<SEC-DOCUMENT>0001047469-17-000659.txt : 20170214
<SEC-HEADER>0001047469-17-000659.hdr.sgml : 20170214
<ACCEPTANCE-DATETIME>20170214080207
ACCESSION NUMBER:		0001047469-17-000659
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20170214
DATE AS OF CHANGE:		20170214

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NOVARTIS AG
		CENTRAL INDEX KEY:			0001114448
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			V8
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-207004
		FILM NUMBER:		17602520

	BUSINESS ADDRESS:	
		STREET 1:		LICHTSTRASSE 35
		CITY:			BASEL
		STATE:			V8
		ZIP:			CH 4056
		BUSINESS PHONE:		01141613241111

	MAIL ADDRESS:	
		STREET 1:		LICHTSTRASSE 35
		CITY:			BASEL
		STATE:			V8
		ZIP:			CH 4056

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Novartis Capital CORP
		CENTRAL INDEX KEY:			0001443411
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				263086456
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-207004-02
		FILM NUMBER:		17602521

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>a2230897z424b5.htm
<DESCRIPTION>PRELIMINARY PROSPECTUS SUPPLEMENT
<TEXT>
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<BR>
<P><FONT SIZE=3 >
Use these links to rapidly review the document<BR>
<A HREF="#bg16601_table_of_contents_prospectus_supplement">  Table of Contents Prospectus Supplement</A> <BR>
<A HREF="#bg16602_table_of_contents">  TABLE OF CONTENTS</A><BR></font>
</P>

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

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</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><B> <A NAME="bc16601_filed_pursuant_to_rule__bc101412"> </A>
<A NAME="toc_bc16601_1"> </A>
<BR>    </B></FONT><FONT SIZE=2><B>  Filed Pursuant to Rule&nbsp;424(b)(5)<BR>  Registration&nbsp;No.&nbsp;333-207004    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#FF4040" SIZE=2><B>The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement together with the
accompanying prospectus are not an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#FF4040" SIZE=2><B>Subject to Completion</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#FF4040" SIZE=2><B>Preliminary Prospectus Supplement dated February&nbsp;14,
2017</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;18, 2015) </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>
<IMG SRC="g184809.jpg" ALT="LOGO" WIDTH="196" HEIGHT="33">
  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=4><B>Novartis Capital Corporation<BR>  </B></FONT><FONT SIZE=3><B><I>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes
due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020<BR>
</I></B></FONT><FONT SIZE=3>Issue price:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%<BR></FONT> <FONT
SIZE=3><B><I>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes
due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022<BR>  </I></B></FONT><FONT SIZE=3>Issue
price:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%<BR></FONT> <FONT SIZE=3><B><I>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes
due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027<BR>  </I></B></FONT><FONT SIZE=3>Issue
price:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%<BR>
</FONT><FONT SIZE=2><B>fully and unconditionally guaranteed by<BR>  </B></FONT><FONT SIZE=4><B>Novartis AG<BR>  </B></FONT><FONT SIZE=2><I>Interest
payable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020, which we refer to as the
"2020 notes," will bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per year. The
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022, which we refer to as the "2022 notes," will
bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per year. The&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% Notes
due&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027,
which we refer to as the "2027 notes," will bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% per year. We will pay interest on each of the 2020 notes, the 2022 notes and the 2027 notes
each&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, commencing
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>We
refer to the 2020 notes, the 2022 notes and the 2027 notes collectively as the "notes." Unless we redeem the notes earlier, the 2020 notes will mature
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020, the 2022 notes will
mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022 and the 2027 notes will mature
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027. There is no sinking fund for the notes. The notes will rank equally in right of payment with all other senior,
unsecured debt obligations of Novartis Capital Corporation. The guarantees of the notes by Novartis AG will rank equally in right of payment with all other senior, unsecured debt obligations of
Novartis AG. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>We
may redeem some or all of the notes of each series at any time and from time to time prior to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020 in the case of the
2020 notes,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022 in the case of the 2022
notes and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027 in the case of the 2027 notes at the applicable make-whole prices determined in the manner described
in this prospectus supplement. We may also redeem some or all of
the 2022 notes or the 2027 notes at any time and from time to time on or after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022 in the case of the 2022 notes
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027 in the case of the 2027 notes at a price
equal to 100% of their principal amount plus accrued interest to the redemption date. See "Description of the Notes&#151;Optional Redemption of the Notes." Finally, we may redeem the 2020
notes, the 2022 notes and/or the 2027 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 or any other Relevant Taxing Jurisdiction (as defined in the accompanying prospectus, but excluding, for
this purpose, the United States). </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 accompanying 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-9 of this prospectus supplement and on page&nbsp;9 of Novartis AG's annual report on
Form&nbsp;20-F for the year ended December&nbsp;31, 2016 incorporated herein by reference.</B></FONT></P>
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<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Price&nbsp;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>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT SIZE=1><B> </B></FONT><FONT SIZE=2>Per 2020 Note</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% </FONT></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Per 2022 Note</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% </FONT></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF" VALIGN="TOP">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;


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 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
</TR>

<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Per 2027 Note</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% </FONT></TD>
</TR>
<TR bgcolor="#FFFFFF" VALIGN="TOP">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
</TR>

<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF" VALIGN="TOP">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;<font>


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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</TR>

</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT SIZE=2>Plus
accrued interest, if any, from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017. </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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><I>Joint Book-Running Managers</I></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>BofA Merrill Lynch&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Citigroup&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J.P. Morgan  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017 </FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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</FONT></P>

<!-- TOC_END -->

<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><A
NAME="BG16601A_main_toc"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bg16601_table_of_contents_prospectus_supplement"> </A>
<BR></FONT><FONT SIZE=2><B>  Table of Contents    <BR>    <BR>    Prospectus Supplement    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>
<A NAME="BG16601_TOC2"></A> </FONT></P>
 <div style="display:none;*display:block;margin-top:-1pt;"></div>

 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
 <!-- COMMAND=ADD_TABLEWIDTH,"100%" -->
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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="27pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<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 COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Page </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#bi16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#bi16601_about_this_prospectus_supplement"><FONT SIZE=2>S-1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#bi16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#bi16601_where_you_can_find_more_information"><FONT SIZE=2>S-1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#bi16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#bi16601_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>S-1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#bi16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#bi16601_presentation_of_financial_information"><FONT SIZE=2>S-2</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#ca16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#ca16601_summary"><FONT SIZE=2>S-3</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16601_risk_factors"><FONT SIZE=2>S-9</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16601_use_of_proceeds"><FONT SIZE=2>S-12</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16601_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>S-12</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16601_capitalization"><FONT SIZE=2>S-13</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#de16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#de16601_description_of_the_notes"><FONT SIZE=2>S-14</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dg16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dg16601_tax_considerations"><FONT SIZE=2>S-21</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16601_underwriting"><FONT SIZE=2>S-26</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dk16601_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dk16601_selling_restrictions"><FONT SIZE=2>S-28</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#page_dk16601_1_31"><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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#page_dk16601_1_31"><FONT SIZE=2>S-31</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#page_dk16601_1_31"><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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#page_dk16601_1_31"><FONT SIZE=2>S-31</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bg16601_prospectus"> </A>
<BR></FONT><FONT SIZE=2><B>  Prospectus    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>
<A NAME="BG16601_TOC"></A> </FONT></P>
 <div style="display:none;*display:block;margin-top:-1pt;"></div>

 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="17pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da16602_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 VALIGN="TOP" 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;"><A HREF="#da16602_about_this_prospectus"><FONT SIZE=2>1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da16602_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 VALIGN="TOP" 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;"><A HREF="#da16602_where_you_can_find_more_information"><FONT SIZE=2>1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da16602_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 VALIGN="TOP" 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;"><A HREF="#da16602_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>1</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da16602_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 VALIGN="TOP" 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;"><A HREF="#da16602_presentation_of_financial_information"><FONT SIZE=2>2</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#da16602_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 VALIGN="TOP" 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;"><A HREF="#da16602_forward-looking_statements"><FONT SIZE=2>3</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc16602_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 VALIGN="TOP" 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;"><A HREF="#dc16602_use_of_proceeds"><FONT SIZE=2>5</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc16602_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 VALIGN="TOP" 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;"><A HREF="#dc16602_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>5</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc16602_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 VALIGN="TOP" 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;"><A HREF="#dc16602_novartis_ag"><FONT SIZE=2>6</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc16602_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 VALIGN="TOP" 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;"><A HREF="#dc16602_novartis_capital_corporation"><FONT SIZE=2>7</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#dc16602_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</FONT></A></TD>
<TD VALIGN="TOP" 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;"><A HREF="#dc16602_novartis_securities_investment_ltd."><FONT SIZE=2>7</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#de16602_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 VALIGN="TOP" 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;"><A HREF="#de16602_legal_ownership_of_debt_securities"><FONT SIZE=2>8</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#de16602_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 VALIGN="TOP" 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;"><A HREF="#de16602_description_of_debt_securities"><FONT SIZE=2>11</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#di16602_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 VALIGN="TOP" 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;"><A HREF="#di16602_tax_considerations"><FONT SIZE=2>22</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#di16602_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 VALIGN="TOP" 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;"><A HREF="#di16602_plan_of_distribution"><FONT SIZE=2>23</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#di16602_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 VALIGN="TOP" 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;"><A HREF="#di16602_legal_matters"><FONT SIZE=2>24</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#di16602_experts"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD VALIGN="TOP" 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;"><A HREF="#di16602_experts"><FONT SIZE=2>24</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#di16602_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 VALIGN="TOP" 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;"><A HREF="#di16602_limitations_on_enforcement_of_u.s._laws"><FONT SIZE=2>25</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bi16601_about_this_prospectus_supplement"> </A>
<A NAME="toc_bi16601_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", "us" and "Group" refer to Novartis AG and its consolidated affiliates unless the context
requires otherwise. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
prospectus supplement is for distribution only to persons who (i)&nbsp;have professional experience in matters relating to investments falling within Article&nbsp;19(5) of the
Financial Services and Markets Act&nbsp;2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order"), (ii)&nbsp;are persons falling within Article&nbsp;49(2)(a) to
(d)&nbsp;("high net worth companies, unincorporated associations, etc.") of the Financial Promotion Order, (iii)&nbsp;are outside the United Kingdom, or (iv)&nbsp;are persons to whom an
invitation or inducement to engage in investment activity (within the meaning of section&nbsp;21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any notes may
otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This prospectus supplement is directed only at relevant persons and
must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be
engaged in only with relevant persons. </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="bi16601_where_you_can_find_more_information"> </A>
<A NAME="toc_bi16601_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.&nbsp;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="bi16601_incorporation_of_certain_documents_by_reference"> </A>
<A NAME="toc_bi16601_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 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-1</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></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 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:</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, 2016; </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 February&nbsp;14, 2017 with a statement of computation of the ratio of earnings to fixed
charges; 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 supplement from now until we
terminate the offering of securities under this prospectus supplement, the accompanying prospectus and the registration statement: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<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 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 supplement
or the accompanying prospectus. </FONT></DD></DL>
</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 VALIGN="BOTTOM" 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:&nbsp;+&nbsp;41 61&nbsp;324 79 44<BR>
Fax:&nbsp;+&nbsp;41 61&nbsp;324 84 44<BR>
E-mail: investor.relations@novartis.com</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Novartis Services,&nbsp;Inc.<BR>
Investor Relations<BR>
230 Park Avenue, 21st&nbsp;Floor<BR>
New York, NY 10169<BR>
USA<BR>
Tel:&nbsp;+&nbsp;1&nbsp;212&nbsp;307 1122<BR>
Fax:&nbsp;+&nbsp;1&nbsp;212&nbsp;246 0185<BR>
E-mail: 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 does not, and will not, file separate reports with the SEC. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bi16601_presentation_of_financial_information"> </A>
<A NAME="toc_bi16601_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-2</FONT></P>

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

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;box-sizing:border-box;border:#000000 solid 1.0pt;padding-top:12.0pt;padding-right:12.0pt;padding-bottom:12.0pt;padding-left:12.0pt;">
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NAME="ca16601_summary"> </A>
<A NAME="toc_ca16601_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;</FONT><FONT SIZE=2><I>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.</I></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca16601_novartis_ag"> </A>
<A NAME="toc_ca16601_2"> </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>) 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 Group. Novartis AG is domiciled in and governed by the laws of Switzerland. Its principal executive office is located at Novartis&nbsp;AG, Lichtstrasse&nbsp;35,
CH-4056&nbsp;Basel, Switzerland, and its telephone number is +41&nbsp;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, 100% of most significant operating companies of the Group. The Group is a multinational group of
companies specializing in the research, development, manufacturing and marketing of a broad range of healthcare products, led by innovative pharmaceuticals. We provide healthcare solutions that
address the evolving needs of patients and societies worldwide. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the completion of a series of transactions in 2014 and 2015, the Group's continuing operations comprise three global operating divisions, Innovative Medicines (formerly named
Pharmaceuticals), Sandoz and Alcon. We also separately report the results of Corporate activities. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continuing
Operations:</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> Innovative Medicines (formerly named Pharmaceuticals): Innovative patent-protected prescription medicines </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 and biosimilars </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> Alcon: Surgical and vision care products </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> Corporate activities </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued
Operations:</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> Vaccines and Diagnostics: Preventive human vaccines and blood-testing 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> Consumer Health: OTC (over-the-counter medicines) and Animal Health </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> Corporate: certain transactional and other expenses related to the portfolio transformation </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis
has leading positions globally in the areas of each of our three divisions. To maintain our competitive positioning across these segments of the healthcare industry, we place a
strong focus on innovating to meet the evolving needs of patients around the world, working to grow our presence in new and emerging markets, and to enhance our productivity to invest for the future
and increase returns to shareholders. The financial results of our continuing Corporate activities include the costs of the Group headquarters and those of corporate coordination functions in major
countries. In addition, Corporate includes other items of income and expense that are not attributable to specific segments such as certain revenues from intellectual property rights and certain
expenses related to
post-employment benefits, environmental remediation liabilities, charitable activities, donations and sponsorships. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
April&nbsp;1, 2016, Alcon's Ophthalmic Pharmaceuticals products were transferred to our Innovative Medicines Division. At the same time, selected mature, non-promoted
pharmaceutical </FONT></P>
 </DIV>
 <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="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;box-sizing:border-box;border:#000000 solid 1.0pt;padding-top:12.0pt;padding-right:12.0pt;padding-bottom:12.0pt;padding-left:12.0pt;">
 <P style="font-family:times;"><FONT SIZE=2>products
were shifted from our Innovative Medicines Division to Sandoz, which has proven experience in managing mature products successfully. Following these changes our Alcon Division is now focused
on its Surgical and Vision Care franchises. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
May 2016, Novartis announced changes to focus its former Pharmaceuticals Division by creating two business units, Novartis Pharmaceuticals and Novartis Oncology, to form the
Innovative Medicines Division. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
January 2017, we announced that we are considering options for the Alcon Division. The review will explore all options, ranging from retaining all or part of the business to
separation via a capital markets transaction (e.g.,&nbsp;IPO or spin-off), in order to determine how to best maximize value for our shareholders. The review will be conducted during the course of
2017 and in a manner such that Alcon Division associates can fully focus on the unit's return to growth. The ophthalmic pharmaceutical portfolio is now fully integrated into our Innovative Medicines
Division and will not be part of the review. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
divisions are supported by the following cross-divisional organizational units: Novartis Institutes for BioMedical Research, Global Drug Development and Novartis Operations, which
includes Novartis Technical Operations and Novartis Business Services. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Novartis Institutes for BioMedical Research (NIBR) is the innovation engine of Novartis, which supports our Innovative Medicines Division and also collaborates with our Sandoz
Division. More than 6,000 scientists and associates at NIBR conduct research into various disease areas at sites located in the US, Switzerland, Singapore and China. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
July 2016, we established the Global Drug Development (GDD) organization to oversee all drug development activities for our Innovative Medicines Division and the biosimilars portfolio
of our Sandoz Division. Development of products for the Surgical and Vision Care franchises within our Alcon Division and of small molecule generics for our Sandoz Division are not included in GDD.
GDD works collaboratively with NIBR, Innovative Medicines and Sandoz to execute our overall pipeline strategy and takes an enterprise approach to pipeline portfolio management. GDD incorporates
centralized global functions such as Regulatory Affairs and Global Development Operations, as well as Global Development units aligned with our business franchises. GDD was created to increase
Group-wide coordination of drug development and to improve resource allocation, technology implementation and process standardization with a goal of further increasing innovation. We also appointed a
Global Head Drug Development and Chief Medical Officer, a newly created position in the Executive Committee of Novartis which reports to the CEO of Novartis. GDD includes approximately 10,000
associates worldwide. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Novartis
Business Services (NBS), our shared service organization, was, together with Novartis Technical Operations (NTO), made a part of Novartis Operations in 2016. NBS delivers
integrated solutions to all Novartis divisions and units worldwide. NBS seeks to drive efficiency and effectiveness across Novartis by simplifying and standardizing services across six service
domains: human resources, real estate and facility services, procurement, information technology, commercial and medical support activities, and financial reporting and accounting operations. NBS has
approximately 10,000 associates in more than 50 countries. NBS works to leverage the full scale of Novartis to create value across the company and to free up resources to invest in innovation and our
product pipeline. NBS continues to transfer the delivery of selected services to its five Global Service Centers in Dublin, Ireland; Hyderabad, India; Kuala Lumpur, Malaysia; Mexico City, Mexico; and
Prague, Czech Republic. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
July&nbsp;1, 2016, NTO was established in order to centralize management of our manufacturing operations across our Innovative Medicines and Sandoz Divisions, with a goal of
further improving efficiency. Manufacturing for Alcon's Surgical and Vision Care franchises continues to be managed by our Alcon Division. NTO is expected to optimize capacity planning and adherence
to </FONT></P>
 </DIV>
 <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="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;box-sizing:border-box;border:#000000 solid 1.0pt;padding-top:12.0pt;padding-right:12.0pt;padding-bottom:12.0pt;padding-left:12.0pt;">


<P style="font-family:times;"><FONT SIZE=2>quality
standards, and to lower costs through simplification, standardization and external spend optimization. Centralization is also expected to improve our ability to develop next generation
technologies, implement continuous manufacturing and share best practices across divisions. NTO includes approximately 28,000 associates and 67 manufacturing sites across our Innovative Medicines and
Sandoz Divisions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
shares are listed in Switzerland on the SIX Swiss Exchange under the symbol "NOVN" and our American Depositary Shares are listed on the New York Stock Exchange under the symbol
"NVS." As of December&nbsp;31, 2016, our Group companies employed approximately 118,000 full-time equivalent associates and sold products in approximately 155&nbsp;countries around the world. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca16601_novartis_capital_corporation"> </A>
<A NAME="toc_ca16601_3"> </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 230&nbsp;Park Avenue, 21st&nbsp;Floor, New York, New&nbsp;York&nbsp;10169,
USA, and its telephone number is&nbsp;+&nbsp;1&nbsp;212&nbsp;307 1122. </FONT></P>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-5</FONT></P>

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

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

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


<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
<DIV style="width:100%;box-sizing:border-box;border:#000000 solid 1.0pt;padding-top:12.0pt;padding-right:12.0pt;padding-bottom:12.0pt;padding-left:12.0pt;">
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc16601_the_offering"> </A>
<A NAME="toc_cc16601_1"> </A>
<BR></FONT><FONT SIZE=2><B>  The Offering    <BR>    </B></FONT></P>
 <div style="display:none;*display:block;margin-top:-1pt;"></div>

 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
 <!-- COMMAND=ADD_TABLEWIDTH,"100%" -->

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="32%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="64%" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><B>Notes</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal amount of 2020 notes (the "2020 notes")</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal amount of 2022 notes (the "2022 notes")</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal amount of 2027 notes (the "2027 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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>Novartis Capital Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Guarantees</B></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>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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>The 2020 notes will mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 2022 notes will mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 2027 notes will mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Interest Rate</B></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 2020 notes will bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% annually.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 2022 notes will bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% annually.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 2027 notes will bear interest at a rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% 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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>For each of the 2020 notes, the 2022 notes and the 2027 notes,
every&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, commencing on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017. 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 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 VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Regular Record Dates for Interest</B></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>For each of the 2020 notes, the 2022 notes and the 2027 notes,
every&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" 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 VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Optional Redemption</B></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>Prior to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020 in the case of the 2020 notes,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022 (the "2022 par call date") in the case of the 2022 notes
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027 (the "2027 par call date" and, together with the 2022 par call date, the "par call dates" and
each a "par call date") in the case of the 2027 notes, the notes of each series will be redeemable at our option, in whole or in part, at any time and from time to time at a redemption price equal to the greater of:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:0pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;text-align:left;"><p align=left style="font-family:times;margin-top:12pt;margin-bottom:-12pt;margin-left:0pt;"><FONT SIZE=2>


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</FONT> <FONT SIZE=2> </font> <font size=2> &#149;</font></p> <p align=left style="font-family:times;margin-top:0pt;margin-left:10pt;"><font size=2></FONT><FONT SIZE=2>100% of the principal
amount of the notes to be redeemed; and</FONT></TD>
</TR>
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<p style="font-family:times;"><font size=1></FONT><FONT SIZE=2>
</font></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:0pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;text-align:left;"><p align=left style="font-family:times;margin-top:0pt;margin-bottom:-12pt;margin-left:0pt;"><FONT SIZE=2>


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</FONT> <FONT SIZE=2> </font> <font size=2> &#149;</font></p> <p align=left style="font-family:times;margin-top:0pt;margin-left:10pt;"><font size=2></FONT><FONT SIZE=2>the sum of the present
values of the remaining scheduled payments of principal and interest on the notes to be redeemed that would be due if the applicable series of notes matured on the applicable par call date (in the case of the 2022 notes and the 2027 notes)
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020 in the case of the 2020 notes, together with, in each case, accrued interest to the date of redemption.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% in the case of the 2020 notes,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% in the case of the 2022 notes
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% in the case of the 2027 notes.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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>At any time on or after the 2022 par call date in case of the 2022 notes and the 2027 par call date in the case of the 2027 notes, the 2022 notes and the 2027 notes will be redeemable at our option, in
whole or in part, at any time and from time to time at a redemption price equal to 100% of the principal amount of the notes to be redeemed on that redemption date, together with, in each case, accrued interest to the date of redemption.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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>See "Description of the Notes&#151;Optional Redemption of the Notes."</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Tax Redemption</B></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>In the event of changes in withholding taxes applicable to payments of interest on the notes in Switzerland or any other Relevant Taxing Jurisdiction (but excluding, for this purpose, the United
States), we may redeem the notes of each series 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 VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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>See "Description of Debt Securities&#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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2>The notes of each series 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 VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Ranking</B></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 notes will rank equally in right of payment with all other senior, unsecured debt obligations of Novartis Capital Corporation.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</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 guarantees will rank equally in right of payment with all other senior, unsecured debt obligations of Novartis AG.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<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><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" 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 or another Relevant Taxing Jurisdiction from any payment made
on the 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>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I> </i></font></p>
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<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>See "Description of Debt Securities&#151;Covenants&#151;Payment of Additional Amounts" in the accompanying prospectus and "Description of the Notes&#151;Payment of Additional Amounts" below.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Repayment</B></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 notes will not be subject to repayment at the option of the holder prior to maturity.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Events of Default</B></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 events of default are subject to a number of important qualifications and exceptions. See "Description of Debt Securities&#151;Events of Default" in the accompanying prospectus and "Description of
the Notes&#151;Events of Default" below.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Sinking Fund</B></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>None.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<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><BR>&nbsp;</FONT></TD>
<TD 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>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Governing Law</B></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 notes and the guarantees will be governed by the laws of the State of New York.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Further Issuances</B></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>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 under the same CUSIP number unless such further notes are fungible with the notes
for U.S. federal income tax purposes. Any additional 2020 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the 2020 notes being offered hereby. Any additional 2022 notes issued in this manner will be
consolidated with and will form&nbsp;a single series with the 2022 notes being offered hereby. Any additional 2027 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the 2027 notes being offered
hereby.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Listing</B></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 notes will not be listed on any securities exchange or interdealer market quotation system.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2><B>Use of Proceeds</B></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>We intend to use the net proceeds from the sale of the notes for general corporate purposes, which may include the refinancing of existing indebtedness and stock repurchases.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Trustee; Principal Paying Agent; Transfer Agent</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>HSBC Bank USA, National Association.</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-8</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>  RISK FACTORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>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, 2016 and the extensive risk factors relating to our business described therein beginning on page&nbsp;9 thereof, before making a decision to invest in the
notes.</I></FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Risks Relating to the Notes  </B></FONT></P>

<P style="font-family:times;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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The notes will not be listed and may not have active trading markets.  </I></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 secondary markets for your notes develop, they 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 markets 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 markets for the notes or that active public markets for the notes will
develop. See "Plan of Distribution" in the accompanying prospectus. </FONT></P>

<P style="font-family:times;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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General market conditions and other factors could adversely affect market prices for the notes.  </I></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
markets 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 prices. </FONT></P>

<P style="font-family:times;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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Neither Novartis Capital Corporation nor Novartis AG is prohibited from issuing further debt.  </I></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 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&#151;Further Issuances." In addition, Novartis Capital Corporation 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 its aggregate total
$9.0&nbsp;billion U.S. Commercial Paper Programs. </FONT></P>

<P style="font-family:times;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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We may redeem the notes.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may redeem the 2020 notes, the 2022 notes and/or the 2027 notes, in whole or in part, at our option at any time and from time to time. See
"Description of the Notes&#151;Optional Redemption of the Notes" below and "Description of Debt Securities&#151;Optional Redemption for Tax Reasons" in the accompanying prospectus. </FONT></P>

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

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The notes will rank junior to any secured debt of Novartis Capital Corporation and the guarantees will rank
junior to the secured debt of Novartis AG.  </I></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 will rank equal in right of payment to all other existing and future
unsecured indebtedness of Novartis Capital Corporation. The 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 guarantees by Novartis&nbsp;AG will be subordinated to all existing and future secured indebtedness of Novartis&nbsp;AG to the extent of the assets securing that
indebtedness. If Novartis Capital Corporation or Novartis&nbsp;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&nbsp;AG nor Novartis Capital
Corporation has any secured indebtedness. </FONT></P>

<P style="font-family:times;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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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.  </I></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
notes are obligations of Novartis Capital Corporation and 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;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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The right to receive payments under the guarantees of Novartis AG may be adversely affected by Swiss
bankruptcy laws.  </I></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 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;;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2><B><I>


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Enforcement claims or court judgments against Novartis AG must be converted into Swiss francs.  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enforcement claims, including for 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 </FONT></P>

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

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

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

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16601_use_of_proceeds"> </A>
<A NAME="toc_dc16601_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;We estimate the net proceeds from the sale of the notes to be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;after deducting underwriting
discounts and net
expenses of the offering. We intend to use the net proceeds from the sale of the notes for general corporate purposes, which may include the refinancing of existing indebtedness and stock repurchases. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16601_ratios_of_earnings_to_fixed_charges"> </A>
<A NAME="toc_dc16601_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 unaudited 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>2016 </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>2015 </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>2014 </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>2013<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>2012<SUP>(1)(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
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<TD VALIGN="BOTTOM" style="font-family:times;text-align:justify;"><FONT SIZE=2>


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 10.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:17%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Figures
for 2013 and 2012 differ from previously published information and have been restated to reflect the implications of the presentation of continuing
operations as described in more detail for both years under Item&nbsp;18. Financial Statements&#151;Note&nbsp;30 in our Annual Report on Form&nbsp;20-F for the year ended
December&nbsp;31, 2014.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Figures
for 2012 have been restated to reflect the adoption of revised IAS19 on Employee Benefits. </FONT></DD></DL>
 </DIV>
 <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 income 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 of one-third of the total rental expense. </FONT></P>

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

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<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=14,EFW="2230897",CP="NOVARTIS AG",DN="1",CHK=249025,FOLIO='S-12',FILE='DISK104:[17ZAK1.17ZAK16601]DC16601A.;11',USER='PHARTER',CD='10-FEB-2017;08:41' -->
<A NAME="page_dc16601_1_13"> </A>

<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16601_capitalization"> </A>
<A NAME="toc_dc16601_3"> </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 non-controlling interests) as of
December&nbsp;31, 2016, on an actual basis and on an as adjusted basis to give effect to the sale of the notes (after deducting underwriting discounts). </FONT></P>
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<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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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=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>
2016 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH 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 Adjusted </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH 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 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 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;"><p style="font-family:times;margin-left:20pt;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 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>972</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>972</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>(76</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>(76</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>73,936</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>73,936 </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD 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>74,832</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>74,832 </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-controlling 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>59</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>59 </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;</TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD 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>74,891</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>74,891 </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




<!-- COMMAND=ADD_GUTTERGRID,"line-height:0pt;font-size:1.5pt;" -->


 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


<!-- COMMAND=ADD_GRID,"border-bottom:solid #000000 1.0pt;" -->


 <font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;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 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="#CCEEFF" VALIGN="BOTTOM">
<TD 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 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;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest bearing accounts of associates</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>1,601</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>1,601</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Bank and other 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>836</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>836</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>3,174</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>3,174</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>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>178</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>178</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>116</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>116</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD 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;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>5.125% $3,000&nbsp;million notes due 2019 of Novartis Securities Investment&nbsp;Ltd</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>2,995</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>2,995</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>4.400% $1,000&nbsp;million notes due 2020 of Novartis Capital Corporation</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>996</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>996</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2.400% $1,500&nbsp;million notes due 2022 of Novartis Capital Corporation</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>1,490</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>1,490</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>3.700% $500&nbsp;million notes due 2042 of Novartis Capital Corporation</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>489</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>489</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>3.400% $2,150&nbsp;million notes due 2024 of Novartis Capital Corporation</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>2,132</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>2,132</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>4.400% $1,850&nbsp;million notes due 2044 of Novartis Capital Corporation</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>1,823</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>1,823</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0.750% EUR 600&nbsp;million notes due 2021 of Novartis Finance&nbsp;S.A.&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>625</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>625</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>1.625% EUR 600&nbsp;million notes due 2026 of Novartis Finance&nbsp;S.A.&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>627</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>627</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0.250% CHF&nbsp;500&nbsp;million notes due 2025 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>491</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>491</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0.625% CHF&nbsp;550&nbsp;million notes due 2029 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>539</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>539</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>1.050% CHF&nbsp;325&nbsp;million notes due 2035 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>318</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>318</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>3.000% $1,750&nbsp;million notes due 2025 of Novartis Capital Corporation</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>1,728</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>1,728</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>4.000% $1,250&nbsp;million notes due 2045 of Novartis Capital Corporation</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>1,217</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>1,217</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0.125% EUR 1,250&nbsp;million notes due 2023 of Novartis Finance&nbsp;S.A.&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>1,299</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>1,299</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0.625% EUR 500&nbsp;million notes due 2028 of Novartis Finance&nbsp;S.A.&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>516</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>516</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>708</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>708</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>82</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>82</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;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>(178</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>(178</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2020 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>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2022 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>&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;"><p style="font-family:times;margin-left:20pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2027 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>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->




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 </font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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 </TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD 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>23,802</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="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#FFFFFF" -->





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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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 <font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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</TR>

<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD 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 style="font-family:times;"><FONT SIZE=2>
<!-- -->
$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>98,693</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
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$</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="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

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<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</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. Subsequent changes in share capital were converted at appropriate historical exchange rates.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Treasury
shares were converted at appropriate historical exchange rates. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-13</FONT></P>

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</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de16601_description_of_the_notes"> </A>
<A NAME="toc_de16601_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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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 2020
notes, the 2022 notes and the 2027 notes will each be a series of our debt securities. Novartis Capital Corporation will issue the 2020 notes in an initial aggregate principal amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The 2020 notes will mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2020.&nbsp;Novartis Capital Corporation will issue the 2022 notes in an initial aggregate principal amount of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The
2022 notes will mature on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022.&nbsp;Novartis Capital Corporation will issue the 2027 notes in an initial
aggregate principal amount of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The 2027 notes will mature
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027. The notes of each series 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, Novartis Capital Corporation 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 Novartis Capital Corporation. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017, 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 2020 notes, the 2022 notes and the 2027 notes twice a year,
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, commencing
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017, to the
person in whose name a 2020 note, a 2022 note or a 2027 note, respectively, is registered at the close of business on
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 2020 notes, the 2022 notes or the 2027 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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 or
another Relevant Taxing Jurisdiction from any payment made on the 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&#151;Covenants&#151;Payment of Additional Amounts" in the accompanying prospectus and
"&#151;Payment of Additional Amounts" below. </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><A HREF="#bg16601a_main_toc">Table of Contents</A></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&#151;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&#151;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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Optional Redemption of the Notes  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any time prior to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020 in the case of
the 2020 notes,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2022 (the "2022 par call date") in the case of the
2022 notes and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2027 (the "2027
par call date" and, together with the 2022 par call date, the "par call dates" and each a "par call date") in the case of the 2027 notes, Novartis
Capital Corporation may redeem the notes of the relevant series, in each case 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 that would be due if the applicable series of notes matured on the applicable par call date (in the case of the 2022 notes and
the 2027 notes) and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020 in the case of the 2020 notes (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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% in the case of the 2020 notes,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
in the case of
the 2022 notes and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% in the case of the 2027 notes, plus, in each case, accrued and unpaid interest thereon to, but excluding, the date of redemption. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any time on or after the 2022 par call date in the case of the 2022 notes and the 2027 par call date in the case of the 2027 notes, Novartis Capital Corporation may redeem the notes
of the relevant series, in each case in whole or in part, at its option at any time and from time to time at a redemption price equal to 100% of the principal amount of the notes to be redeemed on
that redemption date, plus, in each case, accrued and unpaid interest thereon to, but excluding, the date of redemption. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (assuming the applicable series of notes matured on the applicable par call date) 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 (assuming the applicable series of notes matured on the
applicable par call date). </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 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-15</FONT></P>

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<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 Citigroup Global Markets&nbsp;Inc., J.P. Morgan Securities&nbsp;LLC, Merrill Lynch, Pierce, Fenner&nbsp;&amp; Smith Incorporated,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(or their respective affiliates 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Payment of Additional Amounts  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any of the provisions described under "Description of Debt Securities&#151;Covenants&#151;Payment of Additional
Amounts" in the accompanying prospectus, no additional amounts will be payable with respect to Taxes for or on account of any withholding or deduction imposed under the U.S. Internal Revenue Code of
1986, as amended (the "Code"), any U.S. Treasury Regulations or other guidance issued or agreements entered into thereunder, any official written interpretations thereof or any law implementing an
intergovernmental approach thereto. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>



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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 notes in Switzerland or another Relevant Taxing
Jurisdiction (but excluding, for the purposes of this section, the United States), Novartis Capital Corporation may redeem the 2020 notes, the 2022 notes or the 2027 notes, in each case 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&#151;Optional Redemption for Tax
Reasons" in the accompanying prospectus. </FONT></P>

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

<HR NOSHADE>
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Events of Default  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Instead of the events of default described under "Description of Debt Securities&#151;Events of Default" in the accompanying prospectus,
an event of default with respect to the notes means only 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 (as described under "Description of Debt
Securities&#151;Covenants&#151;Payment of Additional Amounts" in the accompanying prospectus and under "&#151;Payment of Additional Amounts" above) 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, Novartis Capital Corporation 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 Novartis Capital Corporation 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 $350,000,000 (or its equivalent in any other currency or currencies); and (y)&nbsp;there shall not be deemed to be a default
(i)&nbsp;where Novartis Capital Corporation 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> <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 encumbrancer or a receiver or a person with similar functions appointed for execution (in Switzerland a </FONT> <FONT SIZE=2><I>Liquidator</I></FONT><FONT SIZE=2> or
</FONT><FONT SIZE=2><I>Konkursverwalter</I></FONT><FONT SIZE=2>) taking possession of the whole or any substantial part of the assets or
undertaking of Novartis Capital Corporation 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
Novartis Capital Corporation or Novartis AG and not being paid, discharged, removed or stayed within 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> Novartis Capital Corporation 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> Novartis Capital Corporation becoming bankrupt or insolvent or entering into a provisional or definitive moratorium or making a general
assignment for the benefit of its creditors; </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 being obliged to notify the court of its financial situation in accordance with
Article&nbsp;725 (2)&nbsp;of the Swiss Code of Obligations) or entering into a provisional or definitive moratorium (</FONT><FONT SIZE=2><I>provisorische or definitive
Nachlassstundung</I></FONT><FONT SIZE=2>) or making a general arrangement 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 effective resolution passed for the winding-up or dissolution of Novartis Capital Corporation or Novartis AG except
(i)&nbsp;a winding-up or dissolution, the terms of such winding-up or dissolution having previously been approved by the holders of a majority in </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-17</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>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) or (ii)&nbsp;a winding-up or dissolution in connection with any consolidation,
merger or sale in accordance with the provisions described under "Description of Debt Securities&#151;Consolidation, Merger or Sale" in the accompanying prospectus; 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> 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. </FONT></DD></DL>
</UL>

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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 2020 notes in the aggregate principal amount of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, the 2022 notes in the aggregate
principal amount
of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and the 2027 notes in the aggregate principal amount of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. 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 under the same CUSIP number unless such further notes are fungible with the notes for U.S. federal income tax purposes. Any additional 2020 notes
issued in this manner will be consolidated with and will form&nbsp;a single series with the 2020 notes being offered hereby. Any additional 2022 notes issued in this manner will be consolidated with
and will form&nbsp;a single series with the 2022 notes being offered hereby. Any additional 2027 notes issued in this manner will be consolidated with and will form&nbsp;a single series with the
2027 notes being offered hereby. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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

<HR NOSHADE>
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<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 partially owned by some of these participants or their representatives. 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 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 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>&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 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 DTC, 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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-20</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dg16601_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, Swiss tax and the European Union Savings 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 advisors 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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United States Taxation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion summarizes the material U.S. federal income tax consequences associated with the purchase, ownership and disposition of
the notes. This discussion is limited to notes purchased in the initial offering at their "issue price," which is generally the first price at which a substantial amount of the notes is sold to the
public, and held as capital assets within the meaning of section&nbsp;1221 of the Code. The following discussion is not exhaustive of all possible tax considerations. This summary is based upon the
Code, regulations promulgated under the Code by the U.S. Treasury Department ("Treasury") (including proposed and temporary regulations), rulings, current administrative interpretations and official
pronouncements of the Internal Revenue Service (the "IRS"), and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with
retroactive effect. It does not address considerations that may be relevant to an investor that is subject to special tax rules, such as certain financial institutions (e.g.,&nbsp;a bank or thrift),
real estate investment trust, regulated investment company, insurance company, pass-through entity (including an entity that is treated as a partnership for U.S. federal income tax purposes), 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, certain former citizens or long-term residents of the United States, a person whose "functional currency" is not the U.S. dollar, or a person subject
to the alternative minimum tax. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are a "U.S. holder" for the purposes of this discussion if you are a beneficial owner of notes who, for U.S. federal income tax purposes, is treated
as:</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 individual who is a citizen or resident of the United States; </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 corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or
under the laws of the United States, any state thereof, or the District of Columbia; </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 estate, the income of which is subject to U.S. federal income taxation regardless of its source; 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> a trust that (1)&nbsp;is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons (within the meaning
of the Code) or (2)&nbsp;has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-21</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are a "non-U.S. holder" for the purposes of this discussion if you are a beneficial owner of notes who, for U.S. federal income tax purposes, is treated
as:</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> a nonresident alien individual; </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 foreign corporation; </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 estate that is not subject to U.S. federal income tax on a net income basis; 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> a trust if (1)&nbsp;no U.S. court can exercise primary supervision over the trust's administration or no U.S. person and no group of such
persons is authorized to control all substantial decisions of the trust, and (2)&nbsp;the trust has no election to be treated as a U.S. person in effect. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a partnership (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds or is the beneficial owner of the notes, the tax treatment of a partner
in such partnership generally will depend on the status of the partner and the activities of the partnership. A beneficial owner of a note that is a partnership, and partners in such a partnership
should consult their tax advisors as to the tax consequences of an investment in the notes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
rulings from the IRS have or will be sought with respect to the matters discussed below. There can be no assurance that the IRS will not take a different position concerning the tax
consequences of the purchase, ownership or disposition of the notes or that any such position would not be sustained by a court of competent jurisdiction. You should consult your tax advisor regarding
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>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B><I>


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U.S. Holders  </I></B></FONT></P>

<UL>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>



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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 accounting for U.S. federal income tax purposes). Interest income on the notes will be treated as U.S. 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>


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Sale, Exchange or Other Taxable Disposition 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, which will be taxable as ordinary income, as described above) 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 if you have held the note for more than one year. Long-term capital gains recognized by non-corporate
taxpayers are taxed at rates lower than those applicable to ordinary income. The deductibility of capital losses is subject to limitations. </FONT></P>

<UL>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>


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Medicare Tax  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will
be subject to a 3.8% tax on the lesser of (1)&nbsp;the U.S. holder's "net investment income" in the case of individuals, and the "undistributed net investment income" in the case of estates and
trusts for the relevant taxable year and (2)&nbsp;the excess of the U.S. holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will
be between $125,000 and $250,000, depending on the individual's circumstances) (the "Medicare tax"). A holder's net investment income will generally include its interest income and its net </FONT></P>

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

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>gains
from the disposition of debt securities, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that
consists of certain passive or trading activities). If you are a U.S. holder that is an individual, estate, or trust, you are urged to consult your own tax advisors regarding the applicability of the
Medicare tax to your income and gains in respect of your investment in the notes. </FONT></P>

<UL>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>


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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 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B><I>


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Non-U.S. Holders  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as described below and under "FATCA Withholding", 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>payments
on a note to a non-U.S. holder (as defined above) will not be subject to U.S. federal income tax (including withholding tax), provided that, with respect to
payments of interest, (i)&nbsp;the non-U.S. holder does not actually or constructively own 10% or more of the combined voting power of all classes of our stock, (ii)&nbsp;the non-U.S. holder is
not a controlled foreign corporation related to us, directly or indirectly through stock ownership, (iii)&nbsp;the non-U.S. holder is not a bank extending credit to us in the ordinary course of its
trade or business, (iv)&nbsp;interest paid on the note is not effectively connected with the non-U.S. holder's conduct of a trade or business in the United States and (v)&nbsp;the beneficial owner
certifies on a properly executed applicable IRS Form&nbsp;W-8BEN, or IRS Form&nbsp;W-8BEN-E, as applicable, under penalties of perjury, that it is not a United States person; 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 (and, if required by an applicable income tax treaty, is attributable to a
United States permanent establishment) 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 certain other conditions are satisfied. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments
on a note owned by a non-U.S. holder will not be subject to information reporting requirements or backup withholding tax if the certification 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-23</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B><I>


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FATCA Withholding  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Foreign Account Tax Compliance Act provisions of the Hiring Incentives to Restore Employment Act (generally referred to as "FATCA"), and IRS
guidance impose a 30% U.S. federal withholding tax on payments of (i)&nbsp;interest and (ii)&nbsp;gross proceeds from sales, exchanges or other taxable dispositions of interest-bearing obligations
occurring after December&nbsp;31, 2018, in each case, to certain "foreign financial institutions" and "nonfinancial foreign entities, "as defined in the Code, if certain disclosure or certification
requirements related to U.S. accounts or ownership are not satisfied. In addition, an intergovernmental agreement between the United States and the jurisdictions of a foreign financial institution may
modify these rules. As noted above, neither the Issuer, any paying agent nor any other person will be obligated to pay any additional amounts to "gross up" payments to the noteholders or beneficial
owners of the notes for or on account of any withholding or deduction imposed under the Code, as amended, any U.S. Treasury Regulations or other guidance issued or agreements entered into thereunder,
any official written interpretations thereof or any law implementing an intergovernmental approach thereto. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noteholders
are urged to consult their own tax advisors regarding the application of FATCA with respect to an investment in the notes. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Swiss Taxation  </B></FONT></P>

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Swiss Withholding Tax  </I></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 Novartis Capital Corporation 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 by any kind of intragroup financing which would constitute a harmful "use of proceeds in Switzerland" as interpreted by
the Swiss Federal Tax Administration for purposes of Swiss Withholding Tax. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B><I>


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Swiss Federal Stamp Duty  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue of the notes to their initial holders will not be subject to Swiss federal stamp duty on the dealing in securities
("</FONT><FONT SIZE=2><I>Umsatzabgabe</I></FONT><FONT SIZE=2>") (primary market). A transfer of the notes in a secondary market transaction where a bank or another securities dealer in Switzerland or
Liechtenstein (as defined in the Swiss Federal Stamp Tax Act) acts as an intermediary or is a party to the transaction may be subject to Swiss securities transfer tax at an aggregate rate of up to
0.3% of the consideration paid for such notes. </FONT></P>

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

<HR NOSHADE>
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Income Taxation on Principal or Interest  </I></B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><I>(i)</I></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Notes held by non-Swiss holders</I></FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
noteholder who is not a tax resident in Switzerland and who during the taxation year has not engaged in a trade or business carried on through a permanent establishment or fixed place
of business in Switzerland will, in respect of payments of interest on, and repayment of principal of, the notes, and gain realized on the sale or redemption of notes, not be subject to income tax in
Switzerland. See "Swiss Withholding Tax" above for a summary on the deduction of Swiss federal withholding tax on payments of interest on the notes.  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><I>(ii)</I></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Notes held by Swiss resident holders as private assets</I></FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
individual who resides in Switzerland and holds the notes as private assets is required to include all payments of interest received on such notes in his or her personal income tax
return for the relevant tax period and will be taxed on the net taxable income (including the payments of interest on the notes) for such tax period at the then prevailing tax rates. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Swiss
resident individuals who sell or otherwise dispose of privately held notes realize either a tax-free private capital gain or a non-tax-deductible capital loss. See "Notes held as
Swiss business assets" below for a summary on the tax treatment of individuals classified as "professional securities dealers."  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><I>(iii)</I></FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Notes held as Swiss business assets</I></FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Swiss
resident corporate taxpayers, corporate taxpayers residing abroad holding notes as part of a permanent establishment or fixed place of business situated in Switzerland, and
individuals who hold notes as part of a permanent establishment or a business situated in Switzerland are required to
recognize payments of interest on, and any capital gain or loss realized on the sale or other disposal of, such notes in their income statement for the relevant tax period and will be taxed on any net
taxable earnings for such tax period at the then prevailing tax rates. The same taxation treatment also applies to Swiss resident individuals who, for Swiss income tax purposes, are classified as
"professional securities dealers" for reasons of, inter alia, frequent dealings or leveraged transactions in securities. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B><I>


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Automatic exchange of information  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Switzerland signed the Multilateral Competent Authority Agreement (the "MCAA") regarding the automatic exchange of information (the "AEOI")
which is based on OECD/Council of Europe administrative assistance convention. The Swiss Federal Act on the International Automatic Exchange of Information in Tax Matters entered into force on
January&nbsp;1, 2017. The AEOI is being introduced in Switzerland through bilateral agreements or multilateral agreements. On this basis, Switzerland will begin to collect data in respect of
financial assets, including, as the case may be, notes, held in, and income derived thereon and credited to, accounts or deposits with a paying agent in Switzerland for the benefit of individuals
resident in a EU member state or in a treaty state from, depending on the effective date of the respective agreement, in 2017 or 2018, as the case may be, and begin to exchange such data in 2018 or
2019, as the case may be. </FONT></P>

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

<HR NOSHADE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di16601_underwriting"> </A>
<A NAME="toc_di16601_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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017, we have agreed to sell to the
underwriters named below, for whom Citigroup Global Markets&nbsp;Inc., J.P. Morgan Securities&nbsp;LLC and Merrill Lynch, Pierce, Fenner&nbsp;&amp; Smith Incorporated are acting as representatives,
the following respective principal amounts of the notes: </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:auto;display:inline-block;*display:inline;zoom:1;;"><FONT SIZE=1><B>Underwriter

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<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<BR>
amount of<BR>
2020 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<BR>
amount of<BR>
2022 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<BR>
amount of<BR>
2027 Notes </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<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 Inc.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
<!-- -->
$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
<!-- -->
$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
<!-- -->
$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>J.P. Morgan 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>&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>
<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="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Merrill Lynch, Pierce, Fenner&nbsp;&amp; Smith<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>&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>
<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="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR BGCOLOR="White" VALIGN="BOTTOM">
<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 style="font-family:times;"><FONT SIZE=2>
<!-- -->
$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
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$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>
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$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD ALIGN="RIGHT" style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;



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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0pt;font-size:1.5pt;font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2></font>&#8203;


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<TD style="line-height:0pt;font-size:1.5pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>

<TR bgcolor="#FFFFFF"  VALIGN="BOTTOM">
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2>


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<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD ALIGN="RIGHT" style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
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<TD style="line-height:0.75pt;font-size:0.75pt;font-family:times;"><FONT SIZE=2></font>&#8203;<font></FONT></TD>
</TR>
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</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <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. The offering of the notes by the underwriters is subject to receipt and
acceptance and subject to the underwriters' right to reject any order in whole or in part. </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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the principal amount per 2020 note,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the principal amount per 2022 note
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
principal amount per 2027 note. The underwriters and the other broker-dealers may allow a discount of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the principal amount per 2020 note,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
principal amount per
2022 note and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the principal amount per 2027 note 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, rating agency fees and expenses, legal fees and expenses, accounting fees and expenses and
printing expenses) for this offering, excluding underwriting discounts, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The underwriters have agreed to reimburse us for a significant 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 new issues of securities with no established trading markets. The notes will not be listed on any securities exchange or interdealer market quotation system. One or more of
the underwriters intend to make a secondary market for each series of notes. However, they are not obligated to do so and may discontinue making a secondary market for either series of notes at any
time without notice. No assurance can be given as to how liquid the trading markets 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 several 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 style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment
banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to
time, performed, and may </FONT></P>

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

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_di16601_1_27"> </A>

<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>in
the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively
trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time
hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. Certain of the underwriters or their affiliates
have a lending relationship with us and routinely hedge their credit exposure to us consistent with their customary risk management policies. Typically, such underwriters and their affiliates would
hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the notes
offered hereby. Any such credit default swaps or short
positions could adversely affect future trading prices of the notes offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent
research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. </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. </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. </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> 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. </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> Syndicate covering transactions involve purchases of notes in the open market after the distribution has been completed in order to cover
syndicate short positions. </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> 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;In
connection with the offering of the notes, the underwriters (as "Stabilizing Managers") (or persons acting on their behalf) may over-allot notes or effect transactions with a view to
supporting the market prices of the notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilizing Managers (or persons acting on their behalf)
will undertake stabilization action. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant notes is made and, if begun,
may be ended at any time, but it must end no later than 30&nbsp;days after the date on which the issuer received the proceeds of the issue, or no later than 60&nbsp;days after the date of
allotment of the relevant notes, whichever is the earlier. </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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2017, which is the
third business day after the date hereof. </FONT></P>

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

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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NAME="page_dk16601_1_28"> </A>

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</FONT></P>

<!-- TOC_END -->

<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dk16601_selling_restrictions"> </A>
<A NAME="toc_dk16601_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SELLING RESTRICTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


<!-- COMMAND=STYLE_ADDED,"margin-left:10.0pt;text-indent:-10.0pt;" -->


European Economic Area  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement has been prepared on the basis that any offer of notes in any Member State of the European Economic Area (the "EEA")
will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of notes. Accordingly any person making or intending to make an offer in
that Member State of notes which are the subject of the offering contemplated in this prospectus supplement may only do so in
circumstances in which no obligation arises for us or any of the underwriters 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, in each case, in relation to such offer. Neither we nor the underwriters have authorized, nor do we or they authorize, the making of any offer of notes
in circumstances in which an obligation arises for us or the underwriters to publish or supplement a prospectus for such offer. Neither we nor the underwriters have authorized, nor do we or they
authorize, the making of any offer of notes through any financial intermediary, other than offers made by the underwriters, which constitute the final placement of the notes contemplated in this
prospectus supplement. </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 EEA, each underwriter has agreed that, with effect from and including the date on which the Prospectus Directive was implemented in that Member
State (the "Relevant Implementation Date"), it has not made and will not make an offer of notes which are the subject of the offering contemplated by this prospectus supplement to the public in that
Member State, except that it may, with effect from and including the Relevant Implementation Date, make an offer of such notes to the public in that Member
State:</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 any legal entity which is a qualified investor as defined in the Prospectus 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> to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the
Prospectus Directive subject to obtaining the prior consent of the underwriters for any such offer; 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> in any other circumstances falling within Article&nbsp;3(2) of the Prospectus Directive, </FONT></DD></DL>
</UL>

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

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the foregoing, (i)&nbsp;the expression an "offer of notes to the public" in relation to the notes in any Member State means the communication in any form and by means
of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in that Member State; (ii)&nbsp;"Prospectus Directive" means
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Member State), and includes any relevant implementing measure in each Member
State; and (iii)&nbsp;"2010 PD Amending Directive" means Directive 2010/73/EU. </FONT></P>

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United Kingdom  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document is for distribution only to persons who (i)&nbsp;have professional experience in matters relating to investments falling within
Article&nbsp;19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii)&nbsp;are persons falling within
Article&nbsp;49(2)(a) to (d)&nbsp;("high net worth companies, unincorporated associations etc") of the Financial Promotion Order, (iii)&nbsp;are outside the United Kingdom, or (iv)&nbsp;are
persons to whom an invitation or inducement to engage in investment activity (within the meaning of section&nbsp;21 of the Financial Services and Markets Act 2000 (the "FSMA")) in connection with
the issue or sale of any </FONT></P>

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

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>securities
may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This document is directed only at relevant persons
and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be
engaged in only with relevant persons. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
underwriter has agreed 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 FSMA) received by it in connection with the issue or sale of the notes in circumstances in which section&nbsp;21(1) of the FSMA does not
apply to Novartis Capital Corporation or Novartis AG; 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>it
has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise
involving the United Kingdom. </FONT></DD></DL>
</UL>

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Switzerland  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each underwriter has agreed that: (a)&nbsp;it has not publicly offered, sold or advertised, and will not publicly offer, sell or advertise,
the notes in Switzerland, as such term is defined or interpreted under the Swiss Code of Obligations ("CO"); (b)&nbsp;neither this prospectus supplement, the accompanying prospectus nor any
documents related to the notes constitute a prospectus within the meaning of art.&nbsp;652a or art.&nbsp;1156 CO; and it will not distribute the notes in or from Switzerland, as such term is
defined or interpreted under the Swiss Collective Investments Schemes Act ("CISA"). The notes will not be listed on the SIX Swiss Exchange or on any other exchange or regulated trading facility in
Switzerland 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 or of any other exchange or regulated trading facility in Switzerland. 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Canada  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The notes may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as
defined in National Instrument&nbsp;45-106 Prospectus Exemptions or subsection&nbsp;73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National
Instrument&nbsp;31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the notes must be made in accordance with an exemption from, or in a transaction not
subject to, the prospectus requirements of applicable securities laws. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement and the accompanying
prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the
securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for
particulars of these rights or consult with a legal advisor. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to section&nbsp;3A.3 of National Instrument&nbsp;33-105 Underwriting Conflicts (NI&nbsp;33-105), the underwriters are not required to comply with the disclosure
requirements of NI&nbsp;33-105 regarding underwriter conflicts of interest in connection with this offering. </FONT></P>

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

<HR NOSHADE>
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Hong Kong  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No notes may be offered or sold in Hong Kong, by means of any document, other than (a)&nbsp;to "professional investors" as defined in the
Securities and Futures Ordinance (Cap. 571) of Hong Kong (the "SFO") and any rules made thereunder; or (b)&nbsp;in other circumstances which do not result in the document being a "prospectus" as
defined in the Companies Ordinance (Cap. 32)&nbsp;of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
advertisement, invitation or document relating to the notes, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if
permitted to do so under the securities laws of Hong Kong) has been or will be issued other than with respect to the notes which are or are intended to be disposed of only to persons outside Hong Kong
or only to "professional investors" as defined in the SFO and any rules made thereunder. </FONT></P>


<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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 Financial Instruments and Exchange Law of Japan, or the FIEL, and the notes will
not be offered or sold, 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 reoffering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to any exemption from the
registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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, 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
pursuant to Section&nbsp;275(1), or any person under 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 of the SFA by a relevant person which is: (a)&nbsp;a corporation (which is not an accredited investor (as defined
in Section&nbsp;4A of the SFA)) 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 of the trust is an individual who is an accredited investor,
Securities (as defined in Section&nbsp;239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (however described) in that trust shall not be transferred within
6&nbsp;months after that corporation or that trust has acquired the notes pursuant to an offer made under Section&nbsp;275 of the SFA except: (1)&nbsp;to an institutional investor or to a
relevant person defined in Section&nbsp;275(2) of the SFA, or to any person arising from an offer referred to in Section&nbsp;275(1A) or Section&nbsp;276(4)(i)(B) of the SFA; (2)&nbsp;where no
consideration is or will be given for the transfer; (3)&nbsp;when the transfer is by operation of law; (4)&nbsp;as specified in Section&nbsp;276(7) of the SFA; or (5)&nbsp;as specified in
Regulation&nbsp;32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations&nbsp;2005 of Singapore. </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Cayman Islands  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No invitation, whether direct or indirect, may be made to a member of the public in the Cayman Islands to purchase the notes. Accordingly, no
such invitation is made by this prospectus supplement. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>S-30</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16601a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dk16601_legal_matters"> </A>
<A NAME="toc_dk16601_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 Mayer Brown International&nbsp;LLP and for the underwriters by Shearman&nbsp;&amp;
Sterling&nbsp;LLP. Shearman&nbsp;&amp; Sterling&nbsp;LLP has performed and from time to time performs 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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<A NAME="toc_dk16601_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 supplement and the accompanying prospectus by reference to the Annual Report on
Form&nbsp;20-F for the year ended December&nbsp;31, 2016 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-31</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A> </FONT></P>

<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="g418586.jpg" ALT="LOGO" WIDTH="271" HEIGHT="46">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B> Novartis Capital Corporation  </B></FONT></P>

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

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Fully and Unconditionally Guaranteed by  </B></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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<BR>  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=5><B>Novartis Securities Investment&nbsp;Ltd.  </B></FONT></P>

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

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Fully and Unconditionally Guaranteed by  </B></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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<BR>  </B></FONT></P>

<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 or Novartis Securities Investment&nbsp;Ltd., 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=3><B>Investing in our debt securities involves certain risks. See "Risk Factors" on page&nbsp;2 to read about certain factors you should consider
before investing in our debt securities.</B></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>
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&nbsp;&nbsp;&nbsp;
</font></p>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>The
date of this prospectus is September&nbsp;18, 2015. </FONT></P>

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

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<A NAME="BG16602_TOC"></A> </FONT></P>
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Page </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_about_this_prospectus"><FONT SIZE=2>1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_where_you_can_find_more_information"><FONT SIZE=2>1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_incorporation_of_certain_documents_by_reference"><FONT SIZE=2>1</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_presentation_of_financial_information"><FONT SIZE=2>2</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_risk_factors"><FONT SIZE=2>2</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#da16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#da16602_forward-looking_statements"><FONT SIZE=2>3</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16602_use_of_proceeds"><FONT SIZE=2>5</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16602_ratios_of_earnings_to_fixed_charges"><FONT SIZE=2>5</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16602_novartis_ag"><FONT SIZE=2>6</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16602_novartis_capital_corporation"><FONT SIZE=2>7</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#dc16602_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</FONT></A></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#dc16602_novartis_securities_investment_ltd."><FONT SIZE=2>7</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#de16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#de16602_legal_ownership_of_debt_securities"><FONT SIZE=2>8</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#de16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#de16602_description_of_debt_securities"><FONT SIZE=2>11</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16602_tax_considerations"><FONT SIZE=2>22</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16602_plan_of_distribution"><FONT SIZE=2>23</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16602_legal_matters"><FONT SIZE=2>24</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16602_experts"><FONT SIZE=2>24</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><A HREF="#di16602_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 VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><A HREF="#di16602_limitations_on_enforcement_of_u.s._laws"><FONT SIZE=2>25</FONT></A></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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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>i</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da16602_about_this_prospectus"> </A>
<A NAME="toc_da16602_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 and Novartis Securities Investment&nbsp;Ltd., a limited
liability company incorporated under the laws of Bermuda. 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", "us" and "Group" refer to Novartis AG and its consolidated affiliates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da16602_where_you_can_find_more_information"> </A>
<A NAME="toc_da16602_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="da16602_incorporation_of_certain_documents_by_reference"> </A>
<A NAME="toc_da16602_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 in such incorporated documents is deemed to be modified or superseded for the purpose of this </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>1</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>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, 2014; </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 February&nbsp;13, 2015 relating to the FDA priority review granted to Novartis' heart
failure medicine LCZ696; </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 March&nbsp;6, 2015 relating to the FDA approval of first biosimilar Zarxio<SUP>TM</SUP>
from Sandoz; </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 April&nbsp;16, 2015 relating to the FDA approval for Glatopa<SUP>TM</SUP> as first
generic competitor to MS therapy Copaxone&reg; 20mg; </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 interim financial report for the second quarter and first half of 2015 included as Exhibit&nbsp;99.2 to our Report on
Form&nbsp;6-K furnished to the SEC on July&nbsp;21, 2015; </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 September&nbsp;16, 2015 relating to the FDA approval for Novartis' heart failure medicine
LCZ696, now called Entresto<SUP>TM</SUP>, to reduce risk of cardiovascular death and heart failure hospitalization; 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>
<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 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>
</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 Services,&nbsp;Inc.<BR>
Investor Relations<BR>
230 Park Avenue, 21st&nbsp;Floor<BR>
New York, NY 10169<BR>
USA<BR>
Tel: + 1 212 307 1122<BR>
Fax: +1 212 246 0185<BR>
E-mail: investor.relations@novartis.com</FONT></TD>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da16602_presentation_of_financial_information"> </A>
<A NAME="toc_da16602_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="da16602_risk_factors"> </A>
<A NAME="toc_da16602_5"> </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 our debt securities involves certain risks. You should read "Risk Factors" on pages&nbsp;8&nbsp;-&nbsp;23 of our annual
report on Form&nbsp;20-F for the year ended December&nbsp;31, 2014, which is incorporated by reference in this prospectus, or similar sections in subsequent filings incorporated by reference in
this prospectus, for a discussion of certain factors you should consider before investing in our debt securities. </FONT></P>

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_da16602_6"> </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. 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 words such as "potential," "expected," "will," "planned,"
"pipeline," "outlook," or similar terms, 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; regarding potential shareholder returns or credit ratings; regarding the potential financial or other impact on Novartis of the transactions with GlaxoSmithKline&nbsp;plc
("GSK"), Eli Lilly and Company ("Lilly") or CSL Limited ("CSL"), or regarding any potential strategic benefits, synergies or opportunities as a result of these transactions; or regarding potential
future sales or earnings of the Novartis Group or its divisions and associated companies; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these
statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and
uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the
forward-looking 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 any existing products in any
market, or that any approvals which are obtained will be obtained at any particular time, or that any such products will achieve any particular revenue levels. Neither can there be any guarantee that
Novartis will be able to realize any of the potential strategic benefits, synergies or opportunities as a result of the transactions with GSK, Lilly or CSL. Nor can there be any guarantee that the
Novartis Group, or any of its divisions or associated companies, will be commercially successful in the future, achieve any particular financial results, or achieve any particular credit rating or
level of shareholder returns. Neither can there be any guarantee that the turnaround plan under development at Alcon will be successfully developed or implemented or will achieve its goals. In
particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; the potential that the strategic benefits,
synergies or opportunities expected from the transactions with GSK, Lilly or CSL may not be realized or may take longer to realize than expected; the inherent uncertainties involved in predicting
shareholder returns or credit ratings; the uncertainties inherent in research and development, including unexpected clinical trial results and additional analysis of existing clinical data; the
Group's ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on the Group of the loss of patent protection and exclusivity on key
products which will continue this year; unexpected manufacturing or quality issues; unexpected safety issues; global trends toward health care cost containment, including ongoing pricing pressures and
ongoing reimbursement challenges with payors; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and
investigations regarding sales and marketing practices, government investigations and intellectual property disputes; general economic and industry conditions, including uncertainties regarding the
effects of the persistently weak economic and financial environment in many countries; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products;
uncertainties involved in the development of new healthcare products; uncertainties regarding potential significant breaches of data security or disruptions of the Company's information technology
systems; and other risks and factors referred to in Novartis AG's current Form&nbsp;20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those 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 </FONT></P>

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

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16602_use_of_proceeds"> </A>
<A NAME="toc_dc16602_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, which may include the refinancing of existing short- and long-term indebtedness. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16602_ratios_of_earnings_to_fixed_charges"> </A>
<A NAME="toc_dc16602_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 unaudited 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=3 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Six Months Ended<BR>
June&nbsp;30, </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>Year Ended December&nbsp;31, </B></FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2015 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2014 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2013<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2012<SUP>(1)</SUP><SUP>(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2011<SUP>(1)</SUP><SUP>(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=1><B>2010<SUP>(1)</SUP> </B></FONT></TH>
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 13.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>16.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>12.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.7</FONT></TD>
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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>Figures
for 2013, 2012, 2011 and 2010 differ from previously published information and have been restated to reflect the implications of the presentation of
continuing operations as described in more detail for the years 2013 and 2012 under Item&nbsp;18. Financial Statements&#151;Note&nbsp;30 in our Annual Report on Form&nbsp;20-F for the
year ended December&nbsp;31, 2014.
<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>Figures
for 2012 and 2011 have been restated to reflect the adoption of revised IAS 19 on </FONT><FONT SIZE=2><I>Employee Benefits</I></FONT><FONT SIZE=2>. </FONT></DD></DL>
 </DIV>
 <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 income 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 of one-third of the total rental expense. For the period ended June&nbsp;30, 2015, we have assumed rental expenses equal
to 50% of the total expected rental expense for the full year 2015. For the period ended June&nbsp;30, 2014, we have assumed rental expenses equal to 50% of the total actual rental expense for the
full year 2014. </FONT></P>

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dc16602_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>) 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 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 most significant operating companies of the Group. The Group is a multinational group of
companies specializing in the research, development, manufacturing and marketing of a broad range of healthcare products, led by innovative pharmaceuticals. We provide innovative healthcare solutions
that address the evolving needs of patients and societies worldwide. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the completion of the previously-announced portfolio transformation transactions with GlaxoSmithKline&nbsp;plc, Eli Lilly and Company and CSL Limited, the continuing
operations of the Group's wholly-owned businesses are organized into three global 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: Innovative patent-protected prescription medicines </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> Alcon: Surgical, ophthalmic pharmaceutical and vision care products </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></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have leading positions globally in each of these three areas of our continuing operations. To maintain our competitive positioning across these growing segments of the healthcare
industry, we place a strong focus on innovating to meet the evolving needs of patients around the world, growing our presence in new and emerging markets, and enhancing our productivity to invest for
the future and increase returns to shareholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
separately report the financial results of our Corporate activities as part of our continuing operations. Income and expenses relating to Corporate include the costs of the Group
headquarters and those of corporate coordination functions in major countries. In addition, Corporate includes other items of income and expense which are not attributable to specific segments such as
certain expenses related to post-employment benefits, environmental remediation liabilities, charitable activities, donations and sponsorships. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
divisions are supported by Novartis Business Services and the Novartis Institutes for BioMedical Research:</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 Business Services (NBS) was launched in July 2014 with the transfer of over 7,000 associates, and started operations in January 2015
as a shared services organization. NBS is designed to enhance profitability by harmonizing high-quality services at better price across the Group and its divisions. </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 Novartis Institutes for BioMedical Research (NIBR) was created in 2003, and is headquartered in Cambridge, Massachusetts. More than 5,900
scientists and associates at NIBR conduct research into various disease areas at sites located in the US, Switzerland, UK, Italy, Singapore and China. </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 SIX Swiss Exchange under the symbol "NOVN" and our American Depositary Shares are listed on the New York Stock Exchange under the symbol
"NVS." Our Group companies employed approximately 120,000 full-time equivalent associates as of June&nbsp;30, 2015. Our products are available in approximately 180 countries around the world. </FONT></P>

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16602_novartis_capital_corporation"> </A>
<A NAME="toc_dc16602_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 230 Park Avenue, 21st&nbsp;Floor, New York, New York 10169, USA, and its telephone
number is&nbsp;+&nbsp;1&nbsp;212&nbsp;307 1122. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc16602_novartis_securities_investment_ltd."> </A>
<A NAME="toc_dc16602_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 8025. </FONT></P>

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de16602_legal_ownership_of_debt_securities"> </A>
<A NAME="toc_de16602_1"> </A>
<BR></FONT><FONT SIZE=2><B>  LEGAL OWNERSHIP OF DEBT SECURITIES    <BR>    </B></FONT></P>

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"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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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>

<HR NOSHADE>
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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>

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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; provided,
however, that the physical certificates are issued in a registered form for U.S. federal income tax purposes. 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>

<HR NOSHADE>
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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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<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>

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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 themselves 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, dated February&nbsp;10, 2009 among the Novartis finance subsidiaries and Novartis Finance&nbsp;S.A., as
issuers, HSBC Bank USA, National Association, as trustee, and Novartis AG, as guarantor. The indenture is 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>



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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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<UL>
<UL>

<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 and Bermuda tax considerations. </FONT></P>

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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>

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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 (as described below under "&#151;Covenants&#151;Payment of 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 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 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

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<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>

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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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Covenants  </B></FONT></P>

<UL>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>


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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 any authority or agency therein or thereof having power to tax (each of clauses&nbsp;(i), (ii)&nbsp;and (iii), a </FONT></P>

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

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>"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 or 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>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>



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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><I>



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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


<!-- COMMAND=STYLE_ADDED,"margin-left:10.0pt;text-indent:-10.0pt;" -->


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

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<UL>
<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>guarantor
(or any 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>
</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,
subject to the conditions described under "&#151;Covenants&#151;Payment of Additional Amounts" above. 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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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 (as described under "&#151;Covenants&#151;Payment of Additional
Amounts" above) 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 </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>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></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 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>) 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&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 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; </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&nbsp;725
(2)&nbsp;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>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<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 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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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, we may modify our rights and obligations and those of the holders under the indenture 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>
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</FONT></P>

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<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>



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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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

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<P style="font-family:times;"><FONT SIZE=2><A HREF="#bg16602a_main_toc">Table of Contents</A></FONT></P>

<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 (as described under "&#151;Covenants&#151;Payment of Additional Amounts" above), 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&#151;Global Securities&#151;Special Situations." </FONT></P>

<P style="font-family:times;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>



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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;;margin-left:10.0pt;text-indent:-10.0pt;"><FONT SIZE=2><B>


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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 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_di16602_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>

<HR NOSHADE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_di16602_2"> </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 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di16602_legal_matters"> </A>
<A NAME="toc_di16602_3"> </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 Mayer Brown International&nbsp;LLP and for the underwriters by Shearman&nbsp;&amp;
Sterling&nbsp;LLP. Shearman&nbsp;&amp; Sterling&nbsp;LLP has performed and from time to time performs legal services for us and our subsidiaries and affiliates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di16602_experts"> </A>
<A NAME="toc_di16602_4"> </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, 2014 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. PricewaterhouseCoopers AG is a member of EXPERTsuisse - Swiss Expert Association for Audit, Tax and Fiduciary. </FONT></P>

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

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di16602_limitations_on_enforcement_of_u.s._laws"> </A>
<A NAME="toc_di16602_5"> </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 and all or a substantial portion of our assets and the
assets of such persons are located 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. In addition, awards for punitive damages in actions brought in the United States or elsewhere may be
unenforceable in Switzerland. </FONT></P>

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

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
