. federal income tax considerations that may be relevant to you if you purchase notes in
the initial offering at the original issue price and are a "U.S. holder." You will be a "U.S. holder" if you are an individual who is a citizen or resident of the United States, a U.S. domestic
corporation, or any other person that is subject to U.S. federal income tax on a net income basis in respect of an investment in the notes. This summary deals only with U.S. holders that hold notes as
capital assets. It does not address considerations that may be relevant to you if you are an investor that is subject to special tax rules, such as a bank, thrift, real estate investment trust,
regulated investment company, insurance company, pass-through entity, dealer in securities or currencies, trader in securities or commodities that elects
mark-to-market treatment, person that will hold notes as a hedge against currency risk or as a position in a "straddle" or conversion transaction, tax-exempt
organization or a person whose "functional currency" is not the U.S. dollar. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should consult your tax adviser about the tax consequences of holding notes, including the relevance to your particular situation of the considerations discussed below, as well as
the relevance to your particular situation of state, local, non-U.S., or other tax laws. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Payments or Accruals of Interest  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments or accruals of interest on a note will be taxable to you as ordinary interest income at the time that you receive or accrue
such amounts (in accordance with your regular method of tax accounting). Interest income on the 2014 notes will be treated as U.S. source income and interest income on the 2019 notes will be treated
as foreign source income for U.S. federal income tax purposes, which may be relevant in calculating a U.S. holder's foreign tax credit limitation. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Sale or Exchange of Notes  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the sale, exchange or other taxable disposition of a note, you generally will recognize gain or loss equal to the difference
between the amount realized on the disposition (less any accrued interest, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-19</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>which
will be taxable as such) and your tax basis in such note (generally, its cost less any principal payments previously received). Any such gain or loss generally will be U.S.-source capital gain
or loss and will be long-term capital gain or loss (which long-term capital gain is currently subject to taxation at reduced rates for non-corporate taxpayers) if
you have held the note for more than one year. The deductibility of capital losses is subject to limitations. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Information Reporting and Backup Withholding  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A paying agent must file information returns with the U.S. Internal Revenue Service ("IRS") in connection with payments on the notes
made within the United States, or through certain U.S.-relevant financial intermediaries, to certain United States persons. If you are a United States person, you generally will not be subject to U.S.
backup withholding tax on such payments if you provide your taxpayer identification number to the paying agent. The amount of any backup withholding from a payment to a U.S. holder will be allowed as
a credit against the U.S. holder's U.S. federal income tax liability and may entitle the U.S. holder to a refund, provided that the required information is timely furnished to the IRS. You also may be
subject to information reporting and backup withholding tax requirements with respect to the proceeds from a sale of the notes. If you are not a United States person, you may have to comply with
certification procedures to establish that you are not a United States person in order to avoid information reporting and backup withholding tax requirements. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Non-U.S. Holders  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under current U.S. federal income tax law,  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>payment
on a 2014 note by us or any paying agent to a holder that is a non-U.S. holder (as defined below) will not be subject to withholding of
U.S. federal income tax, provided that, with respect to payments of interest, (i)&nbsp;the holder does not actually or constructively own 10% or more of the combined voting power of all classes of
our stock and is not a controlled foreign corporation related to us through stock ownership, (ii)&nbsp;the holder is not a bank extending credit to us in the ordinary course of its trade or
business, and (iii)&nbsp;the beneficial owner provides a statement signed under penalty of perjury that includes its name and address and certifies that it is a non-U.S. holder in
compliance with applicable requirements (or satisfies certain documentary evidence requirements for establishing that it is a non-U.S. holder); and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
holder of a note that is a non-U.S. holder will not be subject to U.S. federal income tax on gain realized on the sale, exchange or redemption
of the note, unless (i)&nbsp;such gain is effectively connected with the conduct by the holder of a trade or business in the United States or (ii)&nbsp;in the case of gain realized by an
individual holder, the holder is present in the United States for 183&nbsp;days or more in the taxable year of the sale and either (A)&nbsp;such gain or income is attributable to an office or
other fixed place of business maintained in the United States by such holder or (B)&nbsp;such holder has a tax home in the United States. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments
on a 2014 note owned by a non-U.S. holder will not be subject to information reporting requirements or backup withholding tax if the statement described in
clause&nbsp;(a) of the preceding paragraph is duly provided to the paying agent. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment
on a note by the U.S. office of a custodian, nominee or other agent of the beneficial owner of such note will be subject to information reporting requirements and backup
withholding tax unless the beneficial owner timely certifies its non-U.S. status under penalties of perjury or otherwise establishes an exemption. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-20</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
reporting requirements and backup withholding tax will not apply to any payment of the proceeds of the sale of a note effected outside the United States by a foreign office
of a foreign "broker" (as defined in applicable U.S. Treasury regulations), provided that such broker (i)&nbsp;derives less than 50% of its gross income for certain periods from the conduct of a
trade or business in the United States, (ii)&nbsp;is not a controlled foreign corporation for U.S. federal income tax purposes and (iii)&nbsp;is not a foreign partnership that, at any time during
its taxable year, is more than 50% (by income or capital interest) owned by U.S. persons or is engaged in the conduct of a U.S. trade or business. Payment of the proceeds of the sale of a note
effected outside the United States by a foreign office of any other broker will not be subject to backup withholding tax, but will be subject to information reporting
requirements unless such broker has documentary evidence in its records that the beneficial owner is a non-U.S. holder and certain other conditions are met, or the beneficial owner
otherwise establishes an exemption. Payment of the proceeds of a sale of a note by the U.S. office of a broker will be subject to information reporting requirements and backup withholding tax unless
the beneficial owner certifies its non-U.S. status under penalties of perjury or otherwise establishes an exemption. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of applying the rules set forth under the heading "non-U.S. holders" to an entity that is treated as fiscally transparent (e.g.,&nbsp;a partnership) for U.S.
federal income tax purposes, the beneficial owner means each of the ultimate beneficial owners of the entity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the discussion under this heading "non-U.S. holders" a "non-U.S. holder" is a holder of a note or coupon that is not a U.S. holder (as defined
above). </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>Bermuda Taxation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under current law, no income, withholding or other taxes or stamp, registration or other duties are imposed in Bermuda
upon the issue, transfer or sale of the 2019 notes, or payments made in respect of the 2019 notes. As of the date hereof, there is no Bermuda income, company or profits tax, withholding tax, capital
gains tax, capital transfer tax, estate duty or inheritance tax payable in respect of capital gains realized on a disposition of securities issued by Novartis Securities Investment&nbsp;Ltd. or in
respect of distributions by Novartis Securities Investment&nbsp;Ltd. with respect to its securities. Furthermore, Novartis Securities Investment&nbsp;Ltd. has received from the Minister of Finance
of Bermuda under the Exempted Undertakings Tax Protection Act of 1966 an undertaking that, in the event of there being enacted in Bermuda any legislation imposing any tax computed on profits or
income, including any dividend or capital gains withholding tax, or computed on any capital assets, gain or appreciation or any tax in the nature of an estate or inheritance tax or duty, the
imposition of such tax shall not be applicable to Novartis Securities Investment&nbsp;Ltd. or any of its operations or obligations until March&nbsp;28, 2016. This undertaking applies to securities
issued by Novartis Securities Investment&nbsp;Ltd. It does not, however, prevent the application of Bermuda taxes to persons ordinarily resident in Bermuda. As an exempted company, Novartis
Securities Investment&nbsp;Ltd. is liable to pay, in Bermuda, an annual registration fee which is currently U.S.$4,070. </FONT></P>


<P style="font-family:times;"><FONT SIZE=3><B>Swiss Taxation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Swiss Withholding Tax  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the present practice of the Swiss Federal Tax Administration, payments of principal and interest (and discount or premium,
if any) or gains in respect of the notes by the relevant Issuer or the Guarantor are not subject to Swiss Withholding Tax (</FONT><FONT SIZE=2><I>Verrechnungssteuer</I></FONT><FONT SIZE=2>), if the
proceeds from the notes are neither directly nor indirectly used in Switzerland. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-21</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><B> EU Savings Tax for Swiss Paying Agents  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payment of interest (and discount or premium, if any) in respect of the notes by the relevant Issuer or the Guarantor or the
payment of accrued interest upon a sale of the notes by the purchaser may be subject to a deduction of 20% until July&nbsp;1, 2011 or 35% thereafter, if such payment is made to an EU resident
individual (or certain entities or vehicles) via a Swiss paying agent. The deduction is not applied if the recipient of the payment voluntarily elects to have details on the payment transmitted to the
tax authorities of his state of residence. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Issue or Transfer Stamp Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue of notes is not subject to Issue or Transfer Stamp Taxes, provided that proceeds from the notes are neither directly nor
indirectly used in Switzerland. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secondary
market transactions in notes may be subject to Transfer Stamp Tax of up to 0.3% of the consideration paid, if a Swiss or Liechtenstein securities dealer (as defined in the
Swiss Stamp Tax Act) is involved in the transaction as party or as intermediary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption
of notes is not subject Issue or Transfer Stamp Taxes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Personal Income Tax  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under present Swiss tax law, an individual noteholder who is not Swiss tax resident and who, during the tax year, has not engaged in
trade or business through a permanent establishment, sole proprietorship or partnership in Switzerland and who is not subject to Swiss taxation for any other reason, will not become subject to Swiss
personal income tax on the interest (and discount or premium, if any) or gains from the notes because of the mere acquisition, ownership or disposal of notes. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Swiss tax resident individual who holds notes as part of his private assets is subject to income tax on the interest (and discount or premium, if any) derived from the notes as part of
his overall net income. A gain realized upon a sale of notes by such individual is not subject to income tax. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Swiss tax resident individual holding notes as part of his Swiss business assets (including a professional securities dealer) is subject to income tax on any interest (and discount or
premium, if any) and gain derived from the notes as part of the overall income. Losses incurred on notes by such investors are tax deductible, if certain conditions are met. Similar rules apply to
foreign resident individuals, which have a permanent establishment or business in Switzerland with which the notes are effectively connected. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Profit Tax  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under present Swiss tax law, a corporate noteholder who is not Swiss tax resident and who, during the tax year, has not engaged in
trade or business through a permanent establishment or partnership in Switzerland and who is not subject to Swiss taxation for any other reason, will not become subject to Swiss profit tax on the
interest (and discount or premium, if any) or gain from the notes because of the mere acquisition, ownership or disposal of notes. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Swiss tax resident corporate entity holding notes is subject to profit tax on any profit (interest, discount, premium and gains) derived from the notes as part of the overall profit.
Losses incurred on notes by such investors are tax deductible, if certain conditions are met. Similar rules apply to foreign </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-22</FONT></P>

<HR NOSHADE>
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<BR>

<P style="font-family:times;"><FONT SIZE=2>resident
corporate entities, which have a permanent establishment or business in Switzerland with which the notes are effectively connected. </FONT></P>

<P style="font-family:times;"><FONT SIZE=3><B>European Union Savings Tax Directive  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;3, 2003, the Council of the European Union adopted a directive (Directive 2003/48/EC) on the taxation of
savings income (the "EU Savings Tax Directive"). Pursuant to the directive, a member state of the European Union (the "EU") will be required to provide to the tax authorities of other EU member states
information regarding payments of interest (or other similar income) paid by a person within its jurisdiction to individual residents of such other EU member states, except that Belgium, Luxembourg
and Austria will instead operate a withholding tax system for a transitional period in relation to such payments. EU member states were required to put the EU Savings Tax Directive into effect by
July&nbsp;1, 2005. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October&nbsp;26, 2004, the European Community and Switzerland entered into an agreement on the taxation of savings income by way of a withholding tax system and voluntary
declaration in the case of transactions between parties in the EU member states and Switzerland. On the basis of such agreement, Switzerland has introduced a withholding tax on interest payments or
other similar income paid by a paying agent within Switzerland to EU resident individuals as of July&nbsp;1, 2005. The withholding tax is to be withheld at a rate of 20% until July&nbsp;1, 2011
and at a rate of 35% thereafter. The beneficial owner of the interest payments may be entitled to a tax credit or refund of the withholding if certain conditions are met. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prospective
purchasers of the notes should consult their advisors concerning the impact of the EU Savings Tax Directive. If any of Novartis Capital Corporation, Novartis Securities
Investment Ltd., Novartis AG, any paying agent or any institution where the notes are deposited are required to withhold any amount as a direct or indirect consequence of the EU Savings Tax Directive,
we will not be required to pay any additional amounts relating to such withholding. See "Description of Debt Securities&nbsp;&#151; Covenants&nbsp;&#151; Payment of Additional
Amounts" in the accompanying prospectus. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-23</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co12001_underwriting"> </A>
<A NAME="toc_co12001_1"> </A>
<BR></FONT><FONT SIZE=2><B>  UNDERWRITING    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms and subject to the conditions contained in an underwriting agreement dated February&nbsp;4, 2009, we have agreed to
sell to the underwriters named below, for whom J.P. Morgan Securities&nbsp;Inc., Banc of America Securities&nbsp;LLC, Citigroup Global Markets&nbsp;Inc. and Goldman, Sachs&nbsp;&amp;&nbsp;Co.
are acting as representatives, the following respective principal amounts of the notes: </FONT></P>

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<TD WIDTH="67" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
<TD WIDTH="5" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=1><B>Underwriter

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Principal amount of 2014 Notes </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Principal amount of 2019 Notes </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>J.P. Morgan Securities&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>600,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>900,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Banc of America Securities&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>360,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>540,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Citigroup Global Markets&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>360,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>540,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goldman, Sachs&nbsp;&amp;&nbsp;Co.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>360,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>540,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Barclays Capital&nbsp;Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>120,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Credit Suisse Securities (USA)&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>120,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Morgan Stanley&nbsp;&amp;&nbsp;Co. Incorporated</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>120,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>UBS Securities&nbsp;LLC</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>120,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,000,000,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriting agreement provides that the underwriters are obligated to purchase all of the notes if any are purchased. The underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering of notes may be terminated. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters propose to offer each series of notes initially at the respective price to public listed on the cover page of this prospectus supplement and to other broker-dealers at
the applicable price to public less a selling concession of 0.20% of the principal amount per 2014 note and 0.30% of the principal amount per 2019 note. The underwriters and the other broker-dealers
may allow a discount of 0.125% of the principal amount per 2014 note and 0.125% of the principal amount per 2019 note on sales to other broker-dealers. After the initial public offering, the
underwriters may change the price to public and concession and discount to broker-dealers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
estimate that our expenses (which consist of, among other fees, SEC registration fees, legal fees and expenses, accounting fees and expenses and printing expenses) for this offering,
excluding
underwriting discounts, will be approximately $1,500,000. The underwriters have agreed to reimburse us for a portion of our expenses in connection with this offering. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
notes are a new issue of securities with no established trading market. The notes will not be listed on any securities exchange or interdealer market quotation system. One or more of
the underwriters intends to make a secondary market for the notes. However, they are not obligated to do so and may discontinue making a secondary market for the notes at any time without notice. No
assurance can be given as to how liquid the trading market for the notes will be. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
underwriter has agreed that it will not offer or sell, directly or indirectly, any of the notes in any jurisdiction where such offer or sale is not permitted. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to indemnify the underwriters against liabilities under the Securities Act of 1933, as amended (the "Securities Act"), or contribute to payments that the underwriters may
be required to make in that respect. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-24</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the ordinary course of their respective businesses, the underwriters and their affiliates have engaged, and in the future may engage, in commercial banking and/or investment banking
transactions with us and our affiliates. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in
accordance with Regulation&nbsp;M under the Exchange Act. <BR></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. <BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Over-allotment involves sales by the underwriters of notes in excess of the principal amount of notes the
underwriters are obligated to
purchase, which creates a syndicate short position. <BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Syndicate covering transactions involve purchases of notes in the open market after the distribution has been completed in
order to cover syndicate short positions. <BR><BR> </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the notes originally
sold by such syndicate member are purchased in a stabilizing or a syndicate covering transaction to cover syndicate short positions. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of the notes or preventing or retarding a
decline in the market price of the notes. As a result, the price of the notes may be higher than the price that might otherwise exist in the open market. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is no assurance that the underwriters will undertake stabilization action. Such stabilizing, if commenced, may be discontinued at any time and, if begun, must be brought to an end
after a limited period. Any stabilization action or over-allotment must be conducted by the underwriters in accordance with all applicable laws and rules. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect that delivery of the notes will be made against payment therefor on or about February&nbsp;10, 2009, which is the fourth business day after the date hereof. Under
Rule&nbsp;15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree
otherwise. Accordingly, purchasers who wish to trade the notes on the date hereof or the next following business day will be required, by virtue of the fact that the notes initially will not settle in
T+3, to specify an alternative settlement cycle at the time of such trade to prevent a failed settlement and should consult their own adviser. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co12001_selling_restrictions"> </A>
<A NAME="toc_co12001_2"> </A>
<BR></FONT><FONT SIZE=2><B>  SELLING RESTRICTIONS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> European Economic Area  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each a "Relevant Member
State"), each underwriter has represented and agreed that, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, or (the "Relevant
Implementation Date"), it has not made and will not make </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-25</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>an
offer of notes which are the subject of the offering contemplated by this prospectus supplement to the public in that Relevant Member State other than: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time to any legal entity that has two or more of (i)&nbsp;an average of at least 250 employees during the last financial year; (ii)&nbsp;a total
balance sheet of more than &euro;43,000,000 and (iii)&nbsp;an annual net turnover of more than &euro;50,000,000, as shown in its last annual or consolidated accounts;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the
prior consent of the representatives of the underwriters; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in
any other circumstances falling within Article&nbsp;3(2) of the Prospectus Directive, provided that no such offer of notes shall require us or any
underwriter to publish a prospectus pursuant to Article&nbsp;3 of the Prospectus Directive or supplement a prospectus pursuant to Article&nbsp;16 of the Prospectus Directive. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the purposes of this provision, the expression an "offer of notes to the public" in relation to any notes in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and notes to be offered so as to enable an investor to decide to purchase or subscribe the notes, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in
each Relevant Member State. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> United Kingdom  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each underwriter has represented and agreed, and each further underwriter appointed under the notes will be required to represent and
agree, that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>it
has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section&nbsp;21 of the Financial Services and Markets Act of 2000 (the "FSMA")) received by it in connection with the issue or sale of any securities in
circumstances in which section&nbsp;21(1) of the FSMA does not apply to Novartis Capital Corporation, Novartis Securities Investment Ltd. or Novartis AG.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>it
has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the securities in, from or
otherwise involving the United Kingdom. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> The Grand Duchy of Luxembourg  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the cases described in the European Economic Area selling restriction in which the underwriters can make an offer of
notes to the public in an EEA member state (including the Grand </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-26</FONT></P>

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<BR>

<P style="font-family:times;"><FONT SIZE=2>Duchy
of Luxembourg) ("Luxembourg"), the underwriters can also make an offer of notes to the public in Luxembourg: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time, to national and regional governments, central banks, international and supranational institutions (such as the International Monetary Fund, the
European Central Bank, the European Investment Bank) and other similar international organizations;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time, to legal entities which are authorized or regulated to operate in the financial markets (including credit institutions, investment firms, other
authorized or regulated financial institutions, undertakings for collective investment and their management companies, pension and investment funds and their management companies, insurance
undertakings and commodity dealers) as well as entities not so authorized or regulated whose corporate purpose is solely to invest in securities; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>at
any time, to certain natural persons or small and medium-sized enterprises (as defined in the Luxembourg act dated 10&nbsp;July 2005 on prospectuses
for securities implementing the Directive 2003/71/EC (the "Prospectus Directive") into Luxembourg law) recorded in the register of natural persons or small and medium-sized enterprises considered as
qualified investors as held by the </FONT><FONT SIZE=2><I>Commission de surveillance du secteur financier</I></FONT><FONT SIZE=2> as competent authority in Luxembourg in accordance with the
Prospectus Directive. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Switzerland  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement and the accompanying prospectus do not constitute an issue prospectus pursuant to Article&nbsp;652a or
Article&nbsp;1156 of the Swiss Code of Obligations. The notes will not be listed on the SIX Swiss Exchange and, therefore, this prospectus supplement and the accompanying prospectus may not comply
with the disclosure standards of the listing rules (including any additional listing rules or prospectus schemes) of the SIX Swiss Exchange. Accordingly, the notes may not be offered to the public in
or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe to the notes with a view to distribution. The investors will be individually approached by any
underwriter from time to time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Hong Kong  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes may not be offered or sold by means of any document other than (i)&nbsp;in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii)&nbsp;to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii)&nbsp;in other circumstances which do not result in this prospectus supplement and the accompanying prospectus being a "prospectus" within
the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the notes may be issued or may be in the possession of any person for the
purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to
do so under the laws of Hong Kong) other than with respect to notes which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning
of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-27</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P style="font-family:times;"><FONT SIZE=2><B> Japan  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes have not been and will not be registered under the Securities and Exchange Law of Japan (the Securities and Exchange Law) and
each underwriter has agreed that it will not offer or sell any notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person
resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident
of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and
ministerial guidelines of Japan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Singapore  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this prospectus supplement and the accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase,
of the notes may not be circulated or distributed, nor may the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i)&nbsp;to an institutional investor under Section&nbsp;274 of the Securities and Futures Act, Chapter&nbsp;289 of Singapore (the "SFA"), (ii)&nbsp;to a
relevant person, or any person pursuant to Section&nbsp;275(1A), and in accordance with the conditions, specified in Section&nbsp;275 of the SFA or (iii)&nbsp;otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision of the SFA. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where
the notes are subscribed or purchased under Section&nbsp;275 by a relevant person which is: (a)&nbsp;a corporation (which is not an accredited investor) the sole business of
which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b)&nbsp;a trust (where the trustee is not an
accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for 6&nbsp;months after that corporation or that trust has acquired the notes under Section&nbsp;275 except:
(1)&nbsp;to an institutional investor under Section&nbsp;274 of the SFA or to a relevant person, or any person pursuant to Section&nbsp;275(1A), and in accordance with the conditions, specified
in Section&nbsp;275 of the SFA; (2)&nbsp;where no consideration is given for the transfer; or (3)&nbsp;by operation of law. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-28</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  LEGAL MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain matters of U.S. law will be passed upon for us by Allen&nbsp;&amp; Overy&nbsp;LLP and for the underwriters by Shearman&nbsp;&amp;
Sterling&nbsp;LLP. Shearman&nbsp;&amp; Sterling&nbsp;LLP has performed legal services for us and our subsidiaries and affiliates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  EXPERTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting
(which is included in management's report on internal control over financial reporting) incorporated in this prospectus supplement and the accompanying prospectus by reference to the Annual Report on
Form&nbsp;20-F for the year ended December&nbsp;31, 2008 have been so incorporated in reliance on the report of PricewaterhouseCoopers AG, Switzerland, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-29</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>PROSPECTUS  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>
<IMG SRC="g1021248.jpg" ALT="GRAPHIC" WIDTH="198" HEIGHT="34">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Novartis Capital Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Debt Securities  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Fully and Unconditionally Guaranteed by </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Novartis AG  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><I>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Novartis Securities Investment&nbsp;Ltd.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Debt Securities  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Fully and Unconditionally Guaranteed by </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Novartis AG  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><I>


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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Novartis Finance&nbsp;S.A.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=3><B>Debt Securities  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Fully and Unconditionally Guaranteed by </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B>Novartis AG  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><I>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may offer debt securities from time to time in one or more series through this prospectus. The debt securities will be issued by one of
Novartis AG's finance subsidiaries, Novartis Capital Corporation, Novartis Securities Investment&nbsp;Ltd. or Novartis Finance&nbsp;S.A., and will be fully and unconditionally guaranteed by
Novartis AG. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will provide the specific terms of the debt securities we offer in one or more supplements to this prospectus. You should read this prospectus and any related prospectus supplement
carefully before you invest. Our debt securities may be denominated in U.S. dollars or in any other currencies, currency units or composite currencies as we may designate. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may offer these debt securities through underwriters, agents or dealers or directly to institutional purchasers. The accompanying prospectus supplement will set forth the names of any
underwriters or agents and any applicable commissions or discounts. The prospectus supplement will also set forth the proceeds we will receive from any sale of debt securities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities
or determined if this prospectus or any accompanying prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>The date of this prospectus is September&nbsp;26, 2008. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  Table of Contents    <BR>    </B></FONT></P>

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<A NAME="BG12002_TOC"></A> </FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Page </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_about_this_prospectus"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>About this Prospectus</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_about_this_prospectus"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_where_you_can_find_more_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_where_you_can_find_more_information"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_incorporation_of_certain_documents_by_reference"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Incorporation of Certain Documents by Reference</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>3</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_presentation_of_financial_information"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Presentation of Financial Information</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_presentation_of_financial_information"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da12002_forward-looking_statements"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forward-Looking Statements</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da12002_forward-looking_statements"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_use_of_proceeds"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_use_of_proceeds"><FONT SIZE=2>6</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_ratios_of_earnings_to_fixed_charges"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ratios of Earnings to Fixed Charges</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>6</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_novartis_ag"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis AG</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_ag"><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_novartis_capital_corporation"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Capital Corporation</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_capital_corporation"><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_novartis_securities_investment_ltd."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Securities Investment&nbsp;Ltd.&nbsp;</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_securities_investment_ltd."><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc12002_novartis_finance_s.a."><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Novartis Finance&nbsp;S.A.&nbsp;</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc12002_novartis_finance_s.a."><FONT SIZE=2>7</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#de12002_legal_ownership_of_debt_securities"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Ownership of Debt Securities</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#de12002_legal_ownership_of_debt_securities"><FONT SIZE=2>8</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dg12002_description_of_debt_securities"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Debt Securities</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dg12002_description_of_debt_securities"><FONT SIZE=2>11</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dk12002_tax_considerations"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax Considerations</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dk12002_tax_considerations"><FONT SIZE=2>22</FONT></A></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dm12002_plan_of_distribution"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Plan of Distribution</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_plan_of_distribution"><FONT SIZE=2>23</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_legal_matters"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Matters</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_legal_matters"><FONT SIZE=2>24</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_experts"><FONT SIZE=2>24</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dm12002_limitations_on_enforcement_of_u.s._laws"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Limitations on Enforcement of U.S. Laws</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dm12002_limitations_on_enforcement_of_u.s._laws"><FONT SIZE=2>25</FONT></A></TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with
different information. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of these documents. We are
not making an offer of these securities in any state or jurisdiction where the offer is not permitted. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da12002_about_this_prospectus"> </A>
<A NAME="toc_da12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  ABOUT THIS PROSPECTUS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the "SEC," using a
"shelf" registration process. Under this shelf process, we may sell any combination of the debt securities described in this prospectus in one or more offerings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus provides you with a general description of the debt securities we may offer. Each time we sell securities, we will provide a prospectus supplement, attached to the front
of this prospectus, that will contain specific information about the terms of that offering. Those terms may vary from the terms described in this prospectus. As a result, the summary description of
the debt securities in this prospectus is subject to, and qualified by reference to, the descriptions of the particular terms of any debt securities contained in any related prospectus supplement. The
prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any related prospectus supplement together with the additional
information described under the headings "Where You Can Find More Information" and "Incorporation of Certain Documents by Reference." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus does not include all of the information contained in the registration statement of which it is a part. We refer you to the registration statement and the related exhibits
for a more complete understanding of our debt securities and the shelf registration process. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used in this prospectus, the term "finance subsidiaries" refers to Novartis Capital Corporation, a Delaware corporation, Novartis Securities Investment&nbsp;Ltd., a limited
liability company incorporated under the laws of Bermuda and Novartis Finance&nbsp;S.A., a public limited liability company (</FONT><FONT SIZE=2><I>soci&eacute;t&eacute;
anonyme</I></FONT><FONT SIZE=2>) incorporated under the laws of Luxembourg. Any debt securities issued by one of the finance subsidiaries will be fully and unconditionally guaranteed by Novartis AG, a
stock corporation (</FONT><FONT SIZE=2><I>Aktiengesellschaft</I></FONT><FONT SIZE=2>) incorporated under the laws of Switzerland. The term "guarantor" refers to Novartis AG. Unless the context
requires otherwise, the terms "we," "our" and "us" refer to Novartis AG and its consolidated subsidiaries. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da12002_where_you_can_find_more_information"> </A>
<A NAME="toc_da12002_2"> </A>
<BR></FONT><FONT SIZE=2><B>  WHERE YOU CAN FIND MORE INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual reports with and furnish other reports and information to the SEC. You may read and copy any document we file with or
furnish to the SEC at the SEC's public reference room at 100&nbsp;F&nbsp;Street, N.E., Room&nbsp;1580, Washington, D.C. 20549. You may also obtain documents we file with or furnish to the SEC on
the SEC website at www.sec.gov. The address of the SEC's internet site is provided solely for the information of prospective investors and is not intended to be an active link. Please visit this
website or call the SEC at 1-800-732-0330 for further information about its public reference room. Reports and other information concerning our business may also be
inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da12002_incorporation_of_certain_documents_by_reference"> </A>
<A NAME="toc_da12002_3"> </A>
<BR></FONT><FONT SIZE=2><B>  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to "incorporate by reference" the information we file with or furnish to the SEC, which means that we can disclose
important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we later file with or furnish
to the SEC and that is incorporated by reference will automatically update and supersede information in this prospectus and information previously incorporated by reference herein. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such documents is not intended to create any implication
that there has been no change in our affairs since the date of the relevant document or that the information contained in such document is current as of any time subsequent to its date. Any statement
contained </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3</FONT></P>

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<BR>

<P style="font-family:times;"><FONT SIZE=2>in
such incorporated documents is deemed to be modified or superseded for the purpose of this prospectus to the extent that a subsequent statement contained in another document we incorporate by
reference at a later date modifies or supersedes that statement. Any such statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this
prospectus. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby incorporate by reference into this prospectus the documents listed below. Unless otherwise noted, all of the documents listed below have the SEC file
number&nbsp;001-15024: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Annual Report on Form&nbsp;20-F for the year ended December&nbsp;31, 2007;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Report on Form&nbsp;6-K furnished to the SEC on May&nbsp;30, 2008 with the amended and restated articles
of incorporation of Novartis AG; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Each of the following documents that we file with or furnish to the SEC after the date of this prospectus from now until
we terminate the offering of securities under this prospectus and the registration statement: </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reports filed under Section&nbsp;13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended,
and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reports filed or furnished on Form&nbsp;6-K that indicate that they are incorporated by reference in this
prospectus. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may obtain copies of these documents in the manner described above. You may also request copies of these documents (excluding exhibits) at no cost by contacting us as follows: </FONT></P>

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<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>Novartis International AG<BR>
Investor Relations<BR>
P.O.&nbsp;Box<BR>
CH - 4002 Basel<BR>
Switzerland<BR>
Tel: +41 61 324 79 44<BR>
Fax: +41 61 324 84 44<BR>
E-mail: investor.relations@novartis.com</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Novartis Finance Corporation<BR>
Investor Relations<BR>
608 Fifth Avenue<BR>
New York, NY 10020<BR>
USA<BR>
Tel: +1 212 307 1122<BR>
Fax: +1 212 830 2405<BR>
E-mail: investor.relations@novartis.com</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da12002_presentation_of_financial_information"> </A>
<A NAME="toc_da12002_4"> </A>
<BR></FONT><FONT SIZE=2><B>  PRESENTATION OF FINANCIAL INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We present our consolidated financial statements in U.S. dollars and in accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board. When we refer to "$," we mean U.S. dollars. Except where noted, all financial information is presented in accordance with IFRS. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da12002_forward-looking_statements"> </A>
<A NAME="toc_da12002_5"> </A>
<BR></FONT><FONT SIZE=2><B>  FORWARD-LOOKING STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus and the information incorporated by reference in this prospectus include certain "forward-looking statements" within
the meaning of Section&nbsp;27A of the Securities Act of 1933, as amended, and Section&nbsp;21E of the Securities Exchange Act of 1934, as amended. You should not place undue reliance on these
statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements can be identified by the use of
forward-looking terminology such as "will," "believes," "intends," "plans," or "expects," or similar expressions, or by express or implied discussions regarding potential new products, potential new
indications for existing products, or regarding potential future revenues from any such products, or potential future sales or earnings of Novartis AG, its subsidiaries or any of our divisions or
business units; or by discussions of strategy, plans, expectations
or intentions. Such forward-looking statements reflect our current views regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to
be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that any new products will be approved for sale in any
market, or that any new indications will be approved for existing products in any market, or that such products will achieve any particular revenue levels. Nor can there be any guarantee that the
Novartis Group, or any of its divisions or business units, will achieve any particular financial results. In particular, management's expectations could be affected by, among other things,
uncertainties involved in the development of new pharmaceutical products; unexpected clinical trial results, including additional analysis of existing clinical data or unexpected new clinical data;
unexpected regulatory actions or delays or government regulation generally; our ability to obtain or maintain patent or other proprietary intellectual property protection, including the uncertainties
involved in the US litigation process; competition in general; government, industry, and general public pricing and other political pressures; and the impact that the foregoing factors could have on
the values attributed to the assets and liabilities of Novartis AG and its subsidiaries as recorded on our consolidated balance sheet. Some of these factors are discussed in more detail in our Annual
Report on Form&nbsp;20-F for the year ended December&nbsp;31, 2007, including under "Item&nbsp;3.D. Risk Factors," "Item&nbsp;4. Information on the Company," and "Item&nbsp;5.
Operating and Financial Review and Prospects." Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from
those described in this prospectus or in the documents incorporated herein by reference as anticipated, believed, estimated or expected. The information in this prospectus, any applicable prospectus
supplement and any document incorporated herein by reference is current only as of the date of such and we do not intend, and do not assume any obligation, to update any information or forward-looking
statements included in any such documents. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_use_of_proceeds"> </A>
<A NAME="toc_dc12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless we tell you otherwise in a prospectus supplement, we will use the net proceeds from the sale of the debt securities described in
this prospectus for general corporate purposes outside of Switzerland. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_ratios_of_earnings_to_fixed_charges"> </A>
<A NAME="toc_dc12002_2"> </A>
<BR></FONT><FONT SIZE=2><B>  RATIOS OF EARNINGS TO FIXED CHARGES    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our consolidated ratio of earnings to fixed charges for each of the periods indicated using financial
information extracted, where applicable, from our IFRS consolidated financial statements. </FONT></P>

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<TD WIDTH="54" style="font-family:times;"></TD>
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<TD WIDTH="28" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
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<TD WIDTH="28" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
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<TD WIDTH="28" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
<TD WIDTH="5" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28" style="font-family:times;"></TD>
<TD WIDTH="15" style="font-family:times;"></TD>
<TD WIDTH="5" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="28" style="font-family:times;"></TD>
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<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six Months Ended June&nbsp;30, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended December&nbsp;31, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2005 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2004<SUP>1</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2003<SUP>1</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>31.5</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21.4</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>17.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.2</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT SIZE=1>We
adopted a number of new International Financial Reporting Standards from January&nbsp;1, 2005, not all of which required retrospective
application. Data for 2004 and 2003 is therefore not comparable with 2007, 2006 and 2005. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining the ratio of earnings to fixed charges, earnings have been calculated by adding (i)&nbsp;income from continuing
operations before taxes (after eliminating our share of results from associated companies), (ii)&nbsp;fixed charges and (iii)&nbsp;dividends from associated companies. Fixed charges are defined as
the total of (i)&nbsp;interest expense and (ii)&nbsp;an estimate of the interest within rental expense. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_novartis_ag"> </A>
<A NAME="toc_dc12002_3"> </A>
<BR></FONT><FONT SIZE=2><B>  NOVARTIS AG    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis AG was incorporated on February&nbsp;29, 1996 under the laws of Switzerland as a stock corporation
(</FONT><FONT SIZE=2><I>Aktiengesellschaft</I></FONT><FONT SIZE=2>). On December&nbsp;20, 1996, our predecessor
companies, Ciba-Geigy AG and Sandoz AG, merged into this new entity, creating the Novartis Group. Novartis AG is domiciled in and governed by the laws of Switzerland. Its registered office
is located at Novartis AG, Lichtstrasse 35, CH-4056 Basel, Switzerland, and its telephone number is +41 61&nbsp;324 1111. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis
AG is organized as a holding company which owns, directly or indirectly, 100% of all significant operating companies of the Novartis Group. The Novartis Group is a multinational
group of companies specializing in the research, development, manufacturing and marketing of innovative healthcare products and provides healthcare solutions that address the evolving needs of
patients and societies worldwide with a broad portfolio that includes innovative medicines, preventive vaccines and diagnostic tools, generic pharmaceuticals and consumer health products. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
businesses are divided on a worldwide basis into the following four operating divisions: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Pharmaceuticals (brand-name patented pharmaceuticals)  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vaccines and Diagnostics (human vaccines and molecular diagnostics)  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Sandoz (generic pharmaceuticals) </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Consumer Health (over-the-counter medicines, animal health medicines, and contact lenses and
lens-care products) </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
shares are listed in Switzerland on the SWX Swiss Exchange under the symbol "NOVN" and our American Depositary Shares are listed on the New York Stock Exchange under the symbol
"NVS." We employed approximately 98,200 full-time equivalent associates as of December&nbsp;31, 2007 and have operations in approximately 140 countries around the world. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_novartis_capital_corporation"> </A>
<A NAME="toc_dc12002_4"> </A>
<BR></FONT><FONT SIZE=2><B>  NOVARTIS CAPITAL CORPORATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Capital Corporation is a finance subsidiary indirectly owned 100% by Novartis AG and was incorporated as a corporation under
the laws of Delaware on July&nbsp;23, 2008. It exists for the purpose of issuing debt securities, the proceeds of which will be invested by it in marketable securities or advanced to, or otherwise
invested in, subsidiaries or affiliates of Novartis AG. The principal office of Novartis Capital Corporation is located at 608&nbsp;Fith Avenue, New York, New York 10020, USA, and its telephone
number is +1&nbsp;212&nbsp;307&nbsp;1122. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_novartis_securities_investment_ltd."> </A>
<A NAME="toc_dc12002_5"> </A>
<BR></FONT><FONT SIZE=2><B>  NOVARTIS SECURITIES INVESTMENT&nbsp;LTD.    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Securities Investment&nbsp;Ltd. is a finance subsidiary indirectly owned 100% by Novartis AG and was incorporated as a
limited liability company under the laws of Bermuda on September&nbsp;25, 2001 for an indefinite duration. It exists for the purpose of issuing debt securities, the proceeds of which will be
invested by it in marketable securities or advanced to, or otherwise invested in, subsidiaries or affiliates of Novartis AG. The principal office of Novartis Securities Investment&nbsp;Ltd. is
located at 131&nbsp;Front Street, Hamilton, HM12, Bermuda, and its telephone number is +1&nbsp;441&nbsp;296&nbsp;8025. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc12002_novartis_finance_s.a."> </A>
<A NAME="toc_dc12002_6"> </A>
<BR></FONT><FONT SIZE=2><B>  NOVARTIS FINANCE&nbsp;S.A.    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis Finance&nbsp;S.A. is a finance subsidiary indirectly owned 100% by Novartis AG and was incorporated as a public limited
liability company (</FONT><FONT SIZE=2><I>soci&eacute;t&eacute; anonyme</I></FONT><FONT SIZE=2>) under the laws of Luxembourg on July&nbsp;25, 2008. It exists for the purpose of
issuing debt securities, the proceeds of which will be invested by it in marketable securities or advanced to, or otherwise invested in, subsidiaries or affiliates of Novartis AG. The registered
office of Novartis Finance&nbsp;S.A. is located at 20, rue Eug&egrave;ne Ruppert, L-2453 Luxembourg, Luxembourg, and its telephone number is
+352&nbsp;26&nbsp;29&nbsp;42&nbsp;01. It is registered with the Luxembourg trade and companies register under number B.&nbsp;141.096. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de12002_legal_ownership_of_debt_securities"> </A>
<A NAME="toc_de12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  LEGAL OWNERSHIP OF DEBT SECURITIES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> "Street Name" and Other Indirect Holders  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally will not recognize investors who hold debt securities in accounts at banks or brokers as legal holders of those debt
securities. Holding securities in accounts at banks or brokers is called holding in "street name." If an investor holds debt securities in street name, we recognize only the bank or broker or the
financial institution the bank or broker uses to hold the debt securities. These intermediary banks, brokers and other financial institutions pass along principal, interest and other payments on the
debt securities, either because they agree to do so in their customer agreements or because they are legally required to do so. If you hold debt securities in street name, you should check with your
own institution to find out: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>how it handles payments and notices with respect to securities;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether it imposes fees or charges;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>how it would handle voting if ever required;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>how and when you should notify it to exercise on your behalf any rights or options that may exist under the debt
securities;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether and how you can instruct it to send you securities registered in your own name so you can be a direct holder as
described below; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>how it would pursue rights under the debt securities if there were a default or other event triggering the need for
holders to act to protect their interests. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Registered Holders  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our obligations, as well as the obligations of the trustee and those of any third parties employed by us or the trustee, extend only to
persons who are registered as holders of debt securities. As noted above, we do not have obligations to you if you hold in street name or through other indirect means, either because you choose to
hold debt securities in that manner or because the debt securities are issued in the form of global securities as described below. For example, once we make payment to the registered holder, we have
no further responsibility for the payment even if that holder is legally required to pass the payment along to you as a street name customer but does not do so. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Global Securities  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A global security is a special type of indirectly held security. If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners of the debt securities will be indirect holders. We do this by requiring that the global security be registered in the name of a financial institution we
select and by requiring that the debt securities represented by the global security not be registered in the name of any other holder except in the special situations described below. The financial
institution that acts as the sole registered holder of the global security is called the depositary. Any person wishing to own a debt security may do so indirectly through an account with a broker,
bank or other financial institution that in turn has an account with the depositary. The prospectus supplement will indicate whether your series of debt securities will be issued only as global
securities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers
of debt securities represented by the global security will be made only on the records of the depositary or its nominee by transferring such debt securities from the account of
one broker, bank or financial institution to the account of another broker, bank or financial institution. These transfers are made electronically only and are also known as book-entry
transfers. Securities in global form are sometimes also referred to as being in book-entry form. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
an indirect holder, your rights relating to a global security will be governed by the account rules of your broker, bank or financial institution and of the depositary, as well as
general laws relating to securities transfers. We will not recognize you as a holder of debt securities and instead will deal only with the depositary that holds the global security. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should be aware that if debt securities are issued only in the form of a global security: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>you cannot have debt securities registered in your own name;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>you cannot receive physical certificates for your interest in the debt securities, subject to certain exceptions; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>you will be a street name holder and must look to your own broker, bank or financial institution for payments on the debt
securities and protection of your legal rights relating to the debt securities;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>you may not be able to sell interests in the debt securities to some insurance companies and other institutions that are
required by law to own securities in the form of physical certificates;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the depositary's policies will govern payments, transfers, exchanges and other matters relating to your indirect interest
in the global security. We and the trustee will have no responsibility for any aspect of the depositary's actions or for its records of ownership interests in the global security. We and the trustee
also will not supervise the depositary in any way; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the depositary will require that indirect interests in the global security be purchased or sold within its system using
same-day funds for settlement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Special Situations  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In a few special situations described below, the global security will terminate and the indirect interests in it will be exchanged for
registered debt securities represented by physical certificates. After that exchange, the choice of whether to hold debt securities in registered form or in street name will be up to you. You must
consult your broker, bank or financial institution to find out how to have your interests in debt securities transferred to your name, so that you will be a registered holder. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
we specify otherwise in the prospectus supplement, the special situations for termination of a global security are: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>when the depositary notifies us that it is unwilling or unable to continue as depositary and we do not or cannot appoint a
successor depositary within 90&nbsp;days;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the depositary ceases to be a clearing agency registered under the Exchange Act and we do not appoint a successor
depositary within 90&nbsp;days;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an event of default has occurred and is continuing and beneficial owners representing a majority in principal amount of
the applicable series of debt securities have advised the depositary to cease acting as the depositary; or </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we decide we do not want to have the debt securities of that series represented by a global security. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of debt securities covered by the
prospectus supplement. When a global security terminates, the depositary (and not us or the trustee) is responsible for deciding the names of the institutions that will be the initial registered
holders. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B> The Term "Holder" as Used in this Prospectus and Elsewhere  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the descriptions of the debt securities included in this prospectus and any prospectus supplement, when we refer to the "holder" of
a given debt security as being entitled to certain rights or payments, or being permitted to take certain actions, we are in all cases referring to the registered holder of the debt security. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
you would be the registered holder if you held a certificated security registered in your name, it is likely that the holder will actually be either the broker, bank or other
financial institution where you have your street name account, or, in the case of a global security, the depositary. If you are an indirect holder, you will need to coordinate with the institution
through which you hold your interest in a debt security in order to determine how the provisions involving holders described in this prospectus and any prospectus supplement will actually apply to
you. For example, if the debt security in which you hold a beneficial interest in street name can be repaid at the option of the holder, you cannot exercise the option yourself by following the
procedures described in the prospectus supplement. Instead, you would need to cause the institution through which you hold your interest to take those actions on your behalf. Your institution may have
procedures and deadlines different from or additional to those described in the prospectus supplement relating to the debt security. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg12002_description_of_debt_securities"> </A>
<A NAME="toc_dg12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  DESCRIPTION OF DEBT SECURITIES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This section describes the general terms that will apply to any debt securities that we may offer pursuant to this prospectus. The
specific terms of any offered debt securities, and the extent to which the general terms described in this section apply to those debt securities, will be described in the related prospectus
supplement at the time of the offer. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> General  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this prospectus, "debt securities" means the debentures, notes, bonds, guarantees and other evidences of indebtedness that
one of our finance subsidiaries issues, Novartis AG fully and unconditionally guarantees and the trustee authenticates and delivers under the indenture. The debt securities will be direct unsecured
obligations of the relevant finance subsidiary and will rank equally and ratably without preference among themselves and at least equally with all of the other unsecured and unsubordinated
indebtedness of the relevant finance subsidiary. The guarantees will be direct unsecured obligations of Novartis AG and will rank equally and ratably
without preference among Novartis AG and at least equally with all other unsecured and unsubordinated guarantees and indebtedness of Novartis AG. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
debt securities will be issued in one or more series under an indenture to be entered into among the Novartis finance subsidiaries, HSBC Bank USA, National Association, as trustee,
and Novartis AG, as guarantor. The indenture will be qualified under the Trust Indenture Act of 1939, as amended. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus briefly outlines the provisions of the indenture. The terms of the indenture will include both those stated in the indenture and those made part of the indenture by the
Trust Indenture Act. The indenture has been filed as an exhibit to the registration statement of which this prospectus forms&nbsp;a part, and you should read the indenture for provisions that may be
important to you. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indenture does not contain any covenants or other provisions designed to protect holders of the debt securities against a reduction in the creditworthiness of Novartis AG or the
finance subsidiaries in the event of a highly leveraged transaction or that would prohibit other transactions that might adversely affect holders of the debt securities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Issuances in Series  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indenture does not limit the amount of debt securities that may be issued. The debt securities may be issued in one or more series
with the same or various maturities, at a price of 100% of their principal amount or at a premium or a discount. Not all debt securities of any one series need be issued at the same time, and, unless
otherwise provided, any series may be reopened, without the consents of the holders of debt securities of that series, for issuances of additional debt securities of that series. Except in the limited
circumstances described below under "&#151; Covenants &#151; Limitation on Liens," the debt securities will not be secured by any property or assets of Novartis AG or the finance
subsidiaries. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
terms of any authorized series of debt securities will be described in a prospectus supplement. These terms will include some or all of the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the title, aggregate principal amount and denominations of the debt securities;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the date or dates on which principal will be payable;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the percentage of the principal amount at which the debt securities will be issued and whether the debt securities will be
"original issue discount" securities for U.S. federal income tax purposes. If original issue discount debt securities are issued (generally, securities that are issued </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>at
a substantial discount below their principal amount), the special U.S. federal income tax and other considerations of a purchase of original issue discount debt securities will be described; </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the rate or rates, which may be fixed or variable, at which the debt securities will bear interest; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the interest payment dates;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any optional or mandatory redemption terms;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether any sinking fund is required;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the currency in which the debt securities will be denominated or principal, premium or interest will be payable, if other
than U.S. dollars;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>whether the debt securities are to be issued as individual certificates to each holder or in the form of global
certificates held by a depositary on behalf of beneficial owners;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>information describing any book-entry features;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents
or registrars for any series;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the applicability of the defeasance and covenant defeasance provisions described in this prospectus, or any modifications
of those provisions;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any deletions from, modifications of or additions to the events of default or covenants with respect to the debt
securities; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any other terms, conditions, rights or preferences of the debt securities. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
prospectus supplement relating to any series of debt securities may add to or change statements contained in this prospectus. The prospectus supplement may also include, if
applicable, a discussion of certain U.S. federal income tax, Swiss income tax, Bermuda tax and Luxembourg withholding tax considerations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Novartis Guarantees  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt securities issued by the finance subsidiaries will be fully and unconditionally guaranteed by Novartis AG. If for any reason the
applicable finance subsidiary does not
make any required payment in respect of its debt securities when due, whether on the normal due date, on acceleration, redemption or otherwise, Novartis AG will cause the payment to be made to or to
the order of the trustee. The holder of a guaranteed debt security will be entitled to payment under the applicable guarantee of Novartis AG without taking any action whatsoever against the relevant
finance subsidiary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Payment and Transfer  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The debt securities will be issued only as registered securities, which means that the name of the holder will be entered in a register
that will be kept by the trustee or another agent appointed by us. Unless stated otherwise in a prospectus supplement, and except as described under "&#151; Book-Entry System"
below, payments of principal, interest and additional amounts, if any, will be made at the office of the paying agent or agents named in the prospectus supplement or by check mailed to registered
holders at the address appearing in the register. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
other procedures are described in a prospectus supplement and except as described under "&#151; Book-Entry System" below, you will be able to transfer
registered debt securities at the office of the transfer agent or agents named in the prospectus supplement. You may also exchange registered debt securities at the office of the transfer agent for an
equal aggregate principal amount of registered </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
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<BR>

<P style="font-family:times;"><FONT SIZE=2>debt
securities of the same series having the same maturity date, interest rate and other terms as long as the debt securities are issued in authorized denominations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
we nor the trustee will impose any service charge for any transfer or exchange of a debt security; however, we may ask you to pay any taxes or other governmental charges in
connection with a transfer or exchange of debt securities. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Consolidation, Merger or Sale  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis AG and the finance subsidiaries have agreed in the indenture not to consolidate with or merge with or into any other person or
convey or transfer all or substantially all of their respective properties and assets to any person (except that the finance subsidiaries may
merge with or into Novartis AG and Novartis AG may merge with or into the finance subsidiaries), unless: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Novartis AG or the applicable finance subsidiary, as the case may be, is the continuing person, or the successor expressly
assumes by supplemental indenture their respective obligations under the indenture;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the continuing person is organized and validly existing under the laws of (i)&nbsp;if the continuing person is a
successor to the relevant finance subsidiary, the jurisdiction of organization of such finance subsidiary or Switzerland, (ii)&nbsp;if the continuing person is a successor to Novartis AG, the United
States or Switzerland or (iii)&nbsp;in any case, a jurisdiction that is a member country of the Organization for Economic Cooperation and Development (or any successor) and, if it is not organized
and validly existing under the laws of (x)&nbsp;in the case of the applicable finance subsidiary, the jurisdiction of organization of such finance subsidiary, (y)&nbsp;in the case of Novartis AG,
the United States or (z)&nbsp;in any case, Switzerland, the continuing person agrees by supplemental indenture to be bound by a covenant comparable to that described below under "&#151;
Covenants &#151; Payment of Additional Amounts" with respect to taxes imposed in the continuing person's jurisdiction of organization (in which case the continuing person will benefit from a
redemption option comparable to that described below under "&#151; Optional Redemption for Tax Reasons" in the event of changes in taxes in that jurisdiction after the date of the
consolidation, merger or sale);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>immediately after the transaction, no default under the debt securities has occurred and is continuing; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Novartis AG or the relevant finance subsidiary, as applicable, delivers to the trustee an officer's certificate and, if
neither Novartis AG nor the relevant finance subsidiary, as applicable, is the continuing person, an opinion of counsel, in each case stating, among other things, that the transaction and the
supplemental indenture, if required, comply with these provisions and the indenture. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B> Covenants  </B></FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Payment of Additional Amounts  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made by us under or with respect to the debt securities will be free and clear of and without withholding or deduction for or
on account of any and all present or future taxes, duties, assessments or governmental charges of any nature imposed, levied, collected, withheld or assessed by or on behalf of (i)&nbsp;the
government of Switzerland or of any political subdivision of Switzerland or by any authority or agency therein or thereof having the power to tax, (ii)&nbsp;the government of the jurisdiction of
organization of the applicable finance subsidiary or any political subdivision or territory or possession of such jurisdiction or by any authority or agency therein or thereof having the power to tax
or (iii)&nbsp;the government of any jurisdiction from or through which a payment on the debt securities or the guarantee is made or any political subdivision or territory or possession of such
jurisdiction or by </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>any
authority or agency therein or thereof having power to tax (each of clauses&nbsp;(i), (ii)&nbsp;and (iii), a "Relevant Taxing Jurisdiction"), which we refer to collectively as "Taxes," unless
we are required to withhold or deduct Taxes by law. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we are required to withhold or deduct any amount for or on account of Taxes from any payment made with respect to the debt securities, we will pay such additional amounts as may be
necessary so that the net amount received by each holder (including additional amounts) after such withholding or deduction will not be less than the amount the holder would have received if the Taxes
had not been withheld or deducted; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that no additional amounts will be payable with respect to Taxes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that would not have been imposed but for the existence of any present or former connection between such holder or
beneficial owner of the debt securities (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such holder or beneficial owner, if such holder or
beneficial owner is an estate, trust, partnership or corporation) and a Relevant Taxing Jurisdiction, including, without limitation, such holder or beneficial owner (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or treated as a resident thereof or domiciled thereof or a national thereof or being or having been
present or engaged in trade or business therein or having or having had a permanent establishment therein;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that are estate, inheritance, gift, sales, transfer, personal property, wealth or similar taxes, duties, assessments or
other governmental charges;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>payable other than by withholding from payments of principal of or interest on the debt securities; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that would not have been imposed but for the failure of the applicable recipient of such payment to make a declaration of
non-residence or other similar claim for exemption to the relevant tax authority or comply with any certification, identification, information, documentation or other reporting requirement
to the extent such compliance is required by applicable law or administrative practice or an applicable treaty as a precondition to exemption from, or reduction in, the rate of deduction or
withholding of such Taxes;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that are imposed on a payment to an individual on a residual entity and are required to be made pursuant to European
Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November&nbsp;26-27, 2000 on the taxation of savings income, or any law
implementing or complying with, or introduced in order to conform to, such Directive;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>that would not have been imposed but for the presentation of a debt security (where presentation is required) for payment
on a date more than 30&nbsp;days after the date on which such payment first became due and payable or the date on which payment thereof was duly provided for, whichever occurred later; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to the extent the amount of Tax could have be reduced by presentation for payment of the relevant debt securities to a
paying agent other than the paying agent to which the presentation was made; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any combination of the foregoing items; </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>nor
shall additional amounts be paid with respect to any payment of the principal of or interest on any debt security to any such holder who is a fiduciary or a partnership or a beneficial owner who
is other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been
entitled to such additional amounts had it been the holder of the debt security. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Limitation on Liens  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the indenture we have agreed, for so long as any debt securities are outstanding, that neither the relevant finance subsidiary nor
Novartis AG will create or have outstanding any lien upon the whole or any part of its assets, present or future (including any uncalled capital), in order to secure any existing or future relevant
indebtedness (as this term is defined below) or to secure any guarantee or indemnity in respect thereof without in any such case at the same time securing the debt securities equally and ratably with
such relevant indebtedness (or any guarantee or indemnity in respect thereof) or creating such other security approved by the relevant finance subsidiary and/or Novartis AG (as the case may be) and
the holders of a majority in principal amount of all affected series of debt securities, voting as one class. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
restrictions on liens will not apply to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>liens arising by operation of law; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>liens on the assets of any person existing at the time such person is merged with or into or consolidated with Novartis
AG. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the limitation on liens covenant, the term "relevant indebtedness" means any loan or other indebtedness in the form of, or represented or evidenced by, bonds, debentures,
notes or other securities that are or are capable of being quoted, listed or traded on any stock exchange or in any securities market or over-the-counter market. For purposes
of the limitation on liens covenant, "assets" refers to assets of the relevant finance subsidiary and Novartis AG, respectively, and does not include the assets of their respective subsidiaries. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Additional Covenants  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may be subject to additional covenants, including restrictive covenants in respect of a particular series of debt securities. Such
additional covenants will be set forth in the applicable prospectus supplement and, to the extent necessary, in the supplemental indenture or board resolution relating to that series of debt
securities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Optional Redemption for Tax Reasons  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The relevant finance subsidiary may redeem any series of debt securities in whole but not in part at any time, on giving not less than
30 nor more than 60&nbsp;days' notice of such redemption, at a redemption price equal to the principal amount plus accrued interest, if any, to the date fixed for redemption (except in the case of
discounted debt securities, which may be redeemed at the redemption price specified by the terms of each series of such debt securities), if: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relevant finance subsidiary determines that, as a result of any change in or amendment to the laws or any regulations
or rulings promulgated thereunder of a Relevant Taxing Jurisdiction, or any change in the application or official interpretation of such laws, regulations or rulings, or any change in the application
or official interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which any such jurisdiction is a party, which change, execution or amendment becomes
effective on or after the issue date or such other date specified in the debt securities of that series: </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relevant finance subsidiary would be required to pay additional amounts (as described under " &#151; Covenants
&#151; Payment of Additional Amounts" above) with respect to that series of debt securities on the next succeeding interest payment date and the payment of such additional amounts cannot be
avoided by the use of reasonable measures available to us; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>withholding tax has been or would be required to be withheld with respect to interest income received or receivable by the
applicable finance subsidiary directly from the guarantor (or any </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>affiliate)
and such withholding tax obligation cannot be avoided by the use of reasonable measures available to the applicable finance subsidiary or the guarantor (or any affiliate); or </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relevant finance subsidiary determines, based upon an opinion of independent counsel selected by the relevant finance
subsidiary that, as a result of any action taken by any legislative body of, taxing authority of, or any action brought in a court of competent jurisdiction in, a Relevant Taxing Jurisdiction (whether
or not such action was taken or brought with respect to Novartis AG or the applicable finance subsidiary, as the case may be), which action is taken or brought on or after the issue date or such other
date specified in the debt securities of that series, there is a substantial probability that the circumstances described above would exist; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that no such notice of redemption may be given earlier than 90&nbsp;days prior to the earliest date on which the relevant finance subsidiary
would be obligated to pay such additional amounts. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will also pay to each holder, or make available for payment to each such holder, on the redemption date any additional amounts resulting from the payment of such redemption price.
Prior to the publication of any notice of redemption, we will deliver to the trustee: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an officer's certificate stating that the relevant finance subsidiary is entitled to effect a redemption and setting forth
a statement of facts showing that the conditions precedent of the right so to redeem have occurred; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an opinion of counsel to the effect that the conditions specified above have been satisfied. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
notice of redemption will be irrevocable once the relevant finance subsidiary delivers the officer's certificate to the trustee. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Events of Default  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise specified in a prospectus supplement, an event of default with respect to a series of debt securities means any one of
the following events: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>default in payment of the principal (or premium, if any) of any debt security of that series when due (including as a
sinking fund installment), and the continuance of that default for more than two business days;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>default in payment of interest on, or any additional amounts payable in respect of, any debt security of that series when
due and payable, and the continuance of that default for 30&nbsp;days;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>default in performing any other covenant in the indenture with regard to that series for 90&nbsp;days after the receipt
of written notice from the trustee or from the holders of 25% in principal amount of the debt securities of that series;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>(i) any indebtedness of, or guaranteed by, the relevant finance subsidiary or Novartis AG is not paid at its stated
maturity or (as the case may be) within any originally applicable grace period; or (ii)&nbsp;any such indebtedness, or guarantee, of the relevant finance subsidiary or Novartis AG (as the case may
be) becomes due and payable prior to its stated maturity by reason of an event of default; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that (x)&nbsp;the amount of indebtedness referred
to in clauses&nbsp;(i) and/or (ii)&nbsp;above individually or in the aggregate exceeds $150,000,000 (or its equivalent in any other currency or currencies); and (y)&nbsp;there shall not be
deemed to be a default (i)&nbsp;where the relevant finance subsidiary or Novartis AG in good faith claims a right of set-off or otherwise contests its obligations to pay or
(ii)&nbsp;if such acceleration is annulled or such payment or repayment is made within 10&nbsp;days after the receipt of written notice from the trustee or from the holders of 25% in principal
amount of the debt securities of that series; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an encumbrancer or a receiver or a person with similar functions appointed for execution (in Switzerland a </FONT> <FONT SIZE=2><I>Sachwalter</I></FONT><FONT SIZE=2> or </FONT><FONT
SIZE=2><I>Konkursverwalter</I></FONT><FONT SIZE=2> and in Luxembourg, a </FONT> <FONT SIZE=2><I>commissaire</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>juge-commissaire</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>liquidateur</I></FONT><FONT
SIZE=2> or </FONT> <FONT SIZE=2><I>curateur</I></FONT><FONT SIZE=2>) taking possession of the whole or any substantial part of the assets or undertaking of the relevant finance subsidiary or Novartis AG or a
distress, execution or other process being levied or enforced upon or sued out against a substantial part of the property or assets of the relevant finance subsidiary or Novartis AG and not being
paid, discharged, removed or stayed within 30 days;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relevant finance subsidiary or Novartis AG stopping payment or ceasing business (except in each case in circumstances
previously approved by the holders of a majority in principal (or, if any debt securities are original issue discount securities, such portion of the principal of such debt securities of such series
as may then be accelerated pursuant to the terms of such debt securities) of the outstanding debt securities of all series affected (all such series voting as one class));  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the relevant finance subsidiary becoming bankrupt or insolvent or entering into a moratorium or making a general
assignment for the benefit of its creditors including, in relation to Novartis Finance S.A., bankruptcy (</FONT><FONT SIZE=2><I>faillite</I></FONT><FONT SIZE=2>), insolvency, its voluntary or
judicial liquidation (</FONT><FONT SIZE=2><I>liquidation volontaire ou judiciaire</I></FONT><FONT SIZE=2>), reprieve from payment (</FONT><FONT SIZE=2><I>sursis de paiement</I></FONT><FONT SIZE=2>),
controlled management (</FONT><FONT SIZE=2><I>gestion contr&ocirc;l&eacute;e</I></FONT><FONT SIZE=2>), and composition with creditors (</FONT><FONT SIZE=2><I>concordat
pr&eacute;ventif de faillite</I></FONT><FONT SIZE=2>);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Novartis AG becoming bankrupt or insolvent (or is obliged to notify the court of its financial situation in accordance
with Article 725 (2) of the Swiss Code of Obligations) or entering into a moratorium (</FONT><FONT SIZE=2><I>Stundung</I></FONT><FONT SIZE=2>) or making arrangements with its creditors
(</FONT><FONT SIZE=2><I>Nachlassvertrag</I></FONT><FONT SIZE=2>);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an order being made or a resolution passed for the winding-up or dissolution of the relevant finance subsidiary or
Novartis AG except a winding-up or dissolution, the terms of such winding-up or dissolution having previously been approved by the holders of a majority in principal (or, if any debt securities are
original issue discount securities, such portion of the principal of such debt securities of such series as may then be accelerated pursuant to the terms of such debt securities) of the outstanding
debt securities of all series affected (all such series voting as one class);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if the guarantee with respect to the relevant series of debt securities ceases to be, or is claimed by Novartis AG not to
be, in full force and effect; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any other event of default provided with respect to that particular series of debt securities. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the definition of "event of default," the term "indebtedness" means any indebtedness for monies borrowed or raised including, without limitation, any debenture, note,
bond or like security. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
additional or different events of default applicable to a particular series of debt securities will be described in the prospectus supplement relating to such series. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
event of default with respect to a particular series of debt securities will not necessarily constitute an event of default with respect to any other series of debt securities. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
trustee may withhold notice to the holders of debt securities of any default (except in the payment of principal, premium or interest) if it, in good faith, considers such
withholding of notice to be in the best interests of the holders. A default is any event which is an event of default described above or would be an event of default but for the giving of notice or
the passage of time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an event of default occurs and continues, the trustee or the holders of the aggregate principal amount of the debt securities specified below may require us to repay immediately, or
accelerate: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>the entire principal of the debt securities of such series; or </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17</FONT></P>

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<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>if the debt securities are original issue discount securities, such portion of the principal as may be described in the
applicable prospectus supplement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the event of default occurs because of a default in a payment of principal or interest on the debt securities of any series, then the trustee or the holders of at least 25% of the
aggregate principal amount of debt securities of that series can accelerate that series of debt securities. If the event of default occurs because of a failure to perform any other covenant in the
indenture or any covenant for the benefit of one or more, but not all, of the series of debt securities, then the trustee or the holders of at least 25% of the aggregate principal amount of debt
securities of all series affected, voting as one class, can accelerate all of the affected series of debt securities. If the event of default occurs because of bankruptcy proceedings, then all of the
debt securities under the indenture will be accelerated automatically. Therefore, except in the case of a default on a payment of principal or interest on the debt securities of your series or a
default due to our bankruptcy or insolvency, it is possible that you may not be able to accelerate the debt securities of your series because of the failure of holders of other series to take action. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
holders of a majority of the aggregate principal amount of the debt securities of all affected series, voting as one class, can rescind this accelerated payment requirement or waive
any past default or event of default or allow noncompliance with any provision of the indenture. However, they cannot waive a default in payment of principal of, premium, if any, or interest on any of
the debt securities when due otherwise than as a result of acceleration. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
an event of default, the trustee must exercise the same degree of care a prudent person would exercise under the circumstances in the conduct of her or his own affairs. Subject to
these requirements, the trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders, unless the holders offer the trustee
reasonable indemnity. If they provide this reasonable indemnity, the holders of a majority in principal amount of
all affected series of debt securities, voting as one class, may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any power
conferred upon the trustee, for any series of debt securities. However, the trustee may refuse to follow any direction that conflicts with law or the indenture or is unduly prejudicial to the rights
of other holders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
holder will be entitled to pursue any remedy with respect to the indenture unless the trustee fails to act for 60&nbsp;days after it is given: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>notice of default by that holder;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a written request to enforce the indenture by the holders of not less than 25% in principal amount of all outstanding debt
securities of any affected series; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an indemnity to the trustee, satisfactory to the trustee; </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>and
during this 60-day period the holders of a majority in principal amount of all outstanding debt securities of such affected series do not give a direction to the trustee that is
inconsistent with the enforcement request. These provisions will not prevent any holder of debt securities from enforcing payment of the principal of (and premium, if any) and interest on the debt
securities at the relevant due dates. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an event of default with respect to a series of debt securities occurs and is continuing, the trustee will mail to the holders of those debt securities a notice of the event of
default within 90&nbsp;days after it occurs. However, except in the case of a default in any payment in respect of a series of debt securities, the trustee shall be protected in withholding notice
of an event of default if it determines in good faith that this is in the interests of the holders of the relevant debt securities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

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<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Modification of the Indenture  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, our rights and obligations and those of the holders under the indenture may be modified if the holders of a majority in
aggregate principal amount of the outstanding debt securities of each series affected by the modification consent to such modification. However, the indenture provides that, unless each affected
holder agrees, an amendment cannot: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>make any adverse change to any payment term of a debt security such as extending the maturity date, extending the date on
which we have to pay interest or make a sinking fund payment, reducing the interest rate, reducing the amount of principal or additional amounts payable, changing the currency in which we have to make
any payment of principal, premium or interest, modifying any redemption or repurchase right, or right to convert or exchange any debt security, to the detriment of the holder and impairing any right
of a holder to bring suit for payment;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>waive any payment default;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reduce the percentage of the aggregate principal amount of debt securities needed to make any amendment to the indenture
or to waive any covenant or default; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>make any other change to the amendment provisions of the indenture. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,
if we and the trustee agree, the indenture may be amended without notifying any holders or seeking their consent if the amendment does not materially and adversely affect any
holder. We and the trustee are permitted to make modifications and amendments to the indenture without the consent of any holder of debt securities for any of the following
purposes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to cure any ambiguity, defect or inconsistency in the indenture;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to comply with sections of the indenture governing when Novartis AG or the relevant finance subsidiary may merge; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to comply with any requirements of the SEC in connection with the qualification of the indenture under the Trust Indenture
Act;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to evidence and provide for the acceptance by a successor trustee of appointment under the indenture with respect to the
debt securities of any or all series;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to establish the form or forms or terms of the debt securities of any series or of the coupons appertaining to such debt
securities as permitted under the indenture;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to provide for uncertificated debt securities and to make all appropriate changes for such purpose; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to provide for a further guarantee from a third party on outstanding debt securities of any series and the debt securities
of any series that may be issued under the indenture;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to change or eliminate any provision of the indenture; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that any
such change or elimination will become effective only when there are no outstanding debt securities of any series created prior to the execution of such supplemental indenture that is entitled to the
benefit of such provision;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to supplement any of the provisions of the indenture to such extent as will be necessary to permit or facilitate the
defeasance and discharge of any series of debt securities pursuant to the indenture; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that any such action will not adversely affect the
interests of the holders of such or any other series of debt securities in any material respect; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>to make any change that does not materially and adversely affect the rights of any holder of the debt securities. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>19</FONT></P>

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<UL>
<UL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of articles&nbsp;86 to 94-8 of the Luxembourg act dated August&nbsp;10, 1915 on commercial companies, as amended, will not apply to any debt securities
issued by Novartis Finance&nbsp;S.A. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Defeasance  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term defeasance means discharge from some or all of the obligations under the indenture. If we deposit with the trustee sufficient
cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the debt securities of a particular series, then at
our option: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we will be discharged from our respective obligations with respect to the debt Securities of such series; or </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>we will no longer be under any obligation to comply with the restrictive covenants, if any, contained in the indenture and
any supplemental indenture or board resolution with respect to the debt securities of such series, and the events of default relating to failures to comply with covenants will no longer apply to us. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this happens, the holders of the debt securities of the affected series will not be entitled to the benefits of the indenture except for registration of transfer and exchange of debt
securities and replacement of lost, stolen or mutilated debt securities. Instead, the holders will only be able to rely on the deposited funds or obligations for payment. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
relevant finance subsidiary must deliver to the trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause the holders of the debt securities
to recognize income, gain or loss for U.S. federal income tax purposes. The relevant finance subsidiary may, in lieu of an opinion of counsel, deliver a ruling to such effect received from or
published by the U.S. Internal Revenue Service. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Book-Entry System  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt securities may be issued under a book-entry system in the form of one or more global securities. The global securities
will be registered in the name of a depositary or its nominee and deposited with that depositary or its custodian. Unless stated otherwise
in the prospectus supplement, The Depository Trust Company, New York, New York, or DTC, will be the depositary if a depositary is used. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC
has advised us as follows: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section&nbsp;17A of the Exchange Act;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>DTC was created to hold securities of its participants and to facilitate the clearance and settlement of securities
transactions, such as through transfers and pledges, among its participants in such securities through electronic book-entry changes to accounts of its participants, thereby eliminating
the need for physical movement of securities certificates;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>DTC's participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC; and </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>20</FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According
to DTC, the foregoing information with respect to DTC has been provided to the financial community for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the issuance of a global security in registered form, the depositary will credit the accounts of its participants with the debt securities upon our instructions. Only persons
who hold directly or indirectly through financial institutions that are participants in the depositary can hold beneficial interests in the global securities. Since the laws of some jurisdictions
require certain types of purchasers to take physical delivery of such securities in definitive form, you may encounter difficulties in your ability to own, transfer or pledge beneficial interests in a
global security. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So
long as the depositary or its nominee is the registered owner of a global security, we and the trustee will treat the depositary as the sole owner or holder of the debt securities for
purposes of the indenture. Therefore, except as set forth below, you will not be entitled to have debt securities registered in your name or to receive physical delivery of certificates representing
the debt securities. Accordingly, you will have to rely on the procedures of the depositary and the participant in the depositary through whom you hold your beneficial interest in order to exercise
any rights of a holder under the indenture. We understand that under existing practices, the depositary would act upon the instructions of a participant or authorize that participant to take any
action that a holder is entitled to take. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will make all payments of principal, interest and additional amounts, if any, on the debt securities to the depositary. It is expected that the depositary will then credit
participants' accounts proportionately with these payments on the payment date and that the participants will in turn credit their customers' accounts in accordance with their customary practices.
Neither we nor the trustee will be responsible for making any payments to participants or customers of participants or for maintaining any records relating to the holdings of participants and their
customers, and you will have to rely on the procedures of the depositary and its participants. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Global
securities are generally not transferable. Physical certificates will be issued to beneficial owners in lieu of a global security only in the special situations described under
the heading "Legal Ownership of Debt Securities&nbsp;&#151;&nbsp;Global Securities&nbsp;&#151;&nbsp;Special Situations." </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B> Information Concerning the Trustee  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HSBC Bank USA, National Association will be the trustee. The trustee will be required to perform only those duties that are
specifically set forth in the indenture, except when a default has occurred and is continuing with respect to the debt securities. After a default, the trustee must exercise the same degree of care
that a prudent person would exercise under the circumstances in the conduct of her or his own affairs. Subject to these requirements, the trustee will be under no obligation to exercise any of the
powers vested in it by the indenture at the request of any holder of debt securities unless the holder offers the trustee reasonable indemnity against the costs, expenses and liabilities that might be
incurred by exercising those powers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B> Governing Law  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The debt securities, the related guarantees and the indenture will be governed by and construed in accordance with the laws of the
State of New York. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dk12002_tax_considerations"> </A>
<A NAME="toc_dk12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  TAX CONSIDERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The applicable prospectus supplement will describe certain tax considerations in connection with the acquisition, ownership and
disposal of debt securities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>22</FONT></P>

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 </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>
<A HREF="#bg12001a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm12002_plan_of_distribution"> </A>
<A NAME="toc_dm12002_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PLAN OF DISTRIBUTION    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may sell our securities through agents, underwriters, dealers or directly to purchasers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
agents may solicit offers to purchase our securities.  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We will name any agent involved in offering or selling our securities, and any commissions that we will pay to the agent,
in our prospectus supplement.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Unless we indicate otherwise in our prospectus supplement, our agents will act on a best efforts basis for the period of
their appointment.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our agents may be deemed to be underwriters under the Securities Act of any of our securities that they offer or sell. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may use an underwriter or underwriters in the offer or sale of our securities.  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If we use an underwriter or underwriters, we will execute an underwriting agreement with the underwriter or underwriters
at the time that we reach an agreement for the sale of our securities.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the
terms of the transactions, including the compensation the underwriters and dealers will receive, in our prospectus supplement.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The underwriters will use our prospectus supplement to sell our securities.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If we use an underwriter or underwriters, the underwriter or underwriters will acquire our securities for their own
account and may resell our securities in one or more transactions, including negotiated transactions. These sales will be made at a fixed price or at varying prices determined at the time of the sale. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may use one or more dealers to sell our securities.  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If we use a dealer, we, as principal, will sell our securities to the dealer.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The dealer will then sell our securities to the public at varying prices that the dealer will determine at the time it
sells our securities.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We will include the name of the dealer and the terms of our transactions with the dealer in our prospectus supplement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may solicit directly offers to purchase our securities, and we may directly sell our securities to institutional or other investors. We will describe the terms of our direct sales in
our prospectus supplement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may indemnify agents, underwriters and dealers against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters and dealers, or their affiliates,
may be customers of, engage in transactions with or perform services for, us or our subsidiaries and affiliates in the ordinary course of business. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may authorize our agents and underwriters to solicit offers by certain institutions to purchase our securities at the public offering price under delayed delivery contracts. </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell
you when we will demand payment and delivery of the securities under the delayed delivery contracts.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>These delayed delivery contracts will be subject only to the conditions that we set forth in the prospectus supplement. </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We will indicate in our prospectus supplements the commission that underwriters and agents soliciting purchases of our
securities under delayed delivery contracts will be entitled to receive. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>23</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

<UL>
<UL>
</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm12002_legal_matters"> </A>
<A NAME="toc_dm12002_2"> </A>
<BR></FONT><FONT SIZE=2><B>  LEGAL MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain matters of U.S. law will be passed upon for us by Allen&nbsp;&amp; Overy&nbsp;LLP and for the underwriters by Shearman&nbsp;&amp;
Sterling&nbsp;LLP. Shearman&nbsp;&amp; Sterling&nbsp;LLP has performed legal services for us and our subsidiaries and affiliates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm12002_experts"> </A>
<A NAME="toc_dm12002_3"> </A>
<BR></FONT><FONT SIZE=2><B>  EXPERTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting
(which is included in management's report on internal control over financial reporting) incorporated in this prospectus by reference to the Annual Report on Form&nbsp;20-F for the year
ended December&nbsp;31, 2007 have been so incorporated in reliance on the report of PricewaterhouseCoopers AG, Switzerland, an independent registered public accounting firm, given on the authority
of said firm as experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>24</FONT></P>

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<A NAME="page_dm12002_1_25"> </A>

<P style="font-family:times;"><FONT SIZE=2><A
HREF="#bg12001a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm12002_limitations_on_enforcement_of_u.s._laws"> </A>
<A NAME="toc_dm12002_4"> </A>
<BR></FONT><FONT SIZE=2><B>  LIMITATIONS ON ENFORCEMENT OF U.S. LAWS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because Novartis AG is a Swiss company headquartered in Switzerland, many of our directors and executive officers (as well as certain
directors, managers and executive officers of the finance subsidiaries), and certain experts named in this prospectus, reside outside the United States. As a result, it may be difficult for you to
serve legal process on us or our directors and
executive officers (as well as certain directors, managers and executive officers of the finance subsidiaries) or have any of them appear in a U.S. court. In addition, U.S. investors may find it
difficult in a lawsuit based on the civil liability provisions of the U.S. federal securities laws to enforce in U.S. courts or outside the U.S. judgments obtained against those persons in U.S.
courts, to enforce in U.S. courts judgments obtained against those persons in courts in jurisdictions outside the U.S., or to enforce against those persons in Switzerland, whether in original actions
or in actions for the enforcement of judgments of U.S. courts, civil liabilities based solely upon the U.S. federal securities laws. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>25</FONT></P>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
