Lek Business Results in the first six months of 2005

Western Europe, the USA and overseas countries accounted for 29.6% of total sales, Central and Eastern Europe and the CIS accounted for 58.5%, and the Slovene market 11.9%. With this Lek achieved a very balanced sales markets structure, which allows us to attain optimal utilization of the potentials of products which are intended for global sales. The USA remains Lek’s leading market.

If we focus on regional market structure, the share of sales in the countries of the expanded European Union amounted to 37.1% of total sales.

Lek records the majority of its sales in pharmaceutical products (prescription drugs and over the counter products), namely 92.2%, and 7.8% in other programs.

In H1 2005 Lek invested SIT 6.663 bn, mainly in enhancing of production facilities for demanding pharmaceutical products.

The markets of Central and Eastern Europe, Southeast Europe and the Commonwealth of Independent States recorded in the first six months of 2005 sales of USD 247.6 m, a growth rate of 13 percent in comparison with the same period in the previous year.

On its traditional markets, Poland, the Russian Federation and Slovenia, Lek is one of the leading generic pharmaceutical companies. The highest growth was recorded in the Russian Federation and in Poland.

The Supervisory Board of Lek, a new Sandoz company, at its latest meeting on July 6, 2005 appointed a new member to the Board of Management, Ksenija Butenko Černe, who joins the formerly three-member Board of Management. On being appointed to the Board of Management she will assume the responsibility for managing and ensuring the legal alignment of Lek’s operations as a corporate citizen.

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Lek, a new Sandoz company, is an international pharmaceutical company which operates as a business center on the markets of Central and Eastern Europe, Southeastern Europe and the CIS region, and also markets its products successfully on the US market, in the EU and elsewhere around the world. Lek creates value through the development, manufacturing and sales of pharmaceutical products, active pharmaceutical ingredients and biopharmaceutical products. Lek employs about 4,186 people in various regions and achieved total sales of USD 746.5 million in 2004. For further information please consult http://www.lek.si

Sandoz, a Novartis company, is a leading global supplier of high-quality generic pharmaceuticals. Headquartered in Vienna, Austria, Sandoz is a Retail Generics company operating also two Business Units with specific strategic focus – Industrial Products and Biopharmaceuticals. In 2004, Sandoz achieved sales of USD 3.045 billion, employs about 13,400 people and operate in over 120 countries around the world.

Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2004, the Group’s business achieved sales of USD 28.2 billion and proforma net income of USD 5.8 billion. The Group invested approximately USD 4.2 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 83,700 people and operate in over 140 countries around the world. For further information, please consult http://www.novartis.com

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