בהודעת עתונות שנשלחה אלינו ע”י חברת נוברטיס הבינ”ל, מדווחת החברה על כך שרכשה 2 חברות גנריות (הקסל – רכישה מלאה, ואאון – 66% מהחברה) ובכך הפכה להיות החברה המובילה בעולם בגנריקה.

בהודעתה מסבירה נוברטיס שהרכישה הזו מחזקת את כוחה של נוברטיס בשוק הגנרי הבינ”ל בעיקר בארה”ב וגרמניה, מרחיבה משמעותית את מגוון המוצרים הקיימים וגם את אלה שנמצאים בפיתוח. כמו כן מדגישה נוברטיס את היכולות של חברות אלה להגיע ראשונים לשוק עם תחליפים גנריים, ולהוות מנהיגות בתחום הביוגנרי.

היקף הרכישה של שתי החברות מסתכם ב-5.65 מיליארד יורו, אך החברה מאמינה שהמיזוג צפוי להביא לחיסכון שנתי של כ-200 מיל’ $.

לפניכם הודעת נוברטיס המקורית במלואה:

EDIA RELEASE • COMMUNIQUE AUX MEDIAS • MEDIENMITTEILUNG

Novartis to acquire Hexal AG and Eon Labs, creating the world leader

Basel, February 21, 2005 Novartis announced today the strategic acquisition of two leading

generic drug companies that will be integrated into its Sandoz division, creating the world

leader in the generic drug industry.

Definitive agreements have been signed to acquire 100% of Hexal AG, the privately-held

No. 2 generics company in Germany with a strong European presence, and a 67.7% stake

(65.4% fully diluted) in Eon Labs, Inc. (NASDAQ: ELAB), a fast-growing US generics

company that has a strategic partnership with Hexal AG, for a total of EUR 5.65 billion in

cash. In addition, pursuant to a merger agreement unanimously approved by the Eon Board

of Directors and the Special Committee of independent directors of the Eon Board, Novartis

will launch a tender offer to acquire the remaining 31.9 million fully diluted shares (34.6%)

in Eon Labs for USD 31.00 per share.

The acquisitions bring together three premier generics companies that combine Sandozs

global geographic presence and expertise in anti-infectives, Hexals leadership in Germany

and strong track record of successful product development, and Eon Labs strong position in

the US for “difficult-to-make” generics.

Sandoz, after the closing of these transactions, will be the global leader in generics with

combined pro forma 2004 sales of USD 5.1 billion, a portfolio of over 600 active ingredients

in more than 5,000 dosage forms and more than 20,000 employees.

Annual cost synergies totaling USD 200 million are anticipated within three years after

closing, with 50% in the first 18 months. Synergies will be driven mainly by savings in

production, especially in sourcing, lower processing costs and reduced Cost of Goods Sold

(COGS) through vertical integration; Marketing & Sales through consolidation of back-office

operations and distribution; Development through the streamlining of the project portfolio

and less need for in-licensed products; and General & Administrative expenses due to the

consolidation of administration and management structures. The strong growth outlook for

Sandoz, which will create jobs, is expected to partially compensate for necessary reductions

in the workforce.

“Generic drugs are crucial to meeting the health-care needs of patients in industrialized and

developing countries as cost pressures continue to mount due to the ever-increasing demand

of an aging population. As such, generic medicines are a critical complement to innovative

medicines, freeing up resources and also providing an indirect stimulus to continued

innovation. The acquisitions of Hexal AG and Eon Labs will significantly strengthen our

geographic presence and product portfolio, our development and registration capabilities,

and increase our scale to rapidly bring a broad array of generic products to patients. These

acquisitions expand our medicine-based business portfolio, providing synergies with our

branded medicines in dealing with large purchasers and in manufacturing. They underscore

our commitment to being the industry leader in offering innovative prescription medicines,

high-quality generics and self-medication products,” said Dr. Daniel Vasella, Chairman and

CEO of Novartis.

Dr. Andreas Rummelt, CEO of Sandoz, commented, “The combination of Sandoz with

Hexal and Eon Labs offers an outstanding opportunity to capitalize on the unique strengths

of each company. Together, we will create a highly competitive leader with a comprehensive

global presence and the expertise necessary for success in the rapidly changing generics

market.”

Combination creates a fast-growing world leader in generics

The enlarged company will provide considerable scale and breadth. The new company will be

No. 1 or No. 2 in major markets, particularly in the US and Germany, and will have a strong

foothold in Asia (India, China and Japan) as well as Latin America.

Hexal is one of the fastest-growing European generics companies and provides a leading

position in Germany, the second-largest generics market in the world. The acquisition will

propel Sandoz into a leading position in most other European markets. In the past three

years, Hexal has launched 121 products, including highly successful versions of the

cholesterol-lowering drug simvastatin (Zocor®), and is preparing to launch the pain

treatment fentanyl (Duragesic®) based on its proprietary transdermal patch drug-delivery

technology.

In the US, the worlds largest generics market, Novartis is acquiring control of Eon Labs, one

of the fastest-growing generic pharmaceutical companies. Over the past three years alone,

Eon Labs has produced 15 first-to-market launches and has positioned itself as the market

share leader for nearly half of the products in its portfolio, which includes 67 molecules in

147 dosage strengths. Eon Labs currently has 27 ANDAs (Abbreviated New Drug

Applications) pending before the US Food and Drug Administration (FDA) covering

approximately USD 14.3 billion in annual branded prescription drug sales.

The combined pipeline covers nearly all of the major molecules predicted to lose patent

protection during the next few years, representing an estimated USD 69 billion in US product

sales between 2005 and 2009. In addition, Sandoz will have strong development and

regulatory capabilities with high productivity and a goal of delivering more than 100

registration files annually. The larger scale will further increase penetration of the physician

and pharmacist markets, which is particularly important as the new company plans 70

launches in the US and Germany alone in 2005.

Through this acquisition, Sandoz will also significantly strengthen its technology base,

particularly in the application of transdermal patches, inhalation products, sustained-release

implants and multi-particulate drug delivery dosage forms. Sandoz will also expand its strong

capabilities in biopharmaceuticals. In addition, Sandoz will reinforce its vertical integration in

active pharmaceutical ingredient manufacturing, which is often critical to gaining first-tomarket

status and offering high-quality generics products at a competitive price.

“This agreement with Novartis has been reached to secure the future of Hexal and its

employees. We have reviewed all options in the interests of the employees and the family an

initial public offering (IPO), merger or sale. We decided that this option not only allows for

what we have created to continue, but more importantly to keep developing with the

capabilities and resources of an industry-leading company. This merger provides the best

possible fit in the industry in terms of product, geography, technology and employee skills

that will form the basis for the most competitive generics company. The combined company

will be well-positioned for dynamic growth,” said Dr. Thomas Strüngmann, a co-founder

and co-CEO of Hexal AG along with his twin brother, Dr. Andreas Strüngmann.

Terms of the transactions with Hexal AG and Eon Labs

Novartis will undertake a series of transactions to acquire Hexal AG and control of Eon

Labs, which will be funded by Group cash reserves:

• Two separate definitive agreements to pay a total of EUR 5.65 billion in cash to

acquire 100% of privately-held Hexal AG, which was founded in 1986 by the

Strüngmanns and is wholly owned by the brothers and their families, and to

acquire 60 million shares of Eon Labs (67.7% of Eon Labss share capital and

65.4% on a fully-diluted basis) from Santo Holding (Deutschland) AG, which is

also owned by the Strüngmanns and their families.

• A definitive agreement by which Novartis will offer to acquire the remaining

approximately 31.9 million fully diluted shares (treasury method) of Eon Labs for

USD 31.00 per share in cash. The agreement, which has been unanimously

approved by the Eon Labs Board of Directors and by a Special Committee

consisting of directors not affiliated with the Strüngmanns, provides that an

affiliate of Novartis will commence a tender offer and will, subject to legal

requirements, purchase any and all shares tendered, if the acquisition of the Santo

Holdings stake is consummated. The offer price represents a 25% premium over

the unaffected price of approximately USD 24.75 (before media speculation about

a possible takeover of Hexal and Eon Labs) and a premium of 9% over the price

paid to Santo Holding for its majority stake in Eon Labs. The agreement also

provides that if a majority of the public shares are tendered, Novartis will effect a

merger to acquire all remaining shares at the offer price.

The transactions, which are subject to regulatory approvals in a number of countries

(including the US and Europe), are expected to close in the second half of 2005.

Highly experienced management team

Following the closing, the new Sandoz management team, under the leadership of

Dr. Andreas Rummelt as CEO, will include top management from all three companies. In the

new company, Dr. Andreas Strüngmann will be responsible for the regional operations in

Europe, Africa and also for Asia-Pacific on an ad-interim basis. Dr. Thomas Strüngmann will

continue in the position of head of regional operations in Germany, the Americas and Middle

East. Both will join the Sandoz Executive Committee. Other members of the Executive

Committee will include Kevin Plummer as Chief Financial Officer, Dr. Gerhard Schaefer as

head of Product Development and Markus Delfosse as head of Technical Operations. The

Anti-Infectives business unit will be headed by Ernst Meijnders and Biopharmaceuticals by

Dr. Patrick Vink. Dr. Bernhard Hampl, currently CEO of Eon Labs, has been designated as

new head of the US operations of Sandoz and will report to Thomas Strüngmann.

About Novartis

Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In

2004, the Group’s businesses achieved sales of USD 28.2 billion and a 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 81,400 people and operate in over

140 countries around the world. Further information is available at www.novartis.com.

Sandoz, a Novartis Company, is a world leader in generic pharmaceuticals and develops,

manufactures and markets these medicines as well as pharmaceutical and biotechnological

active ingredients. Decades of experience and know-how make Sandoz a renowned partner in

pharmaceuticals, biogenerics and industrial products. Altogether, Sandoz employs around

13,000 people in over 110 countries and posted sales of USD 3.0 billion in 2004.

About Hexal

Headquartered in Holzkirchen, Germany, Hexal is a privately-held generics manufacturer

holding the No. 2 position in generics in Germany, the second largest generics market, and a

significant presence in other key markets. Sustaining recent annual percentage sales growth

rates in the high teens, Hexal achieved sales of USD 1.65 billion in 2004. Altogether, Hexal

employs approximately 7,000 people in over 40 countries.

About Eon Labs

Eon Labs, one of the largest suppliers of generic pharmaceuticals in the US, is committed to

providing high quality, affordable products. Eon Labs, which has a strategic partnership with

Hexal AG, produces a broad range of pharmaceuticals in a wide variety of therapeutic

categories. Eon Labs reported record 2004 sales of USD 431 million, an increase of 31%

from 2003, and employs approximately 500 people. Drs. Andreas and Thomas Strüngmann

and their families hold a 67.7% stake in Eon Labs through a holding company.

Note to Investors

Novartis will conduct a conference call with financial analysts to discuss this news release on

February 21, 2005, at 9:00 a.m. Central European Time. A simultaneous webcast of the call

for interested investors and others may be accessed by visiting the Novartis website at

www.novartis.com.

5/5

Disclaimer

This document contains “forward-looking statements” within the meaning of the US Private

Securities Litigation Reform Act. Forward-looking statements are statements that are not

historical facts and are generally identified by the words “expects”, “anticipates”, “believes”,

“intends”, “estimates” “will”, or similar expressions, or by express or implied discussions

regarding strategies, plans and expectations (including synergies). These statements include,

but are not limited to, financial projections and estimates and their underlying assumptions,

statements regarding the benefits of the business transactions described herein, including

future financial and operating results. Such statements reflect the current plans, expectations,

objectives, intentions or views of management with respect to future events, are based on the

current beliefs and expectations of management and are subject to significant risks,

uncertainties and assumptions. Management’s expectations could be affected by, among

other things, competition in general, the general economic environment and other risks such

as, but not limited to, those referred to in Novartis AGs Form 20-F on file with the U.S.

Securities and Exchange Commission. Should one or more of these risks or uncertainties

materialize, or should underlying assumptions prove incorrect, actual results may differ

materially from those set forth or implied by the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from

those set forth in the forward-looking statements: the ability to obtain governmental

approvals for the transaction on the proposed terms and schedule; the risk that the businesses

will not be integrated successfully; the risk that the cost savings and any other synergies from

the transaction may not be fully realized or may take longer to realize than expected;

disruption from the transaction making it more difficult to maintain relationships with

customers, employees or suppliers; social and political conditions such as war, political unrest

and terrorism or natural disasters; general economic conditions and normal business

uncertainty and competition and its effect on pricing, spending, third-party relationships and

revenues. These forward-looking statements speak only as of the date of this press release and

no undertaking has been made to update or revise them if there are changes in expectations

or if any events, conditions or circumstances on which any such forward looking statement is

based.

Securityholders of Eon are urged to read the tender offer statement relating to the tender

offer when such document becomes available. The tender offer statement will contain

important information. Securityholders will be able to obtain a free copy of the tender offer

statement and other filed documents when they become available at the SEC’s internet site

(http://www.sec.gov).