SecProbe.io

April 8, 2011
 Mr. Jonathan Symonds
Chief Financial Officer
Novartis AG
Lichtstrasse 35
4056 Basel, Switzerland

Re: Novartis AG
  Form 20-F for Fiscal Year Ended December 31, 2010
  File No. 1-15024

Dear Mr. Symonds:
 We have limited our review of your filing to those issues we have addressed in
our comments.  In our comments, we ask you to  provide us with information so we may
better understand your disclosure.

Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe a comment applies to your facts a nd circumstances, please tell us why in your
response.  Please furnish us a letter on EDGA R under the form type label CORRESP that
keys your responses to our comments.
 After reviewing the information provi ded, we may raise additional comments
and/or request that you amend your filing.  Item 4.B Business Overview

Pharmaceuticals
Compounds in Development, page 38

1. In order to help us evaluate your disclo sure about your research and development
activities, please provide us the following information:
 A description of your research and de velopment process for each of your
segments, including to what extent regul atory approval is required to market
products.  In your response , please describe the ke y management activities
within your “development paradigm,” pa rticularly the “confirmatory” phase,
including a description of  your process for monitoring development progress
for individual projects (e.g. board review s), your criteria fo r prioritizing and
funding projects, your key decision points  for determining project continuance

Mr. Jonathan Symonds
Novartis AG April 8, 2011 Page 2
or termination and financial measures us ed to evaluate performance of your
“development paradigm.”
 For each segment that requires regulat ory approval, quantify the number of
projects that were in preclinical deve lopment and Phase I, Phase II and Phase
III of clinical development and those for which a submission requesting regulatory approval was filed as of December 31, 2010.
 For each segment requiring regulatory appr oval, the breakout of research and
development expenses incurred during 2010, if practicable by development
phase (i.e., preclinical, Phases I, II and III) and by therapeutic class.
 For your key projects in the Confirma tory development stage listed in the
Selected Development Projects table, i ndicate the month and the year that it
entered that phase.
 For your key projects in the Confirma tory development stage listed in the
Selected Development Projects tabl e, identify the significant patents
associated with the projec t and their expiration date.
 For your key projects in the Confirma tory development stage listed in the
Selected Development Projects table, tell  us the projects added to and deleted
from the table since 2009.  For those removed from this table clarify whether they were commercialized or terminated.  For each terminated project, such as
those listed on page 47, disclose the ev ents and their timing leading to your
decision to terminate the project.
 Tell us about any Confirmatory developm ent stage projects that are not listed
here and the reason not listed.

Item 5. Operating and Financial Review and Prospects

 Impairment of long-lived intangible  and intangible assets, page 129

2. You assert that the assumptions used to estimate the fair value of Alcon’s other
intangible assets are based on assumptions  “deemed reasonable by management.”
Please tell us how these assumptions are consistent with IFRS and reference for
us the authoritative literature re lied upon to support your position.

3. Given the significance of the currently marketed products and marketing know-
how intangibles acquired in the Alcon ac quisition as identified in the table on
page F-50, please provide us proposed revise d disclosure to be included in future
periodic reports that shows a break-d own of these intangibles by product.

4. Given that it appears that your portion of the net assets  recorded associated with
Alcon is close to your share of its ma rket valuation, pleas e tell us whether a
reasonably possible change in a key assumption you use to evaluate the
impairment of the Alcon cash-generating unit would result in its carrying amount
exceeding its recoverable amount.  If s o, please provide us proposed revised

Mr. Jonathan Symonds
Novartis AG April 8, 2011 Page 3
disclosure to be incl uded in future peri odic reports that discloses the information
described in paragraph 134(f) of IAS 36.
 Results of Operations

 Vaccines and Diagnostics Division, page144

5. You disclose that revenue was generated from delivery for supply contracts with
governments around the world for A(H1N1) pa ndemic flu vaccines and adjuvants.
It is unclear whether you maintain st ockpiles for these governments or whether
you physically deliver vaccines and adjuvant s to them. Please explain to us your
revenue recognition policy for product or dered by customers but not shipped to
them and reference for us the authorit ative literature upon which you relied in
determining your accounting treatment.  In  your response, please differentiate
between governmental stockpile  transactions and any othe r customer transactions
and, at a minimum, please provide  the following information:

 Please explain to us the material terms of these arrangements, including when
product is shipped to the customer;
 Please provide us your understanding of  your customers’ business purpose for
accepting title to product that remains in your possession;
 Please explain to us how you transferre d the significant risks and rewards of
ownership of the goods and how you reta in neither continuing managerial
involvement to the degree usually asso ciated with ownership nor effective
control over the goods sold as required by paragraphs  14(a) and 14(b) of IAS
18;
 Please explain how you meet the criteri a for ‘bill and hold’ transactions
identified in paragraph 1 of  the Appendix to IAS 18; and
 To the extent you participate in gover nment stockpile arrangements, please
explain to us whether yo u undertake any obligation to  rotate stock into the
stockpile to maintain currently dated product.  If so, please:
o Explain whether you receive compensati on for the service of rotating the
stock and, if so, how you account for that compensation;
o Explain whether you receive payment for the new inventory rotated into
the stockpile and, if so, how you account for that payment;
o Explain whether you can sell the inventor y rotated out of the stockpile and
your accounting for that inventory; and
o Considering the contingent nature of  government stockpiles and that the
government may never tap the stockpile , explain how you can assert that it
is probable that delivery will be made as stipulated in paragraph 1(a) of the Appendix to IAS 18.

Mr. Jonathan Symonds
Novartis AG April 8, 2011 Page 4  Notes to the Novartis Group Cons olidated Financial Statements

Note 2:  Significant transactions, business combinations and divestments
Acquisitions in 2010; Corporate—Alcon, Inc., page F-21

6. In a table on page F-23, you disclose that the estimated fair value of your initial
25% ownership interest in Alcon as of the August 25, 2010 majority interest
acquisition date was $10,320 million.  It a ppears that you calculate this amount by
reference to a formula negotiated in 2 008 for your ultimate acquisition of Alcon
from Nestlé.  As Alcon is traded on the New York Stock Exchange, please
explain to us why you did not  utilize the market value of your previously held
investment in Alcon in determini ng your goodwill in the August 25, 2010
business combination achieved in stages under paragraph 32 of IFRS 3.  In this
regard, it appears that the $11,877 million fair value obtained by multiplying the
74.061 million shares you initially owned by the $160.37 per share August 25, 2010 closing stock price is a more reliabl e estimate of the acquisition-date fair
value of the component identified in para graph 32(a)(iii) of IFRS 3 than an
amount derived from a negotiation in  2008.  Please reference for us the
authoritative literature you rely upon to support your accounting.

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 the information the Securities
Exchange Act of 1934 and all applicable Exch ange Act rules require.  Since the company
and its management are in possession of all f acts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy  of the disclosures they have made.

 In responding to our comments, please provide a written 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 any 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 person under the federal secu rities laws of the
United States.

Mr. Jonathan Symonds
Novartis AG April 8, 2011 Page 5
Please contact Frank Wyman, Staff Acc ountant, at (202) 551-3660 or Mark
Brunhofer, Senior Staff Acc ountant, at (202) 551-3854, if you have any questions
regarding these comments. In this regard, do not hesitate to c ontact me at (202) 551-
3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief
Accountant