SecProbe.io

Via Facsimile and U.S. Mail
Mail Stop 4720

         April 30, 2010

Raymond Breu
Chief Financial Officer
Novartis AG
Lichtstrasse 35
4056 Basel, Switzerland
 Re:   Novartis AG
 Form 20-F for the Fiscal Year Ended December 31, 2009
 Filed January 26, 2010
 File Number:  001-15024

Dear Mr. Breu:

We have reviewed your filing and have the following comments.  In our
comments, we ask you to provide us with  information to better understand your
disclosures.  Where a comment requests you to revise disclosure, the information you
provide should show us what the revised disc losure will look like and identify the filing
in which you intend to first include it.  If you do not believe that revised disclosure is
necessary, explain the reason in your response.  After reviewing the information
provided, we may raise additional comments and/or request that you amend your filing.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Item 5. Operating and Financial Review and Prospects

Item 5.A Operating Results
CORE RESULTS AS DEFINED BY NOVARTIS, page 98
 1. We do not believe it is appropriate to  present an entire non-IFRS income
statement in an attempt to reconcile non -IFRS measures to IFRS measures since
this gives undue prominence to the non-IF RS information. Therefore please revise
your disclosure to reconcile each non-IFRS  measure separately. Please refer to
Question 102.10 of the Compliance and Disc losure Interpretations related to non-
GAAP Financial Measures.

Raymond Breu
Novartis AG
April 30, 2010
Page 2  2. Please expand your disclosure to include how the tax effect on the adjustments
between IFRS and core results was calcu lated. Please refer to Question 102.11 of
the Compliance and Disclosure Interpre tations related to non-GAAP Financial
Measures.
 Item 18. Financial Statements

Notes to the consolidated financial statements
1. Accounting Policies
Equity-based compensation, page F-16
 3. Please disclose the nature of your relationship with the market maker that
calculates the fair va lue of the options and include the procedures you perform to
validate the fair value information you receive.
 Research & development, Page F-17

 4. Refer to your policy for accounting for “upf ront and milestone payments” in your
other intangible assets accounting poli cy on page F-12 and your research and
development accounting policy on page F-17.  Please revise your disclosure to
clarify how you determine whether an upfr ont or milestone payment represents a
payment to a third party for research and/or development services, a payment for research and development assets, or both.  For example, if the licensor to which
you make an upfront or milestone payment was also obligated to perform research
and/or development services related to  the license (i.e. the research and
development asset) you acquired, how under your accounting policy would you determine to what each upfront and milestone  payment relates?  If a payment, or a
portion thereof, is for research and deve lopment services, please ensure your
revised disclosure clarifies how you de termine whether the payment is for
services already received or for services to be received in the future and your
accounting treatment.
 5. In your policy you state: “Costs of ac tivities that are required by regulatory
authorities as a condition for approval ar e charged to development expenses as
they are incurred, unless the activities ar e conducted beyond the sale period.  In
this case the total estimated post-approva l costs are expensed over the period in
which related product sales are made.”  As drafted the policy suggests that
“beyond the sale period” activ ities necessary for approval may be capitalized and
other activities necessary for approval are expensed as incurred, but does not clarify why.  It is also unclear what the phrase “be yond the sale period” means,
how it relates to the tim ing of “approval,” and to  what “approval” you are
referring.  Please revise your  disclosure to clearly arti culate your policy.  If your
policy is to capitalize an “estimate” of  post-approval costs, please ensure your
disclosure explains the triggering event and criteria for capita lization and provide

Raymond Breu
Novartis AG
April 30, 2010
Page 3
to us an accounting analysis with specific citations to relevant authoritative literature that supports your accounting policy.
* * * *

 Please provide us the information requested  within 10 business days or tell us when
you will provide us with a response.  Please fu rnish a cover letter with your response that
keys your response to our comments.  Detailed cover letters greatly fa cilitate our review.
Please furnish your letter on EDGAR unde r the form type label CORRESP.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclosure in
the filing;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking a ny action with respect to the filing;
and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

 In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

You may contact Vanessa Robe rtson, Staff Accountant, at (202) 551-3649 or Lisa
Vanjoske, Assistant Chief Accountant, at  (202) 551-3614 if you have any questions
regarding these comments.  In this regard, do not hesitate to cont act me, at (202) 551-
3679.

        S i n c e r e l y ,

        J i m  B .  R o s e n b e r g
Senior Assistant Chief
Accountant