Lek d.d. business results first quarter 2006

Lek d.d. once again posted its highest sales figures in pharmaceutical products (prescription medicines), at SIT 27.8 bn, with OTC medicines accounting for SIT 4.6 bn. Lek’s other programs amounted to SIT 2.9 bn.

Among sales regions, sales in Slovenia accounted for 9.1%, Central and Eastern Europe 56.2%, and Western Europe, the USA and Overseas Countries accounted for 34.7% of total sales. Lek’s leading market in the first quarter of 2006 was the Russian Federation, which also posted the highest sales growth at 77.2 percent.

The leading product in the first quarter of 2006 was again Amoxiclav, which is a global product with respect to the number of markets and sales routes. It was followed by Ketonal, Omeprazol and Linex.

Investments in development

The Lek Development Center is one of the established development centers within the Sandoz Group. In 2006 it is continuing with intensive development activities of new pharmaceutical products and active pharmaceutical ingredients, which all together make up an extensive development portfolio. The number of projects involving both final dosage forms and active pharmaceutical ingredients is increasing every year, and has more than doubled in the last two years. Lek’s development center for drugs and active pharmaceutical ingredients is one of Sandoz’s most important centers. It develops products for the European Union, the USA and Canada, and this year it has added a significant number of development projects for the Japanese and Australian markets and thus achieved a high level of globalization.

Lek is also increasing its level of investment in the new generation of generics – biopharmaceuticals, in which it is currently investing in development and manufacturing capacities.

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  Lek, a Sandoz company, is one of the pillars of leading world generics company Sandoz. It operates as a global development center for products and technologies, as a global manufacturing center for active pharmaceutical ingredients and medicines, as a competence center for the development of vertically integrated products, as a Sandoz competence center in the field of development and manufacturing of biopharmaceutical products and as a supply center for the markets of CEE, SEE and CIS, sales Slovenia and sales services for Sandoz’s global markets. Lek d.d. employs about 2,850 people and achieved total sales of USD 656,5 million in 2005. For further information please consult http://www.lek.si

Sandoz, a Division of the Novartis group, is a global leader in the field of generic pharmaceuticals, offering a wide array of high-quality, affordable products that are no longer protected by patents. Sandoz has a portfolio of more than 600 active substances in over 5 000 forms worldwide. Key product groups include antibiotics, treatments for central nervous system disorders, gastrointestinal medicines, cardiovascular treatments and hormone therapies. Sandoz develops, produces and markets these drugs along with pharmaceutical and biotechnological active substances and anti-infectives. In addition to the strong organic growth in recent years, Sandoz has made a series of acquisitions including Lek (Slovenia), Sabex (Canada), Hexal (Germany) and EonLabs (U.S.) and sells its products in more than 110 countries. In 2005, Sandoz employed around 20,000 people worldwide and posted sales of USD 4.7 billion

Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis is the only company with leadership positions in both patented and generic pharmaceuticals. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics and leading self-medication OTC brands. In 2005, the Group’s businesses achieved net sales of USD 32.2 billion and net income of USD 6.1 billion. Approximately USD 4.8 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 91,000 people and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

This press release contains statements and conclusions based on projections of Lek’s future business operations. These estimates are derived from the best information currently available. In case these forecasts prove unreliable, the actual results could prove different from those projected.